Blockchain is changing people’s lifestyle. Along with machine learning and Internet of Things (IoT), blockchain is poised to change the way people behave and this is something traditional businesses should be wary about. Blockchain technology is now changing the property and retail industries in more ways than one.
Brick and mortar retail will soon be obsolete if they cannot compete with the emerging market of e-commerce. E-commerce appeals to the consuming public because they could identify the needs of their customers. In so doing, they can offer a more personalised shopping experience like discount vouchers and other promotional offers.
How Does Blockchain Benefit Online Stores?
Online stores, with the use of blockchain technology, can identify their customers using browser-based cookies, registration data, and advertising networks. All these help online retailers to keep track of their customer data across websites and applications within seconds. Notice how a particular ad will show up in your Facebook feed after browsing about it on Amazon.
This is the advantage of online retailers over brick and mortar stores. Traditional retailers cannot specifically identify every single customer that enters their establishment to know their preferences. It is difficult to offer targeted recommendations without having proper background information about a customer. This lack of personalised offerings allows customers to consider online stores more for their shopping needs.
Property Market Shifting with Technology
The growing popularity of blockchain and e-commerce directly affects other industries and one of them is the property industry. Along with the increasing trend in online shopping is the demand for more warehouse space. In Q3 of 2018, online retail sales totalled $130 billion, an increase of 14.5% from the same period of 2017. Forrester Research forecasts that it will continue to grow to exceed $712 billion by the year 2022.
Recent research by CBRE found that an incremental growth of $1 billion in e-commerce sales requires an additional 1.25 million square feet of distribution space to support the growth of the industry. Since 2008, as much as 2,000 warehouse or storage establishments were added into the US market. Still, it is not enough to cover for the demand. According to CBRE, demand has rapidly outpaced the supply since 2010.
Why is the supply not enough?
Factors Affecting Supply
Location complicates progress and development as most location companies are eager to build these warehouses in dense and urban areas. Most online stores, to keep pace with the growing competition, must offer one-day or same-day delivery. This means the warehouses must be located where the customers are. Dense urban areas are difficult to find and are relatively more expensive if and when they become available.
Additionally, the demand dictates new warehouse designs that allow online retailers to move their goods quickly and efficiently. New warehouse designs must be larger to accommodate frequent movement of goods.
Some property investors resort to other more creative methods of supplying the demand. One way is converting old, retail real estate to become a new industrial space. Whilst it has its own issues, such as seeking approval to change the zoning for industrial space, it is a good start. More so now that the growing trend in warehouses as property investment is on the rise. Blockchain technology will continue on changing the property and retail industry for years to come. It is up to companies to adapt to these changes and survive.