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Trends changing the warehouse space.
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November 26, 2024

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It’s Tuesday, and Starbucks employees are using pen and paper to track their hours following a cyberattack on a third-party vendor. For their sake, let’s hope they get it figured out by Thanksgiving, because many of the coffee chain’s locations will still be open for the holiday.

In today’s edition:

—Alex Vuocolo, Andrew Adam Newman

SUPPLY CHAIN

Off the supply chain

A delivery drone flying through a retail warehouse Amelia Kinsinger

Warehouses are sort of the unappreciated middlemen of retail supply chain management, serving their part within immense, sometimes anonymous, structures. They provide a stopover between factory floors and store shelves—a role that has only become more important as retailers have expanded their e-commerce and delivery capabilities.

Indeed, the pressure to serve customers across channels has led to a boom in warehousing construction, which continues at a slower pace even as some retailers find themselves with an excess of space.

For a quick look at how this space is evolving, here is a rundown of some of the biggest trends in warehousing:

The rise of robotics: The flashiest of these would arguably be the embrace of automation at logistics facilities. While a number of retailers are innovating—take a look at IKEA’s new warehouse drones—Amazon is leading the pack. The e-commerce giant recently opened a facility in Shreveport, Louisiana, that incorporates all its robotics investments, which the company claims reduces fulfillment processing time by up to 25%. In a call with analysts last month, CEO Andy Jassy said that it’s “still early days in how much automation we expect in our fulfillment network.”

Going big: Beyond investments in new technology, retailers aren’t skimping on size either. General retailers and wholesalers nabbed the title of most active occupier of big-box warehouse facilities, which are at least 200,000 square feet, per CBRE. In 2023, the group accounted for 36% of all lease transactions, just ahead of third-party logistics providers’ 35%. This increase in market share comes even as vacancy rates in 2023 doubled to 6.6% at year end.

Keep reading here.—AV

   

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DTC

Gift thrift

CFOs resale trade in programs economics Iryna Imago/Getty Images

While the resale market is growing dramatically, it’s not everyone’s (gently used) cup of tea, leaving its enthusiasts to wonder whether it’s appropriate to give secondhand items as holiday gifts. And while there’s no telling how a preloved hoodie is going to go over with your surly teen, as a general rule, the practice is gaining steam.

Nearly 3 in 4 shoppers (74%) believe that giving secondhand presents has grown more acceptable over the past year, a 7% increase over last year, according to a new survey from OfferUp, a resale marketplace for local transactions.

Even more respondents, 83%, would welcome a secondhand item as a gift.

Beyond sentiment, though, there’s real intent to gift-wrap pre-loved items this holiday season, with 68% of respondents saying they’ll purchase used gifts this year; among Gen Z, 83% plan to do so.

The online survey of 1,500 US respondents was conducted on October 13.

Circular reasoning: The most popular category for secondhand gift-giving this year among respondents was electronics (55%), followed by sporting goods (47%), and furniture (42%).

Many clean out their own closets to afford all those gifts, with 36% of respondents having already sold items online (or planning to do so) to fund holiday shopping this year.

Among Gen Z, more than half (53%) are selling items online to bolster their gift-shopping budget.

“The stigma around secondhand gifting is rapidly diminishing,” Todd Dunlap, CEO of OfferUp, said in a press release. “Pre-owned items are no longer just a practical choice—they’re now a preferred option for many, offering a way to give memorable gifts while being mindful of budget constraints.”—AAN

   

STORES

Wheelin’ and dealin’

Woman with shopping bags Vuk Saric/Getty Images

The holiday shopping season is on track to be shorter and less promotional this year, and consumers are prioritizing deal days to stretch their budgets.

A new survey from Deloitte found that shoppers expect to spend a record $650 this Black Friday–Cyber Monday, up 15% from 2023. “Nearly half (45%) of consumers surveyed say they have already experienced higher prices for holiday items this season, and almost a third (32%) of respondents say retailers are discounting less,” the survey found.

“This year we have a shorter holiday shopping season with the late Thanksgiving,” Brian McCarthy, principal at Deloitte, wrote in a statement. “Combined with a deal-focused consumer, we can expect to see holiday shoppers spend big during Black Friday–Cyber Monday promotions as they seek to close out their holiday shopping lists in a shorter timeframe.”

While retailers such as Walmart, Target, and Amazon slashed prices or held big promotional events in October, Black Friday weekend appears to have a stronger pull for consumers this year. Just 32% of those surveyed said October offered the best deals, down from 49% in 2023, while 47% said the best deals of the season are dropping on Black Friday.

Shoppers also plan on blowing more of their total holiday budget this weekend than last year, with respondents saying they plan to spend 56% of their budget on Black Friday weekend, up from 47% in 2023.

Keep reading here.—AV

   

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SWAPPING SKUS

Today’s top retail reads.

Sold out: Private equity firm Nexus Capital Management has gotten court approval to purchase off-price retailer Big Lots, which is currently undergoing Chapter 11 bankruptcy. (Chain Store Age)

Maybe later: Macy’s has delayed its latest earnings release following reports that an employee hid as much as $154 million in delivery expenses over multiple years. (Reuters)

All in on AI: Despite complaints that AI-generated ads look weird, brands such as Coca-Cola are trying to take advantage of the new cost-saving tech. (the Wall Street Journal)

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