What’s the news?

As the race continues, the news broke regarding the construction of 1 million square feet huge warehouse just adjacent to the international airport of Dallas-Fort Worth (DFW International Airport).

What’s in it for the traders?

With the construction of the warehouse just adjacent to the international airport. There will be a huge convenience for the transporters and shippers. The reason being the accessibility to all the major state and interstate highways and vast storage capacity.

About the Project owner.

Dallas Based, Perot Development Co. is the one taking care of the project. The company majorly focuses on Air/Cargo, Warehouse/distribution and logistics. In past 7 years, Perot has leased almost 5 million sq. feet of logistic space, including the 2 massive fulfillment centers of Amazon.

What’s the current status?

The first phase of Dallas-Fort Worth or we can say DFW International Airport project is expected to be completed in 12 months. Soon after the completion, the project will be able to cater to three fulfillment centers. If we talk about the largest storage space in the project it will be approximately 646,190 sq. feet with 171 trailer positions and 136 dock doors. 

From the CEO’s mouth:

CEO of the company Pat Perot stated that they are targeting E-commerce companies. The major reason behind the same is that we are located in the middle of the metroplex and will be able to offer great proximity to the huge population base along with the labor. Along with that the last mile deliveries and you can get the cargo coming in easily be it through the airport or by the truck.

It is being built on a speculative basis due to strong market interest in infill sites centrally located in major metropolitan areas with significant international trade volume, he said.

The site of the warehouse directly fronts the President George Bush Turnpike, along with the access to two huge exits. Other major advantage we will be able to offer is easy reachability to FedEx and UPS regional hubs and centers, the United States Postal Service bulk mail centers, and all the major freight forwarders, not only that Foreign Trade Zone benefits and local tax exemptions.

In Phase 2 of the project, the major emphasis will be laid to feature smaller lease of around 50,000 sq. feet or more that will be built to suit any kind of logistic purposes.

E-commerce industry is the one which is reshaping the demand for industrial properties and how warehouses are rapidly built. Currently E-Commerce accounts for almost 10% of the total retail sales and is growing at a rapid pace i.e. three times faster than the traditional store sales for the past few decades.

As per a study conducted by Real Estate Services and investment firm CBRE (Coldwell Banker Richard Ellis) in 2018, It was found that more than 30% of the distribution space is attributed to E-commerce on lease. And for every $1 billion e-commerce sales growth, approximately 1.25 million sq. feet of warehouse space is required. And it is because of this demand for effective and efficient logistic space that supports quicker and faster deliveries, new warehouse designs have been introduced which are wider and larger. If we look at the dimension’s new warehouse in the United States have increased by 108,665 sq. feet, or we can say 143%, in size and 3.7 ft. in terms of height in comparison to high-development period previous 20 years, according to CBRE report.

So it becomes quiet clear that the growth of E-commerce platform is in a tremendous state and will require a lot of storage space as the consumer base is shifting at a great speed from traditional market to E-commerce platforms.

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Target’s sale has been projected to be more than double in 2020 if we compare the same with the year 2017.

“At such a time where brick & mortar stores are struggling each day to keep up with the rapidly changing retail landscape, Target has used its trump card and seems to directly have hit the bullseye,”

Cindy Liu, the forecasting analyst of eMarketer during the release said that, “Store renovations & expanding fulfillment promises on the same day, such as direct store pickups, drive up and delivery using Shipt, are paying off very well. Target has strategically developed a plan to smoothly process and fulfill orders from within the store itself, along with ensuring that customer demands for convenience and speed are met in-store as well, while catering to the huge online market.

Another important aspect that Target has been climbing up the ladder very well using the digital marketing potential was its sales from the toy segment in the year 2019 which rapidly increased. While the in-store sales in this segment were found to be overall flat which was like a disappointment for the executives and analysts. However, Target’s online toy sales grew rapidly around 12% year on year during the fourth quarter, as per the 1010 data report. Also during a survey, it was found that Target has taken some share from Amazon as well in the online toy sales.

Shipt acquisition by Target has also provided the retailer with more options for delivery, while Target has also worked upon and expanded its pickup & drive-up capabilities. This has allowed Target to offer more options to the consumers, whereas store fulfillment has tremendously helped to make online orders more efficient, effective and much profitable.

Some Statistical data that proves Target’s tremendous growth:

• Target overruled three major competitors to become the 8th largest e-commerce player in the United States of America, as per the eMarketer’s latest rankings of market share. This rank marks the entry of the giant i.e. Target in the top 10 list.

• It is assumed that the Target’s e-commerce business will be touching new horizons with an expansion of approximately 24% to $8.3 billion in the current year. eMarketer has also estimated giving Target 1.2% of the market share in the year 2020, according to an emailed press release. Further moving in its journey to the No.8 Rank, Target has edged past Qurate Retail Group, Costco & Macy. ​

With all kinds of strategies adapted by target day on day, along with acquisitions happening at a rapid rate, Target’s investment in its digital marketing is tremendously helping them grow with a huge success rate. Looking at the current analysis, the day is not far when Target may enter the top 5 and in leaps and bounds, will start ruling the market.

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