The COVID-19 pandemic has changed the way Americans shop. And Jacob Horsely of Cushman & Wakefield believes now that consumers are comfortable ordering on sites from Amazon to Zappos, they won’t go back to brick-and-mortar shopping.
Horsely, the senior director of industrial brokerage services in Cushman & Wakefield’s Jacksonville, Florida, office, said e-commerce grew from roughly 13% to 14% of U.S. retail sales to 18% to 19% in just the past six months.
“That’s just a huge spike,” Horsely said. “New habits are being created.”
Horsely was part of a webinar, “E-commerce Site Selection in Today’s Changing Market,” on Monday hosted by the Jacksonville Port Authority (JAXPORT).
He said Jacksonville has a lot to offer e-commerce businesses, including a 102 million-square-foot industrial market; average rent of $5.31 per square foot; and a ready workforce from the 1.5 million people who live in the five-county region. That’s not to mention the ability to quickly get products imported through JAXPORT to nearby distribution centers and then into the hands of consumers.
“You’re going to be able to reach 54 million consumers within an eight-hour drive,” Horsely said.
He said there is a slew of success stories, including that of online furniture retailer Article.com, which ultimately selected a 318,000-square-foot facility on Jacksonville’s north side in 2018 — after it had been pointed elsewhere in the Southeast.
Horsely explained that Canada-headquartered Article hired a supply chain firm to help decide where to locate its fourth U.S. facility. The consulting firm came up with three cities: Atlanta, Savannah, Georgia, and Fort Lauderdale, Florida.
“They skipped over Jacksonville initially. As Article started doing their homework and talking to the ports, they quickly fell in love with Jacksonville; they really hit it off well with JAXPORT,” he said, pointing out that Article must depend on a seaport as the majority of its products are imported from Vietnam and Thailand. “Once they started looking around at the other three markets their supply chain firm gave them, they were quickly able to identify that those markets didn’t work well.”
Lisa Wheldon, JAXPORT’s director of trade development and rail, said since locating in Jacksonville, Article has been able to reduce its delivery time in the Southeast by three days.
“This final-mile delivery is key as consumers expect next-day and even same-day delivery — and of course we want it all for free,” said Wheldon, the moderator of Monday’s webinar.
Aundra Wallace, president of the JAXUSA Partnership, said U.S. consumers spent $347.3 billion online in the first six months of this year, up more than 30% from the same period last year.
“That bodes well for the Jacksonville region and JAXPORT as we’ve seen tremendous growth in this business” with companies such as Amazon, Fanatics, Ulta and Wayfair, Wallace said.
He said JAXUSA has helped 13 e-commerce companies open facilities in Jacksonville over the past five years.
“The companies have invested more than $3.3 billion in infrastructure and generated nearly 18,000 initial jobs at the times of the announcements. In many cases, they’ve expanded since the initial announcement, creating more jobs for our local workforce,” Wallace said.
“JAXPORT has been a tremendous partner for JAXUSA as we work to drive more e-commerce business to our region,” he added.
JAXUSA currently is working with 43 companies that could locate in Jacksonville. “Twenty-one of those prospects are advanced manufacturing projects, and about another 12 to 13 of those are advanced transportation/logistics projects,” Wallace said. “They want to be close to JAXPORT.”
In addition to JAXPORT, the region’s growing population is a draw for companies looking to open a facility in the Southeast.
“The Jacksonville region made the biggest gains in population of any other city in the nation from April to August. The number of people coming to Jacksonville versus leaving was 10.7% higher during that time this year over last year as people are leaving high-cost, high-density cities and regions,” Wallace said.
He added that even more goods will flow through JAXPORT when it completes its dredging project to deepen the shipping lanes to 47 feet to accommodate larger container ships in 2022.