Goldman Sachs has predicted that online shopping will expand by 19 percent each year during the next three years to come, which marks a rise from its past forecast of 16 percent. The firm said the acceleration was mainly fueled by quicker growth in the United States, Brazil, Western Europe and a good share of APAC, according to the Monday (July 20) report.
“At an enterprise level, we’ve seen an acceleration in innovation over the course of the crisis as companies have rolled out curbside pick up programs, contactless checkout, personalized consignment deliveries, and retailers and marketplaces have adapted to reflect the shifting needs of consumers focused on the new essentials,” the firm said in the report.
Goldman Sachs also noted that eCommerce penetration rose to more than 40 percent in May from 16 percent of retail spending domestically in the first quarter of 2019. The firm noted that “traditional retailers” such as Kroger and Target notched “triple digit growth” in online shopping revenues and eCommerce platforms such as Etsy and Alibaba saw “surging demand.”
The firm also noted that the pandemic is fueling technology adoption aside from software “as warehouse automation through robotics is being pushed both by the need for workers to socially distance as well as the need for increased efficiency over 24 hour work cycles.”
In separate news, a JLL report found that the country will require a further 1 billion square feet in warehouse space by 2025 because of the quick expansion of online shopping. The need for fulfillment centers is fueling half of industrial transactions today per the past report in contrast to 35 percent prior to the pandemic.
In addition, JLL forecasted that the U.S. will require a further 100 million square feet of cold storage space within the few years to come. In addition, a JLL executive noted in the report that industrial rent growth has been positive as of 2011.