In a market where the customer experience is more important than ever, CRE brokers can team up with an on-demand warehousing partner to add value. Here’s how.
In reading Deloitte’s newly released 2020 Commercial Real Estate Outlook, this statement really caught my attention: “As we look to the milestone year of 2020, it has become urgent for CRE companies to prioritize tenants’ and end users’ needs, given the increasing influence of technology and changing customer preferences.”
Essentially, the traditional focus on “location, location, location” is increasingly shifting to “location, experience, analytics.” The focus on experience has emerged as such a crucial factor that it has given rise to ROX, a new performance management metric that captures a company’s return on its investment in customer experience (CX) and employee experience (EX).
New demands put emphasis on tenant experiences
Consumer demand for more personalized, expedient, interactive, on-demand experiences has the CRE industry embracing a range of innovative technology (such as CBRE’s Host, an enterprise-grade smart workplace platform, and JLL’s PinPoint, a geofencing tool for the analysis of consumer behavior). Developers and management must pledge to keep technology investments high, even in the face of an economic downturn, as the concept of real estate-as-a-service is taking hold and tenants change the way they engage with physical space.
Simultaneously, tenants are changing the way they do business — which affects the way they approach real estate. They must make their supply chains more responsive to market fluctuations, introduce operational agility, get closer to customers to facilitate last-mile delivery, and explore new markets before making long-term lease commitments.
While the transformation of the retail landscape — stores as showrooms, interactive shopping, the demise of malls — tends to garner the most media attention, Deloitte notes the elevation of the tenant experience applies to every aspect of the supply chain, including warehousing.
On-demand economy reshaping expectations
Consider this observation from Deloitte:
“Tenant experience is a top priority for most CRE leaders. The on-demand economy is reshaping tenant expectations about how real estate is consumed, and technology-enabled facilities and personalized experiences are already transforming the CRE industry. Today, creating superior experiences is not just about engaging the tenant. It is also about extending services to the CRE “end user,” or the day-to-day consumer of that space: a retail shopper; a resident living in a multifamily property; an employee working in an office space; or a manufacturer using a warehouse.”
But how can CRE brokers extend that additional service element to clients for an enhanced experience? When we speak to CRE brokers they are sometimes surprised to learn how a partnership with an on-demand warehousing company like Warehowz can add value to the experience of their customers.
On the surface it may seem that CRE brokers, who specialize in long-term warehouse leases, and on-demand warehousing, which fills a need in the marketplace for short-term space, are not a natural fit. But CRE brokers can actually benefit from adding on-demand warehousing as a tool in their portfolio of services, as it helps to groom leads for future business.
Let’s take a look at three examples where CRE brokers can leverage on-demand warehousing to enhance their service offerings:
1. Nurture leads
Companies are, by design, risk averse. Without a solid growth forecast that shows demand will remain high for years to come, they are unlikely to take a chance on an unexplored area. For startups in particular, such long-term growth forecasts are notoriously unpredictable, making them even less likely to dive in. In the past, CRE brokers may have had to turn away such companies — and risk losing their business for good.
An on-demand warehousing partner can change that dynamic by nurturing leads until they are ready for a long-term commitment. In a warehouse market with a historically low vacancy rate of 4.8%, according to Heitman research presented at the recent VCU Real Estate Trends Conference, long-term lease rates will naturally be more favorable and attractive to tenants.
2. Expand portfolio of services
Few companies are using a uniform set of warehouse leases. Instead, their portfolios consist of a mixture of leased warehouses, 3PLs, and — increasingly — on-demand. To stay competitive in such an environment, CRE brokers should consider expanding their portfolio of services to include on-demand warehousing. A CRE client who just signed a long-term lease may still need on-demand space elsewhere. A partnership enables that client to leverage Warehowz’s cloud-based platform. The result: a solution that follows the mantra “location, experience, and analytics,” and, by extension, fosters customer satisfaction by improving service offerings.
3. Tackle overflow needs
A CRE client is experiencing an overflow need, but the new warehouse space is six months to a year from completion. What should the company do during the construction? With an on-demand warehousing partner, the CRE broker can present a flexible offer: short-term space is available right in the area. Again, it means a valued client receives enhanced service.
And this last Deloitte statement rings very true:
“It’s now or never for the CRE industry. CRE leaders should be proactive and preemptive, open the aperture, and embrace and adapt to the winds of change.”
Want to know how Warehowz can help your business thrive? Contact us today.