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What will industrial development look like post COVID-19?

NAIOP Advantage Series: CRE Response to COVID-19

During this time of uncertainty, many are wondering what new commerce will look like in the coming months and how industrial development will support it. In a recent webinar hosted by NAIOP, Ed Klimek took a deep dive into the world’s largest commercial enterprise, Amazon, and how they have adapted to an ever-changing environment during COVID-19.

Marketplace Mechanism

Harvard Business School Professor Sunil Gupta, author of the “Amazon 2019” case study, noted, “In today’s world, competitive advantage comes from connecting products and connecting consumers.” This is one of the most crucial drivers of Amazon’s growth — its mechanism to keep customers purchasing new products and services.

In a similar way, industrial development must implement its own marketplace mechanism to better connect consumers with products and services, and to help eliminate friction from horizontal integration as new networks are created. Development is likely to favor true mixed-use developments where ideas are generated, companies collaborate, and the newest products are created and distributed at a rapid pace to a continuously returning consumer base.

Customer proximity

Intense consumer focus drives Amazon to adapt its supply chain almost effortlessly in directions that at first seem disparate. In turn, this proves their relentless dedication to consumer satisfaction.

Early on during the COVID-19 crisis, the highly globalized supply chain collapsed, throwing a wrench into the ability to meet consumer demands and exposing the weakness that being close to customer matters. Close proximity means that industrial development has the ability to both produce and distribute in ways that are driven by the values and complexities of an increasingly localized market, even as it interacts with the remaining global supply chain.

Infrastructure agility

It is possible that in the post COVID-19 environment, society may lose some of the obsession with same-day or within-the-hour delivery due to their newfound perspective. A localized system of delivery that is better integrated within the daily lives of consumers will most likely be expected.

Although the pandemic is not yet over, what has already been demonstrated is the need and value for integrated communities. The demand for immediate goods may be replaced with the value for more localized goods and a stronger market mechanism that connects the consumer at the beginning and end of the supply chain. Innovative infrastructure that is both digital and physical, and increasingly local, may help to avoid sole reliance on a global supply chain.

Seamlessly integrating where people live, work and make, in ways that are frictionless, will add the greatest value in a post COVID-19 world.

Ed Klimek presented a webinar examining “What Will Industrial Development Look Like Post-COVID-19?” as part of NAIOP’s Advantage Series: CRE Response to COVID-19. The webinar recording is available here. Visit the NAIOP Response: COVID-19 page for critical resources and knowledge to support you now.

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