RESEARCH LOGISTICS SPAIN 2017 ECONOMIC BACKDROP E-COMMERCE NEW FACILITIES OCCUPIER MARKET AND INVESTMENT LOGISTICS SPAIN, 2017 RESEARCH ECONOMIC BACKDROP THE E-COMMERCE Exports have played a key role in the Spanish economic recovery, making REVOLUTION the logistics sector crucial to ensuring the competitivity of the country’s products overseas. The Spanish economy grew 3.1% y-o-y in According to figures published by the in the availability of goods at the agreed GRAPH 4 Q3 2017, and according to the IMF, it is set CNMC (the National Commission of Mar- time and place. With the rise of e-com- LOGISTICS AND ECONOMIC COMPETITIVITY e-commerce turnover to grow at a similar rate for the remainder of kets and Competition), the turnover gener- merce, logistics has turned from a mere Spain. Millions (€) the year with the current growth cycle tak- ated by e-commerce sales made via virtual operational element, into an element that Transport and logistics are of growing and reinforcing companies’ need to be adds value to products depending on their ing hold across 75% of the world’s econ- POS devices in Spain rose by almost 25% strategic importance in the economy, one step ahead of the rest, supporting y-o-y in Q1 2017. At year-end this increase availability. 35,000 omy, and with the markets which Spain not just because they are key for sec- the innovation of both products and is expected to stand around the 20% mark trades with the most experiencing sharp Although retailers are aware of the grow- 30,000 tors such as Industry and Commerce, processes. versus 2016. growth (namely the rest of Europe, the USA ing importance of the last link in the chain, but also because they are vital in they are increasingly opting to manage 25,000 and China), this only further strengthens The logistics sector is already taking The increased security and privacy of on- terms of the economy’s competitivity line purchases, expansion to other mar- the distribution of their products them- Spain’s economic recovery. the measures required to move in line 20,000 in general. kets, improved delivery times and cheaper selves. According to the E-Commerce & with sustainability principles that allow Against this current backdrop of growth, transport costs are some of the reasons Digital Transformation Observatory, in 15,000 Increasing automisation and digitalisa- it to continue growing within the con- the Consumer Confidence Index in Spain 2017, 14% of e-commerce retailers said tion is both revolutionising production behind the rise of e-commerce in Spain. text of the Fourth Industrial Revolution, that they would prefer to manage their 10,000 stood at 103.2 points in September, up processes and optimising logistics. driven by innovation such as robots, Major brands are investing in the om- product logistics themselves, compared 12 points y-o-y. The improved economic 5,000 Prices are becoming more competitive drones and artificial intelligence. ni-channel approach, which helps them to to 7% in 2016. outlook has boosted household consumer boost sales thanks to the synergies that The thriving e-commerce industry and the 0 spending, taking it 4.6% higher in the Q2 are generated between the on and offline 2017 y-o-y comparison. For the remainder need to cut delivery times makes the lo- buying experience. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 cation and/or size of logistics facilities ev- of the year, both internal consumption and GRAPH 2 Competitivity factors. Spain and Germany* For the customer, the purchase ends as ermore important, causing them to move external demand are expected to bolster Source: ONTSI | CNMC | latest available data to Q1 2016-2017 soon as they receive the goods that they closer to cities or locations with very good economic growth despite the appreciation 2017. Rest of data for 2017 based on Knight Frank have bought. Logistics plays a key role transport links. forecasts. of the euro and the weakening effect of low oil prices. * Each area is scored 1 to 7, with 7 being the highest score. GRAPH 3 GRAPH 5 European retail e-commerce sales (%)* e-commerce trends 2015-2017 (forecast close) Main factors underpinning e-commerce GRAPH 1 INSTITUTIONS Spain’s trade balance. 7 Import and export of goods INNOVATION 6 INFRASTRUCTURE 1994-2016. Millions (€) SOCIAL MEDIA 5 UNITED KINGDOM Enables people to consult the 4 GERMANY opinions of other consumers BUSINESS MACROECONOMIC 3 and find out information about SOPHISTICATION ENVIRONMENT FRANCE the brands and promotions. 300,000 2 SWEDEN 1 MOBILE COMMERCE HEALTH AND THE NETHERLANDS 200,000 0 Provides speed, flexibility, ease MARKET SIZE PRIMARY EDUCATION EUROPE (AVERAGE) of use and mobility. 100,000 SWITZERLAND PAYMENT TERMS 0 AUSTRIA AND FINTECH TECHNOLOGICAL HIGHER EDUCATION Provides access to services 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 READINESS AND TRAINING BELGIUM (cutting out the middle man), 2017 SPAIN transparency, security, speed. GOODS AND SERVICES - FINANCIAL MARKET 2016 BALANCE TREND GOODS MARKET POLAND EFFICIENCY 2015 CLICK & COLLECT (EXPORTS) EFFICIENCY GOODS - EXPORTS Offers immediacy, security, LABOR MARKET ITALY TREND ease of use, as well as saving EFFICIENCY GOODS - IMPORTS (IMPORTS) 0 5 10 15 20 time and costs. Source: Bank of Spain Source: World Economic Forum SPAIN GERMANY Source: Centre for Retail Research. * Excluding vacation, autos, gas & tickets. Source: Knight Frank Research 2 3 LOGISTICS SPAIN, 2017 RESEARCH MULTI-CHANNEL LOGISTICS WITH MORE COLLECTION OPTIONS, IN STORE, AT CONVENIENT PICK- UP POINTS, IN STATIONS AND e-commerce AIRPORTS, ETC. WHAT DOES IT MEAN FOR THE LOGISTICS SECTOR? VERY SHORT DELIVERY TIMES, EVEN IN LESS THAN TWO HOURS. e-commerce has presented the logistics sector CUSTOMERS NO LONGER WANT with a great challenge: updating and improving SPEED, THEY WANT IMMEDIACY. how it is perceived and its competitivity versus @other markets. THE CUSTOMER CAN TRACK THE STATUS OF THEIR ORDER IN REAL TIME. INCIDENTS ARE REDUCED THANKS TO IMPROVED CONTROL OF ORDERS. BROADER INTERNA- THE MAIN OBJECTIVE: TIONAL REACH, DELIVER SATISFACTION CAPACITY TO SELL TO MORE COUNTRIES. MAKE INVERSE LOGISTICS EASIER, BOTH IN TERMS OF INTEGRATION OF THE ENVIRONMENT AND RETURNING PURCHASED GOODS. MORE PAYMENT SYSTEMS, GREATER TRANSPARENCY AND SECURITY. PROFESSIONALISATION OF THE SECTOR, COMBINING THE LATEST ADVANCES WITH QUALIFIED STAFF. 4 5 LOGISTICS SPAIN, 2017 RESEARCH NEW LOGISTICS WHAT MAKES NEW FACILITIES DIFFERENT? FACILITIES E-commerce has not only driven take-up of solely focused on storing and distributing logistics space, but it is also changing the stock, nor are they all located on plots of actual space inside the facilities. Companies land far from the city centre due to price are aware that they must redesign their logis- differences or availability of space. If com- STRATEGIC LOCATION tics warehouses in order to adapt to the new panies want to be competitive in the current Spaces located very close to cit- business model. Warehouses are no longer climate, they have to change their priorities. ies, or with good transport links, in order to reduce delivery times as much as possible. GRAPH 6 Technology in new logistics facilities Latest advances in operations AUGMENTED REALITY Workers wear smart goggles that indi- TECHNOLOGY cate where the product can be most effi- New technical facilities and systems ciently stored. that help to automate processes, allowing for faster deliveries, track- ROBOTICS ing and statistics for products, Robot helpers can carry out repetitive tasks greater control over orders, and or tasks that require the most physical work. minimising work-related accidents, among other advantages. ITEM ENCODING (THE INTERNET OF THINGS) Systems that can identify the exact amount of every product in stock, where it can be found, and how popular it is, in order to con- trol production amongst other things. MORE DEMANDING DESIGN More efficient, sustainable and BIG DATA profitable industrial facilities. Use of specific materials and new re- Constantly collating data creates huge pos- sibilities in the field of Big Data, where know- furbishment/construction methods ing consumer behaviour with relation to en- that provide greater security and coded items is crucial in order to optimise ease of maintenance are crucial. resources during manufacturing, and also to It is important to analyse the core detect new business models. purpose of the building, as this is not the same for every occupier. DRONES Allows delivery to locations that are diffi- cult to access. They can reach the highest m² shelves in the warehouse, confirming the amount of stock and space available. AREA 3D PRINTING There is demand for more space Creation of objects, such as replacement than in previous years, however this parts, at any time and place, saving on stor- space is also used more efficiently. age and transport costs. 6 7 AMAZON. Logistics Centre San Fernando deLOGISTICS Henares, Madrid SPAIN, 2017 RESEARCH Dispatches thousands of orders across southern Europe every day, and can deliver to Barcelona in a matter of hours. Distance from the centre of Barcelona: 11 km. Size: 66,000 sqm on a 210,000 sqm plot. Unique feature: 3,500 robots will automatically organise 30,000 shelves. The robots will be able to move 750 kg at a speed of 1.7 metres per second. Other features: Amazon manufactures its own logistics robots, thanks to the creation of its “Amazon Robotics” business line, fol- lowing the acquisition of the company Kiva Systems in 2012. Value-add of the brand: technology. AMAZON. El Prat Logistics Dispatches thousands of orders across Europe every Centre, Barcelona day, and can deliver to Madrid in a matter of hours. Distance from the centre of Madrid: 21 km. WHAT IS AT THE HEART OF THE Size: 77,000 sqm.