Industrial Park Developers See Amazon Effect

There is certainly one big thing brick and mortar retail has over shopping on line.You can take the purchase home with you right now.
Now firms like Amazon,Walmart and others are investing billions of dollars to offer a higher level of service to internet customers – same-day delivery that feeds that basic need for instant gratification.
That, in turn, is changing both the number, technology and location of warehouse distribution centers that companies are building closer to big population centers.
California industrial park developer Pat Daniels of MSJ Partners who has been marketing a 150 acre site in the Visalia Industrial Park says the Amazon Effect is real and offers “both challenges and opportunities for Visalia.”
More Internet Sales
“We see internet sales of products going from about 2% today to 25% in the next 15 years” suggest Daniels. That includes new trends like shopping for groceries on-line, a category where instant gratification is already the standard.
Daniels says the term comes from supply chain consultant Jim Thompkins who sees the uber- retailer Amazon adding 47 million sf of distribution from 2010 to 2012 and another 44 million sf from 2013 to 2016.The company sells 35 million items.
Like many trends this Amazon Effect started in California. After nationwide pressure over tax fairness succeeded – Amazon agreed to start collecting sales tax on purchases made through their site in this state last September. With resolution of the sales tax issue in California – Amazon wasted no time and has now built or is building almost four million square feet of distribution centers -2 on the edge of the Bay Area and 2 in Southern California.
Prior to this,Amazon sited its fulfillment centers in low-cost, far away places including Nevada and Arizona.
We Lost Business
“We lost a lot of business before the tax agreement” says Fresno developer John Brelsford who says the myriad of companies who supply Amazon “set up away from the California island to avoid the taxes” but that now are coming back to the state. He counts 14 such companies.
“Our fourth quarter of 2012 was the best we’ve had in five years” says Brelsford whose Fresno-based Diversified Development has sprawling warehouse industrial parks in Fresno and Visalia.
So last October Amazon opened its first fulfillment center in California in San Bernardino employing 700. The company is also building a site in Patterson – expected to open in summer of 2013 and announced a new fulfillment center in Tracy that Brelsford says” has 1 million sf and a 1 million sf mezzanine.” Now there are reports the big internet seller will locate its fourth California distribution center in Rialto in the Inland Empire.
For Amazon the goal is not to just compete with rivals on price but on how quick you can supply the purchase.
The trend is not lost on existing retailers like Macy’s who now are investing in ship-from-store capability – taking online orders and routing them to local stores.Customers can either pick up their purchase from the store or have it delivered to them.
Daniels expects Amazon to get into groceries where quick transactions are required They are already doing it in the Seattle area.
Tough Competition
He says Visalia – some 190 miles from Los Angeles and 230 miles from San Francisco can supply both areas from one location but may be at a disadvantage for same-day service.
Brelsford says he sees the Amazon Effect offering smaller companies withe less than a million sf distribution center a chance to supply the state from Fresno or Visalia.
Competition from city-edge places like Patterson and Tejon Ranch that may have a small advantage a few hours closer to the dense population centers. Tejon, at the foot of the Grapevine, landed a Dollar General center,Caterpillar,Camping World and IKIA. Nearby,Shafter’s logistics park, owned by billionaire Stewart Resnick, is a tough competitor and recently added a new 1.7 million sf Ross Stores  distribution center and 1500 jobs.
But Daniels sees Visalia as a place that can offer a statewide location to resupply the edge-city centers with the heavy presence of both FedEx and UPS offering next-day shipping to one third of the US from their city limits.
Not just retail or electronics shipments want to be close to their customers. All kinds of industries chose Visalia for example to be close to their users including VWR for pharmaceuticals,MWI  – veterinary supplies and International Paper who serves the fast food industry. Then there are all the food suppliers like all the dairy manufacturers who source their raw products here but are also able to supply their customers quickly as well.
These are companies that won’t pick up and relocate somewhere else tomorrow.