According to a recent report from SaleCycle, e-commerce grew by 16 percent in 2017, with e-commerce sales rising to more than $453 billion! This growth is having an effect on the way U.S. consumers purchase all types of goods — even the food they eat — and that’s changing where companies locate and how they configure their supply chain/distribution networks.

For example, consumers can now order the ingredients for ready-to-prepare-and-cook meals delivered to their front door, and it’s projected this market will grow to 18 percent of all food purchases in the next few years. Now, food manufacturers — which are probably located in different parts of the country — must figure out the logistics of getting all the ingredients needed for the ready-to-prepare-and-cook box in one place and keeping them at the right conditions before ultimate delivery to the consumer. This will have a huge effect on where the food manufacturers decide to locate and how they configure their distribution networks.

A similar challenge is being faced in the automotive aftermarket, where parts suppliers are responding to the growth in e-commerce by expanding retail locations and even setting up “mega” distribution hubs. Regional hubs can store up to 50,000 different items at a given time and have proven to be an effective way to supply retail stores. This strategy may help these companies to be more resilient to the e-commerce effect than others.

And while it would seem that real estate markets are suffering from the effects of e-commerce, as brick and mortar stores close, that hasn’t been the case. As consumers have come to expect two-day or even same-day delivery of products ordered online, companies are increasingly supplementing their network of regional distribution centers with smaller, satellite facilities capable of reducing lead times and providing greater flexibility and service consistency. These urban warehouses are more about product movement than storage.