In the course of the past 18 months, digital orders have boomed as consumers have taken to online shopping over visiting physical stores. And while that hasn't been the best news for mall REITs (real estate investment trusts), it's been great news for industrial REITs. These days, companies are clamoring for warehouse space, and while some are investing in their own facilities, others are looking at outsourced solutions for order fulfillment and product distribution.
Enter Stord. The Atlanta-based company has just raised an additional $90 million in capital to support its cloud-based supply-chain solutions operation. And with a valuation of $1.125 billion -- more than twice the $510 million the company was valued at just six months ago -- it's clear that distribution and logistics are a major priority for retailers all over the country.
The whole package
What sets Stord apart from the competition is the fact that it gives retailers a way to manage logistics and distribution seamlessly. The company's niche is its ability to combine physical logistics services like warehousing and fulfillment with an online platform that gives companies complete visibility into those operations.
The result? Retailers that use Stord can scale the product-distribution side of their businesses quickly. In an age when so many consumers are shopping online, that's essential.
Around two months ago, Stord opened its first fulfillment center, a 386,000-square-foot facility in Atlanta. That facility features robotics and automation technologies designed to sort and move products efficiently.
More recently, the company announced that it acquired Connecticut-based Fulfillment Works, a 22-year-old business with direct-to-consumer experience and an extensive network of warehouses. Coupled with its existing network of over 400 warehouse partners and 15,000 carriers, Stord is now in a prime position to grow its business even more -- and help individual retailers do the same.
Giving retailers an edge
These days, physical retailers are struggling to compete with online giants like Amazon as far as delivery times go. Stord can help solve that problem via its existing network of facilities and adaptive online platform. In fact, a big part of Stord's goal is to give companies access to supply chains that are comparable to the likes of Amazon.
Businesses that work with Stord won't have to spend their own resources building out a platform to track inventory and order fulfillment. Instead, they can turn to a single source for not only warehousing space but also the software to manage their digital orders.
Stord introduced its software offering in January 2020, and it grew 900% during the year. Now, its online platform is one of the most rapidly growing parts of its business.
The real estate investing takeaway
Private companies that achieve unicorn status need a valuation of over $1 billion. That's not an easy threshold to meet. The fact that Stord has gotten there so quickly speaks to the need for effective warehousing and supply-chain management solutions.
Real estate investors who aren't dabbling in the warehouse and distribution center space may want to consider getting in sooner rather than later. E-commerce continues to explode by the day, and as companies divert more resources to order fulfillment, industrial REITs could really enjoy a solid lift in the coming years.