Social Media and Building Construction

Today marks the IPO date for Facebook.  The press is all abuzz over the stock offering of a company that does not produce a single tangible item...yet, will be valued at over 100 billion dollars.  Would anyone have considered that even possible 10 or 15 years ago?  How could this be happening?

Whether or not you believe that Facebook is worth that kind of money it is a highly visible example of a trend that is accelerating so rapidly that building developers can barely keep up.  That trend is social media driven e-commerce.  The value placed on Facebook is derived from its ability to generate sales of goods and services through both its paid advertisements and through the massive database of user preferences.  When retailers know what you like and don't like they are armed with information that allows them to tailor their sales message directly to you in a way that makes it very difficult for you to resist.

Personalized advertising...not just to groups or subgroups of the population but down to YOU...is not quite there yet but it is coming fast. 

Another highly visible example is Amazon.  While Amazon lacks the social media aspect it has quickly become the largest "retailer" in the country.  Tracking and using personalized shopping patterns is already part of the Amazon business model and they use it very effectively to "suggest" other items that you might want to buy while you are on line making a purchase.  Combined with simple transactions this has made Amazon a success.

So, what does this have to do with developers and the construction industry?  Regardless of how a consumer makes that buying decision and places that order there eventually needs to be a physical transaction...even if it is only to hand over a tangible item to the purchaser.  The problem for developers and logistics companies is speed.  The speed of the e-commerce transaction is almost instantaneous.  That creates an expectation on the part of the consumer that the rest of the buying process will also go that quickly and be that personal.

So how do you quickly transport goods from their point of origin, to the port of entry, to the point of regional distribution, and then to the point of local distribution?  Many logistics experts will tell you that it is "the last mile" that can make or break the deal.  The "front end" of this distribution problem has been analyzed to death over the last few years.  Now that "last mile" needs to be addressed.  Does it mean repurposing US Postal Service facilities for commercial use?  Does it mean developing and constructing thousands of mini-hubs all around first and second tier cities? 

If it is the former then I would speculate that a significant amount of HVAC equipment will need to be replaced and upgraded for energy efficiency in order to help control costs.  The postal service has been running so lean over the last several years that the building infrastructure will probably need to be completely rebuilt with efficiency as the number one objective.

If it is the latter then what type of buildings and HVAC products will be required?  These will likely not be "big boxes" as we are used to.  High bays and cross docks will probably not be part of the mini-hub but something more like a large auto dealership service department.  This will call for smaller capacity HVAC systems to serve the smaller spaces but also have the sophistication to respond to carbon monoxide concentrations as delivery vehicles move in and out of the space.  And because all of this will be driven by computers what will be the data processing and data transmission demands?  These buildings will likely be "hybrid" facilities with a need for both simple and sophisticated HVAC solutions depending upon the part of the building that is in use.