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Old Posted Jul 20, 2020, 5:53 PM
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The Next Phase Of The Retail Apocalypse: Stores Reborn As E-commerce Warehouses

The Next Phase Of The Retail Apocalypse: Stores Reborn As E-commerce Warehouses


July 18, 2020

By Christopher Mims

Read More: https://www.watertownworks.com/the-n...ce-warehouses/

Quote:
.....

Welcome to the next phase of the “retail apocalypse.” This conversion which Sam’s Club has also completed for five other big-box stores throughout the country is part of a burgeoning trend in which retail spaces of all sizes are being converted into e-commerce fulfillment centers. The global pandemic may have turbocharged the shift from bricks-and-mortar retail to online shopping, but the rate of conversion of retail into industrial spaces has been accelerating for years, says Matthew Walaszek, associate director of industrial and logistics research at the world’s largest commercial real-estate services firm by revenue.

- Since 2017, 60 new retail-to-industrial conversion projects have entered at least the preplanning stage, out of a total of 94 such projects completed or in progress in the past decade. Projects begun or completed since 2017 transformed 14 million square feet of former retail space into 15.2 million square feet of industrial space, most of it for e-commerce distribution. That’s still a relatively small proportion of the 14.5 billion square feet of industrial real estate in the U.S. — Between these two extremes are medium-size retailers catering to middle-income Americans, many of which are looking to add e-commerce fulfillment to their existing stores. A number of big grocery chains across the globe, including Albertsons Cos., Wakefern Food Corp. and France’s Carrefour SA, fall into this category. They are using or planing to use almost fully automated micro-fulfillment warehouses either within existing stores or in adjacent retail spaces, says Max Pedró, co-founder and president of Takeoff Technologies, which provides them with automated systems.

- Takeoff’s 10,000-square-foot micro-fulfillment centers hold the portion of a typical grocery store that represents most of its sales, or around 15,000 different item types. They make extensive use of robotics and automation to retrieve groceries from shelves, and so require little in the way of human labor to operate until the final stages of each order. These automated systems are meant to assemble and pack orders more efficiently than employees roaming aisles or visiting stockrooms, and keeping the fulfillment center next to the store has additional benefits. — Many big retailers, including Walmart, Target Corp. and, in its forthcoming grocery stores, Amazon.com Inc., are taking a related but distinct approach: shipping directly from stores. Even stores that have begun offering curbside pickup amid the pandemic are, in a way, becoming part of the trend. — Each business that decides retail space might be better used for filling e-commerce orders does so for its own reasons, but two intersecting trends play a big role. Retail stores and shopping centers were closing on account of declining foot traffic even before the pandemic.

- One economist who has looked at these trends has concluded something surprising: When you include all the jobs in fulfillment, delivery, and related roles, e-commerce has created more jobs between 2007 and January 2020 than bricks-and-mortar retailers lost, says Michael Mandel, chief economic strategist at the Progressive Policy Institute, a think tank. Since January, employment in this sector has fallen, but Dr. Mandel believes that as consumer spending recovers, so will employment in this area. While it’s easy to see these trends as broad abstractions, they’re also why Ms. Thomasa mother of two living in a small southern town has a job, and a pay raise. Every day, she goes to the same building she worked in for over a decade before it closed in January 2018. There are some differences. — The sign says Samsclub.com instead of Sam’s Club, she says, and the parking lot is full of tractor-trailer trucks. Inside, things have changed more. There’s more merchandise, new conveyor belts, a shipping area. “Sometimes I’ll catch myself walking the floor and picturing what it used to be,” she adds. — If trends continue, then in terms of jobs, real estate, consumption patterns, supply chains and land use, as Lumberton, N.C. goes, so goes the nation.

.....



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  #2  
Old Posted Jul 20, 2020, 6:59 PM
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With the brutal efficiency of capitalism, it seems like a no brainer to move from big box retailers to big box distribution centers. Kohl's is so desperate for foot traffic, they became an amazon returns destination.
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Old Posted Jul 20, 2020, 8:15 PM
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While not exactly existing retail space being turned into distribution centers, we've seen 3 full malls in Cleveland be demolished and Amazon centers built on the sites. First was the Euclid Square mall to the northeast of the city in 2018, then the Randall Park mall to the southeast (once the largest mall in the country) a few months later. Construction on the site of the former Rolling Acres mall, famous for it's snow covered escalators in dead mall lore, is finishing up now. It's still rumored that the Midway mall in Elyria (west of the city) will be the next Amazon site. Each of these have added close to the amount of jobs that the malls themselves previously employed, and we are already seeing spinoff development around them. Cleveland really lucked out with our Amazon fulfillment centers. All of them have been blighted brownfield redevelopment in in inner suburban areas (as well as two new builds finishing up in Cleveland proper), instead of the exurban greenfield development that seems to be the norm.

Have we learned about over retailing ourselves to prevent these dead malls in the future though? Of course not. A new mall/lifestyle center, Pinecrest, just opened up 2 miles away from the old Randall Park mall (and 3 miles from Beachwood Place mall and half mile from Eton)...
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Old Posted Jul 20, 2020, 8:24 PM
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There has got to be over a billion media think pieces written about the "retail apocalypse" at this point.
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Old Posted Jul 20, 2020, 8:29 PM
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It will be interesting to see how life will change during this first part of the 21st century. Department stores, brick and mortar retails, and shopping malls seemed like a permanent feature of American Life growing up in the 90s-2000s. But now, just as they tried to replace mom and pop businesses, they will eventually be replaced by Amazon and other E-commerce giants. Might as well get ready for the shift.
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Old Posted Jul 20, 2020, 11:36 PM
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Originally Posted by The North One View Post
There has got to be over a billion media think pieces written about the "retail apocalypse" at this point.
The example used in this article, which seems to have been taken from the Wall Street Journal's original effort (using even the same photos)-- https://www.wsj.com/articles/the-nex...s&page=1&pos=1 --is Sam's Club which has always been a second sister to CostCo because it's hard to differentiate the membership store from the free Walmart stores and because CostCo is just better run. Because Sam's has always been shaky, makes sense to use the real estate to bolster Walmart's so-far quite successful effort to get into e-tailing and eventually compete seriously with Amazon. But I'm not sure the venture generalizes all that widely.
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Old Posted Jul 20, 2020, 11:41 PM
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Originally Posted by jd3189 View Post
It will be interesting to see how life will change during this first part of the 21st century. Department stores, brick and mortar retails, and shopping malls seemed like a permanent feature of American Life growing up in the 90s-2000s. But now, just as they tried to replace mom and pop businesses, they will eventually be replaced by Amazon and other E-commerce giants. Might as well get ready for the shift.
It's just that so often--almost every time I find myself needing or wanting something lately--I find myself thinking, "Is it worth it to drive to (fill in the store name) and see if they have what I want and, if not, go over to (fill in another store name) and so on until I find it, or should I just locate it online and have it delivered (probably for free) in 1 or 2 days"?

Online shopping has become much the more efficient way to go for things you don't need right this minute and for which shipping and a day or two in transit isn't an issue (as with, say, frozen foods or anything readily perishable).
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Old Posted Aug 10, 2020, 5:54 PM
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Amazon reportedly wants to take over JCPenney and Sears stores to turn malls into giant fulfillment centers

https://www.businessinsider.com/amaz...-report-2020-8

Quote:
.....

- Department stores in malls across the US struggling to stay in business as shoppers increasingly turn to e-commerce could soon be transformed into Amazon fulfillment centers. Amazon is in talks with Simon Property Group, America's biggest mall owner, to turn empty retail space into Amazon warehouses that process and ship online orders, The Wall Street Journal reported on Sunday. — As part of the deal, Amazon could take over anchor department-store spaces previously occupied by Sears and JCPenney, both of which have filed for bankruptcy and closed dozens of stores in recent months. Simon is pursuing an acquisition of JCPenney, which would grant it more control over how those store spaces are used, The Journal reported. — The deal could benefit Amazon by providing well-located warehouse space in cities across the US and by allowing the online retailer to decrease its delivery times on shipments. Some of Amazon's fulfillment centers already occupy spaces in old strip malls that have gone out of business.

.....
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Old Posted Aug 10, 2020, 6:06 PM
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Forget about the retail apocalypse, we're seeing a restaurant apocalypse in real time rn.

In the pandemic era we live in, shuttered Big Box retailers could become Big Box Kitchens for delivery companies like DoorDash, UberEats and others. Drivers report to the central kitchen and deliver food from dozens of restaurants, under one roof. Restaurants that are clinging to life from delivery and a fraction of capacity with outdoor tables, could now close their brick and mortars, cut overhead and labor costs and focus entirely on delivery without sacrificing quality of food.
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Old Posted Aug 10, 2020, 6:33 PM
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Amazon and Mall Operator Look at Turning Sears, J.C. Penney Stores Into Fulfillment Centers

By Esther Fung and Sebastian Herrera
Updated Aug. 9, 2020 7:21 pm ET

The largest mall owner in the U.S. has been in talks with Amazon.com Inc., the company many retailers denounce as the mall industry’s biggest disrupter, to take over space left by ailing department stores.

Simon Property Group Inc. has been exploring with Amazon the possibility of turning some of the property owner’s anchor department stores into Amazon distribution hubs, according to people familiar with the matter. Amazon typically uses these warehouses to store everything from books and sweaters to kitchenware and electronics until delivery to local customers.

The talks have focused on converting stores formerly or currently occupied by J.C. Penney Co. Inc. and Sears Holdings Corp., these people said. The department-store chains have both filed for chapter 11 bankruptcy protection and as part of their plans have been closing dozens of stores across the country. Simon malls have 63 Penney and 11 Sears stores, according to its most recent public filing in May.

It wasn’t clear how many stores are under consideration for Amazon, and it is possible that the two sides could fail to reach an agreement, people briefed on the matter said . . . .
https://www.wsj.com/articles/amazon-...=hp_lista_pos4
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Old Posted Aug 10, 2020, 6:38 PM
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Originally Posted by 0214685226 View Post
Forget about the retail apocalypse, we're seeing a restaurant apocalypse in real time rn.

In the pandemic era we live in, shuttered Big Box retailers could become Big Box Kitchens for delivery companies like DoorDash, UberEats and others. Drivers report to the central kitchen and deliver food from dozens of restaurants, under one roof. Restaurants that are clinging to life from delivery and a fraction of capacity with outdoor tables, could now close their brick and mortars, cut overhead and labor costs and focus entirely on delivery without sacrificing quality of food.

no don't forget it, because what you are describing is what retail is ahead of. that is, using big box shops and dead mall sites as a property grab and as fulfillment centers.


ie., toledo:

https://www.wtol.com/article/news/lo...6-0106851eb64a
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Old Posted Aug 10, 2020, 6:44 PM
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does anybody think the attached ingka center malls could catch on in north america with new ikeas? especially as i think they own ikea now.

https://www.ingkacentres.com/en/who-we-are
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Old Posted Aug 10, 2020, 7:06 PM
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no don't forget it, because what you are describing is what retail is ahead of. that is, using big box shops and dead mall sites as a property grab and as fulfillment centers.


ie., toledo:

https://www.wtol.com/article/news/lo...6-0106851eb64a
Retail apocalypse has been occurring like a slow moving viscous lava flow on the Big Island of Hawaii. The restaurant apocalypse has been more like a Mt. St. Helens eruption. There's a difference between the two.
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Old Posted Aug 10, 2020, 7:09 PM
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Retail apocalypse has been occurring like a slow moving viscous lava flow on the Big Island of Hawaii. The restaurant apocalypse has been more like a Mt. St. Helens eruption. There's a difference between the two.

not in the way they are using or would use old empty big box stores and malls. that is, as fulfillment centers. you described a food version of that, which of course amazon is already into.
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Old Posted Aug 10, 2020, 7:15 PM
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not in the way they are using or would use old empty big box stores and malls. that is, as fulfillment centers. you described a food version of that, which of course amazon is already into.
And so what? I'm not disagreeing retail is having problems, they have been for at least the last 5-8 years. This has been a long term trend, which is why I said forget about it, it's nothing new. The restaurant apocalypse is brand new. I heard an estimate that 50% of these places will not reopen post pandemic.
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Old Posted Aug 10, 2020, 7:33 PM
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I totally agree with the fact that we are going to continue to see a massive retail and restaurant implosion but it will be very geographically specific. It will cause a huge decline in suburban malls and big box districts but could lead to a TRUE renaissance of our downtowns.

NOBODY goes downtown to save money or for the convenience. Quite the contrary, these 2 things helped spur the growth of suburban shopping and downtown declines in the first place. Downtowns stores can't compete with warehouse big chain prices, free parking, or the convenience of not having to travel downtown especially in the US where transit is poor. Downtowns survive by the fact that they offer exactly what the suburbs don't..........interesting shops, entertainment, restaurants, culture, and urban experiences.

Many suburbanites go shopping or to awful chain restaurants for "something to do" and as those options implode, more will head downtown whether by choice or necessity.
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Old Posted Aug 10, 2020, 7:46 PM
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Originally Posted by 0214685226 View Post
Retail apocalypse has been occurring like a slow moving viscous lava flow on the Big Island of Hawaii. The restaurant apocalypse has been more like a Mt. St. Helens eruption. There's a difference between the two.
If I want a pair of shoes, I usually know what I want and what size. It's easier to order them online than drive to a store. For dining, the situation is very much different. It can be as much about the circumstances under which the food is consumed as the food itself. It can be about the companionship, what's happening before and after, the atmosphere . . . a whole lot of things.

For this reason, I don't think in the long run there will be a loss of dining options. I think there will be huge turnover as restaurants that have existed die and new ones, beginning in 6 months or so (when I expect a COVID vaccine to be a reality id not yet available to everyone), start appearing. In 2 years, dining away from home will be as strong as ever and maybe the options will be even better in some places because of innovation in the industry.

But selling shoes and pants and shirts and all manner of things people just want to possess without having to search for will become more and more an online, have it shipped experience.
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Old Posted Aug 10, 2020, 7:53 PM
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And so what? I'm not disagreeing retail is having problems, they have been for at least the last 5-8 years. This has been a long term trend, which is why I said forget about it, it's nothing new. The restaurant apocalypse is brand new. I heard an estimate that 50% of these places will not reopen post pandemic.

and so what boddy is i'm not taking about the retail apocalypse, i'm pointing out to you how your specific suggestion to the restaurant problems is in part the same as the retailers solution, which they are already out front on with. that is, the focus on e-commerce, building fulfillment and delivery.

also, amazon and others, like fresh direct here in ny, are already doing just what you suggest with food.

but as you are additionally alluding to, it's possible it could be done a lot more locally and widely. old big box stores and mall sites seem like a perfect place for mega kitchen type fulfillment sites and it would help food businesses survive, as long as it doesn't turn in to a big aramark:


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Originally Posted by 0214685226 View Post

In the pandemic era we live in, shuttered Big Box retailers could become Big Box Kitchens for delivery companies like DoorDash, UberEats and others. Drivers report to the central kitchen and deliver food from dozens of restaurants, under one roof. Restaurants that are clinging to life from delivery and a fraction of capacity with outdoor tables, could now close their brick and mortars, cut overhead and labor costs and focus entirely on delivery without sacrificing quality of food.
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Old Posted Aug 10, 2020, 9:27 PM
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Originally Posted by 0214685226 View Post
In the pandemic era we live in, shuttered Big Box retailers could become Big Box Kitchens for delivery companies like DoorDash, UberEats and others. Drivers report to the central kitchen and deliver food from dozens of restaurants, under one roof. Restaurants that are clinging to life from delivery and a fraction of capacity with outdoor tables, could now close their brick and mortars, cut overhead and labor costs and focus entirely on delivery without sacrificing quality of food.
Nobody has yet figured out how to make money delivering prepared food. The companies like Doordash charge the restaurants around 30% of the tab and to make any money, those same restaurants would therefore have to raise prices of delivered food by that much or more. Together with the 15% minimum wage and mandated health and retirement benefits in cities like San Francisco, that would put eating delivered restaurant food way beyond the means of the middle as well as the working class.

Restaurants' willingness to eat the high cost of delivery is a temporary thing. They don't expect to really make any money--only survive until they can reopen indoor dining because everybody's been vaccinated (or is willing to take the risk if not). But something has to change about the business model of the deliverers themselves in the long run.
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Old Posted Yesterday, 2:33 AM
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^ true, sit down restaurants make money on the booze markups more than food anyway.
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