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Brick And Mortar Retail Is Getting Killed


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#41 earlpearl

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Posted 04 January 2015 - 12:30 PM

Here  is another article on abandoned malls.  I worked in commercial real estate, enjoy "spaces" and find the phenomena fascinating, let alone am stunned by the pictures.  Some of the examples from the article are properties with which I'm familiar.  From a perspective of the Washington DC area its interesting related to abandoned malls:  DC has a huge population and an enormous overall and widespread high income.  Its been a magnet for retailers for decades.  White Flint Mall (is closed-doesn't have a website anymore) was EASILY the STAR shopping destination in the DC suburbs when it opened and maintained incredible shopping attractiveness for decades.  I leased space there.  It is located midway along one of the greatest retail/highest volume, retail corridors in the US, with enormous demand, surrounded by tremendous income, and it failed.  

 

I do believe its more from competition and over building of retail than the impact of ecommerce overall, though ecommerce certainly eats away at shopping in brick and mortar.  When White Flint first opened it regularly drew customers from North of Baltimore....an entire different metro region.  Now its ghost town ville.  

 

The greater DC region, even with way above average incomes, and consistently growing population is home to its share of abandoned malls as with other parts of the nation.

 

No doubt the US is crazily over retailed.  Compared to every other nation it is hugely over retailed, no matter how one calculates the numbers:

 

If it aint ecommerce, its the competition.  Small business is tough!!!

 

The massive US bubble that no one talks about

December 5th, 2012 19:55:48 GMT by Adam Button View Comments

The US has a massive oversupply of retail floor space.

retail-sq-footage-330x202.png

The US has 23 sq feet per capita of retail space (but as much as 46.6 sq feet). It’s difficult to come by reliable numbers, but that compares to 14 sq feet in Canada, 6.5 sq feet in Australia, 2.3 sq feet in France and 1.1 sq feet in Italy.



#42 EGOL

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Posted 04 January 2015 - 01:32 PM

I live where there are numerous small towns that were prosperous in the first half of the 20th century and then suffered slow decline as "shopping plazas" and a couple of tiny malls drew their retailers away.  Computers have cut into all of the bookkeeping, drafting, typeset, correspondence and other jobs that were done on the upper floors of these buildings.  Parking is a hassle downtown especially in winter.  Now there are lots of buildings with few to no tenants on second, third, fourth and upper floors.  Those original shopping plazas and tiny malls have been defeated by larger malls, walmarts and big box plazas that have sprung up.   Now you have derelict real estate.



#43 iamlost

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Posted 04 January 2015 - 03:24 PM

That's what happens when you switch from making to consuming. A 'consumer" economy can not be sustained over time.

Note: a healthy consumer base is great creating a foundation for local making but when the balance tips...

The switch to eComm is more of a cost savings effort that prolongs but does not change the prospective outcome (sort of like shale oil where most of the future numbers are delusional).

And I see the financial industry right back at 'packaging' crap as investments...

 

The future is not looking pretty for the overall economy.



#44 earlpearl

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Posted 04 January 2015 - 04:02 PM

That's what happens when you switch from making to consuming. A 'consumer" economy can not be sustained over time.

Note: a healthy consumer base is great creating a foundation for local making but when the balance tips...

The switch to eComm is more of a cost savings effort that prolongs but does not change the prospective outcome (sort of like shale oil where most of the future numbers are delusional).

And I see the financial industry right back at 'packaging' crap as investments...

 

The future is not looking pretty for the overall economy.

 

Iamlost:  I wouldn't attribute this entirely to the switch from a "making economy to a consuming economy" but I suspect that has soemthing to do with it.   Overall the movement to ecommerce is not the only element that impacts brick and mortar.  Competition has a lot to do with it.  The US is heavily "over retailed" compared to every other nation.

 

As the world switches over time, trends as EGOL described above certainly hits the local economy and impacts commercial real estate as he described.  I've seen it in regions far denser than the areas he hit.

 

The most recent article referenced some sites and locations with which I'm very familiar and retail corridors that I used to lease up.  One interesting reference from that article was that it cited a retail owner/developer from Australia and it referenced a mall in DC that has gone totally dark, White Flint.

 

The Australian group purchased a competing mall from White Flint long ago.  Long ago White Flint was dominant over the one purchased, now the one owned by the Australian group is Way dominant and the change occurred over many years, decades in fact.

 

I'd like to say I can explain all of it.   But I can't.  :dazed:

 

Gotta say though that I find it fascinating.  I'd bore you with some of the anecdotal stories of leasing space and representing tenants (including tenants from around the nation (world) wanting to have locations in that area.  But some of the stories were sort of funny.

 

Ah well....back to the internets!!!!!!  :D



#45 earlpearl

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Posted 06 January 2017 - 11:01 AM

One year since the last post here and one of if not the largest one time announcement in which enormous amts of brick and mortar retail is closing 

 

Macy's and Sears (KMart and Sears) are closing BIG Beucoup number of stores laying off a significant number of people.   Huge hit on the retail side.  Retail sales continue to migrate to online sales and retail takes a beating. 

 

The trend continues and it seems to be accelerating.  On the retail side there is stratification between "high performing" and luxury type shopping centers vs low performing and more basic sales with the the properties that don't support luxury sales taking an enormous hit on the retail sales side and then sporting enormous amounts of vacancy.  There are less low paying low skill retail sales jobs around. 

 

The changes have far reaching implications.  



#46 bobbb

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Posted 06 January 2017 - 11:21 AM

BUT wait....  relief is on the way.... in exactly 14 days today the 6th. It will all be great again. B:)

This is a disguised political statement


Edited by bobbb, 06 January 2017 - 11:24 AM.


#47 earlpearl

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Posted 06 January 2017 - 11:30 AM

BUT wait....  relief is on the way.... in exactly 14 days today the 6th. It will all be great again. B:)

This is a disguised political statement

(fortunate to be living in Canada)  



#48 bobbb

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Posted 06 January 2017 - 12:03 PM

Umm most of us live 50-60 miles from the US border. So when the big elephant rolls over in its bed we feel the ripple in the wave. The Inuit up north are safe. :rolleyes:

 

But getting back to the article, we have bought about 3 big ticket items from Sears over the last few years. It's now a liquidation centre in a mall with Walmart and Staples.


Edited by bobbb, 06 January 2017 - 12:05 PM.


#49 EGOL

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Posted 06 January 2017 - 12:20 PM

Brick and mortar is taking a hit because online shopping volume was up 16% in 2016.  Also, TV retail is growing rapidly and that isn't being talked about very much.



#50 earlpearl

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Posted 06 January 2017 - 01:13 PM

I totaled up one of the reports on the Macy's closings and found about 4500 layoffs from store jobs and a closing of 12 million ft of retail space.   Then I was listening to some talking heads and they described how these big retailers are completely and dramatically WAY behind web based retailers// ie Amazon as a prime example and are getting killed in that regard.

 

Probably the case.  It reminds me of of the hotel industry wherein the OTA's (on line travel agents) which are solely web based entities simply crushed the hotels on the web.  Not sure if that analogy holds or not.

 

Looking at the numbers those big stores are and have been meagerly staffed....and it shows in my experience as you shop there, get no help, can't find help if you look....and frankly you might as well shop on line for the lack of help.

 

In any case these large numbers simply signify how fast these changes are occurring.  The world can change very rapidly.  Coping with it is difficult.



#51 bobbb

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Posted 06 January 2017 - 02:23 PM

Looking at the numbers those big stores are and have been meagerly staffed....and it shows in my experience as you shop there, get no help, can't find help if you look....and frankly you might as well shop on line for the lack of help.

Funny how before you went to a b&m like Best Buy to get your info before buying online elsewhere to save and now you it's vice-versa if you want to buy from a b&m.



#52 earlpearl

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Posted 06 January 2017 - 02:30 PM

....and then there is this news today about the Limited

 

Okay, so I never shopped there...but this was one of the most popular women's wear stores in malls and in busy downtowns for decades.  Hey ladies, evidently big sales in every location if there is one near you...but the sales may end tomorrow per the news.  Their HQ isn't talking.



#53 EGOL

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Posted 06 January 2017 - 03:06 PM

These big companies, run by professional retailers and bean counters, advised by whole boards of directors,  with input from psychologists, bankers, gurus and consultants, are going bankrupt.  Why havn't all of us pissants been run out of business yet?



#54 earlpearl

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Posted 07 January 2017 - 11:13 AM

These big companies, run by professional retailers and bean counters, advised by whole boards of directors,  with input from psychologists, bankers, gurus and consultants, are going bankrupt.  Why havn't all of us pissants been run out of business yet?


Smarter???

#55 jonbey

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Posted 07 January 2017 - 04:32 PM

Old big companies take too long to change. Here in the UK we hear about how Marks & Spencer are struggling yearly. But they never seem to change, at least, not in any way that is obvious. The high street stores look the same as they did 20 years ago, and while their website does look nice, I never see it in the search results for anything I buy. On the other hand, newer companies are focusing first on the Internet and worrying about the high street later. Most are in warehouses out in the sticks with much reduced overheads and can afford to undercut the established players, while providing a better customer service with easier parking, more personal service and quicker responses etc. 

 

At the end of the day, most consumers will buy from whoever charges less, and the old big players have too many bean counters and directors to allow them to cut prices and compete.



#56 iamlost

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Posted 07 January 2017 - 08:08 PM

The problems with many/most companies are (1) inertia (and the bigger they are the more they have to try and overcome - when I was in the navy aka before the ships I served on became artificial reefs they (~3,000 tons) could come to a crash stop in 2-1/2 boat lengths while a super tanker of the time would need 15 minutes and 3-kilometres; organisations are surprisingly similar), and (2) if it's out of their comfort zone they can't get a grip.

Perhaps the greatest 'don't get it' of all time was Xerox who simply decided (after a decade of investment in Xerox Park) they were a copier company and so the future of SME/consumer computing went elsewhere; big companies fumble the future every day.

Newspapers had test labs and were trialling cool internet stuff in the 80's before the web and in the 90's with the web but, just as with Xerox, it never got out of the lab; at least not in their hands. In late90's I had my most complex contract job, a 2-year build a multi-dimensional array database with GUI (a way out of my depth job on the bleeding edge of what was then possible that I got done in 22 months; go me! :)) One of the people that gave me help when I whimpered on listserv and icq (remember them?) had worked on the future of newspapers in the early-mid-90s at the Knight-Ridder Information Design Lab. What was that future?
Note: in reading the following realise that is was written in 1995:

The world is rapidly becoming digital and newspapers are evolving into electronic products. But computer-displayed newspapers have a number of limitations which will likely prevent their widespread acceptance. A solution to the display dilemma can be found in the rise of the tablet newspaper.

The tablet is a portable information appliance that weighs under two pounds and offers a resolution comparable to ink-on-paper. It can handle text, images, sound, and moving images. Some of that information takes the form of newspapers, while others may be books, magazines, financial statements, utility bills, or a host of other items that are today displayed on paper.

The tablet is not a personal computer as we know it today. The tablet is easy to use and requires no manual. It is not tethered to an electrical outlet. People use it to interact with information. Typical PC applications are word processors and spreadsheets, in short, data creation tools. Typical tablet applications are newspapers, books, and e-mail, in short, data use tools.

The Knight Ridder Information Design Lab is developing a newspaper interface for the tablet device. The tablet newspaper draws on the strengths of print and on the strengths of electronic forms. It is both browsable and searchable, both broad-reaching and customizable. It offers pages with story abstracts linked to more detailed stories, background material, photos, sound, and video. People can ran read as deeply or as casually as they want. Stories are no longer limited to "news hole," the space allotted to editorial content after press configurations and advertising have been considered.

The tablet newspaper includes editorial content and advertising, both important components of a local information package. Like editorial content, advertising can have many layers, and can be searched and sorted, as well as browsed. Additionally, ads can have transaction hooks, so that readers can make reservations or purchases.

Packaging and design are also important components of the IDL vision. The tablet has a vertical orientation, a form that has developed over thousands of years and has become optimized for displaying textual information. The tablet interface uses type sizes and styles as visual clues to what lies beyond. These visual clues are ones that we have all learned since childhood and are second nature to us. Branded identity is an important part of a newspaper product, and the tablet enables publications to keep their well-known look and feel.

An electronic newspaper, displayed on a tablet, is able to combine the best of the past, present, and future.

Later that same year they closed the lab:

Knight-Ridder (US), information services and newspaper concern, has closed its Information Design Laboratory, Boulder, CO. For the time being, the closure signals the end of the company's Tablet system for delivering newspaper text electronically to portable digital devices. Tablet is much further into the future than first thought, according to Anthony Ridder, Knight-Ridder president.

They grasped the future, had it well in hand, then deliberately let it slip away.
It's like déjà vu all over again.
---Yogi Berra

Note: at the time Knight-Ridder had a higher profit margin than Exxon.
Note: Apple profited from both failures to execute.

Note: in putting my webdev business plan together in 1999/2000 I considered the above very very carefully. And most webdevs haven't a clue what might have been. They think that today is 'new'. And what they think is the 'future' almost certainly isn't.

There are none so blind as those who will not see. The most deluded people are those who choose to ignore what they already know.

---John Heywood, 1546

 





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