As someone who’s pretty much hated retail shopping since he was old enough to be dragged to a mall by his mother, I’m probably a little too predisposed to Jeff Jordan’s analysis that e-commerce is killing physical retail outlets:
I believe we’re approaching a sea change in retail where physical retail is displaced by e-commerce in a multitude of categories. The argument at a high level:
- Online retail is relentlessly taking share in many specialty retail categories, resulting in total dollars available to physical retailers stagnating or even declining. This is starting to put intense pressure on their top lines.
- Physical retailers are very highly leveraged and often have narrow profit margins. Material declines in their top lines make them unprofitable and quickly bankrupt.
- Online retail will benefit greatly from the elimination of their physical competition and their growth should accelerate.
Need to check out the contra-commentary, and the argument rests a little too much on the singularity of Amazon, but the premise feels sound to me.
If this pans out, my question is what happens to all the physical space and local talent that supports big box outlets and malls? Does Main Street make a comeback? What do you do with vast stretches of strip malls like Rockville Pike in Maryland? How about more open and green spaces as folks shift to even more knowledge work and personal services? More home-based businesses or co-working?
Living in the exurbs of Loudoun County, VA, I’m hard pressed to envision what the region will look like in a generation from a commerce perspective. Leesburg Premimum Outlets better look out.