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Amazon Is Gobbling Up Failed Malls [video]
- Maximus9000 7y agoThat all seems very happy-go-lucky. However, how many malls has amazon put out of business? How many malls has amazon bought for distribution centers? My guess is that ratio is not good.
- rapsey 7y agoSo what? They have become redundant so they are going extinct. Whats the problem with progress?
- chroem- 7y agoI wonder what the post-Bezos future will look like after we have a single source remaining for all our daily necessities, and Amazon enters a later stage of its corporate lifecycle and begins to go the way of IBM or GE. If we replace all other stores with just Amazon, that seems like an enormous risk to human life if Amazon starts to become mismanaged in the future.
- 24gttghh 7y agoThat already happened with Walmart to an extent, right? Not that I want Amazon to do the same thing...
- adventured 7y agoWe're not replacing all other stores with Amazon. The Amazon-takes-over-retail fantasy is not going to happen. Their online retail business is now a very slow growth business. For them to actually take over retail, they'd need to be seeing high rates of growth year after year for decades yet. At their rate of deceleration, they'll be at a mid single digits rate of growth within a couple of years. Their whole business - AWS, devices, online retail, physical retail - is going to struggle to stay above 10% sales growth in that same timeline as a matter of fact. The far bigger, more likely risk is that their traditional online retail business sees a near contraction stall four to five years out. Walmart is still doing $500 billion in sales by comparison. Unless Amazon finds a magic way to turbocharge their online growth (1 day shipping isn't going to cut it), it'll still take 20 to 30 years to just match the size of Walmart in retail, and that's if everything goes well for Amazon. What Amazon figured out, is that they can't kill Walmart via online retail (which is the sole segment that Amazon has any retail dominance). So they're increasingly exploring physical retail as their only way to grow. Wholefoods was Amazon being forced to buy their growth, it was a classic sign of a business that has lost much of its organic growth. Their days of serious retail growth online are dead.
- olivermarks 7y agoMatured rather than 'dead' - that cycle is now mostly complete
- adventured 7y agoDead was the right term. It refers to the high rate of former growth in their online retail business. That high rate of growth is dead. The business is mature. I didn't say the business was dead.
- bluedino 7y agoSince half of Walmarts revenues are from groceries, I wonder how much of a difference it would make if you coud use food stamps at Amazon
- tracer4201 7y agoYour post is inaccurate. WalMart still beats Amazon handsomely in terms of revenue, not to mention, Amazon only recently shifted to profitability, and now their growth is declining. This notion that Amazon has retail market capture or is close to market capture is completely inaccurate.
- sjg007 7y agoI mean, we had Sears previously. That is the direct analog of Amazon. I think you will always find boutiques, hybrid supermarkets and then destination like experiences. People will pay for convenience and last minute availability. Also, Amazon is filled to the brim with Chinese crap.
- delfinom 7y agoAmazon has gotten really bad since they opened the floodgate to Chinese crap. Alot of it is shady as fuck.
- mimixco 7y agoIBM and GE are both 100 years old, so Amazon still has plenty of room left in its game.
- jawns 7y agoFrom this biography of John D. Rockerfeller: > In 1870, he established Standard Oil, which by the early 1880s controlled some 90 percent of U.S. refineries and pipelines. Critics accused Rockefeller of engaging in unethical practices, such as predatory pricing and colluding with railroads to eliminate his competitors, in order to gain a monopoly in the industry. So what? Those competitors have become redundant so they are going extinct? What's the problem with progress? Even if you give Amazon every benefit of the doubt regarding the ethicalness of its business practices, the fact remains that monopolies, and near-monopolies, are dangerous. We know what happens. We have hundreds of years of history to look back on to see what happens.
- bmmayer1 7y agoIn what way is Amazon a monopoly or near-monopoly?
- johnwheeler 7y agoThey’re nearly 50% of US e-commerce and growing. Retail spending online is growing double-digits year over year. It’s not too hard to see the writing on the wall. Whether or not this is good or bad is a separate argument, but there’s no doubt there’s an issue with its competitive dynamics.
- tracer4201 7y agoHow does that make them a monopoly? As a matter of fact, their platform is open to third party sellers now (which IMO has hurt their quality of service). Is 50% the magic number that deems an entity to be a monopoly? What is, and who decides? WalMart is still leaps ahead of Amazon in revenue. It’s disingenuous and you point out a percentage metric, which is very misleading, but don’t compare hard numbers such as revenue.
- johnwheeler 7y agoWell, you just have to use common sense. It’s not like they’re 50% of the shoe button business; they’re 50% of online retail. You’re being disingenuous because you write as if that number is meaningless.
- hvoiiita 7y agoI'm originally from Euclid, one of the malls Amazon is snapped up. The area has been dilapidated for a while as it's a popular white flight city for East Cleveland transplants. I remember ~15 years ago it was just Sears left.
- olivermarks 7y agoGreat business logic for centralizing and automating retail distribution centers around existing infrastructure and transportation. The issue is only a small number of huge malls will be converted and competing small business shop fronts are being rendered non viable which is creating significant economic repercussions
- burnte 7y ago> The issue is only a small number of huge malls will be converted and competing small business shop fronts are being rendered non viable which is creating significant economic repercussions How is turning malls into warehouses affecting small stores?
- olivermarks 7y agocentralizing delivery. It's no longer cost effective to go to a store, look for a product, pay for it and return home when it is cheaper to have it delivered at a specific time and day in both time and money. Small specialized businesses can't compete with this to charge the margin they need for rent and overheads. This is putting lot of shops out of business, redundancies etc
- rossenberg79 7y agoWhy should we care if they go out of business? If they shutdown and bow out won’t newer, useful businesses pop up in their place? I see no reason to treat a small shop like an endangered species that must be preserved. Preserved for what? Most people won’t go there anymore. Example: There was a fairly large Mom and a Pop retail store here that shutdown once Walmart moved in. What opened in its place? A massive rock climbing facility with 40 foot walls. It has enriched the community and given people something to do other than just roaming aisles looking for crap to buy and not talk to each other.
- bognition 7y agoThe general sentiment is that small businesses are owned and operated by our neighbors. Part of a healthy society is having a group of people with diverse backgrounds, interests, and jobs all living together. Amazon's march towards a global monopoly is partially responsible for homogenizing our society.
- michaelbuckbee 7y agoThe WSJ video doesn't get into it, but the fall of US Malls has more to do with changing tax code [1] than with Amazon (though that's still a part). They were on the way out before Amazon + eCommerce got big. FWIW - I'm actually from that region of Ohio and think this is a positive step. There's a lot of other factors that go into this of course (shifting demographics, overall population drain), but on the whole, this seems positive. 1 https://www.smithsonianmag.com/arts-culture/death-and-rebirth-american-mall-180953444/ https://www.smithsonianmag.com/arts-culture/death-and-rebirt...
- xadhominemx 7y agoI've spoken to a number of retail execs and mail owners about this (the latter, like all real estate investors, are tax experts), and they definitely think it's mostly about e-commerce
- bobthepanda 7y agoMalls are failing largely because anchor tenants are dying. Sears, JCPenny, and Macy's all had horrible management over the past decade. And the department stores have faced huge competition for decades, whether it's Walmart offering cheaper goods or stores like H&M or Sephora that specialize in a specific category. My experience of department stores have been of unorganized, more expensive stores with a confusing, mediocre selection; why would I want to shop there? On top of all that, America is over-retailed compared to other developed countries: https://amp.businessinsider.com/images/5bb37815ac0a6314735194e8-960-758.jpg https://amp.businessinsider.com/images/5bb37815ac0a631473519...
- xadhominemx 7y agoYes as one RE exec likes to say, American retail is under-demolished
- rmason 7y agoSadly this came too late for Detroit's Northland, the first shopping mall in the country. Because it was built first they guessed at how a mall should look. They thought it would be important to resupply stores without getting in the way. So they built this huge basement that allowed dozens of semis to pull up to loading docks below the stores. The basement was huge and had Amazon not wanted to use it to unload trucks they could have had a second warehouse as large as the one above. I remember thinking at the time this would make an incredible supply depot but Amazon didn't immediately come to mind. The mall was torn down and in a twist of fate the land was offered to Amazon as a possible property for their HQ2 headquarters. My guess is it will end up as an apartment complex. https://en.wikipedia.org/wiki/Northland_Center https://en.wikipedia.org/wiki/Northland_Center
- ergothus 7y ago> the first shopping mall in the country Northgate Mall in Seattle would dispute that: https://en.wikipedia.org/wiki/Northgate_Mall_(Seattle) https://en.wikipedia.org/wiki/Northgate_Mall_(Seattle) . Northgate itself is older than Northland, but the claim "Northgate was the first regional shopping center in the United States to be described as a mall" is "[citation needed]"
- btgeekboy 7y agoIt’s also not going to be around much longer in its current form.
- mimixco 7y agoFascinating. Amazon is not only eating retail, it's eating logistics like UPS, cargo airlines, and trucking.
- Wheaties466 7y agoThis sounds like a Wendover productions video. Does he work for WSJ now?
- ethagknight 7y agoTLDW: Old mall sites are very large, close to population centers, are typically located on interstates, and have existing large utility connections and so can be fast-tracked to converted distribution center.
- romwell 7y agoGood. As far as I'm concerned, all malls should (and will) die. They are a scourge. Some hold nostalgic feeling for them because they were the only thing close to a social hub at the time (whereas malls are one of the reasons social hubs aren't there in the first place). Go malls, go. I ain't shedding tears for thee. After all, I'm in good company. The guy who invented the malls hates them too[1]. [1]https://qz.com/454214/the-father-of-the-american-shopping-mall-hated-cars-and-suburban-sprawl/ https://qz.com/454214/the-father-of-the-american-shopping-ma...
- chriselles 7y agoI remember popping into three Vallco Mall in Cupertino a few times between 2016-2018. Low occupancy and eventual death. It was like watching an elephant die in National Geographic documentary, in slow motion. The “wrap” fake imagery on walls covering empty stores to make them look generically occupied were surreal. Like something out of a North Korean Potemkin Village.