March 22, 2017 (STLRealEstate.News) It’s been a rough few years for retail stores unable to compete with the rise of online shopping and the domination of Amazon.com. The mammoth delivery platform is able to promise consumers same-day delivery on products they can purchase right from the click of a mouse. The convenience is unmatched, and more on-the-go individuals are opting for the Amazon experience over any other type of retail purchasing. As a result, retailers nationwide are closing down and selling property, especially American malls. It’s not a pretty site, but it’s one that is a daily reality unfortunately today.
The problem is that Amazon has made major investments in its logistics networking, buying 1M SF distribution centers, closer-in 500K SF fulfillment centers and a wide network of last-mile depots where products are taken to their destination. It’s also planning to increase its vehicle delivery network as it aims to be on par with FedEx and UPS. Amazon has been able to make these investments because the company’s investors provide it with the capital to not worry about the short-term effects. Today, the company can guarantee free, two-day shipping to 65 million Amazon Prime customers, and offer same-day delivery in a few dozen markets, making it even harder for traditional retailers to keep up.
Mid-size to large retailers are struggling to keep up with their expansion rates. For most stores, the first step to drawing people away from Amazon and into their physical stores is to offer in-store pickup for online purchases. But, offering this service requires more labor demands and having a round-the-clock staff waiting to present this kind of service.
Even more, these stores know they have to provide at-home delivery as well. They simply don’t have the network Amazon does, so they are trying their best to come in second place.