Mad Dash to Meet Demands of E-Commerce Shoppers Creates New Shopping Hubs

Distribution Warehouse Shopping Center

The efforts of Amazon and Boxed to meet the immediate demands of e-commerce shoppers are hastening the decline of traditional shopping centers. Shopping center vacancies are on the rise in both urban and suburban areas.  Department stores such as Kohls, Macys and Sears are getting ready to close dozens of stores across the country.  These department stores were historically considered to be the anchor for many malls and shopping centers.

Many cities are razing traditional downtown shopping districts, and replacing them with hotels, office buildings and new housing developments.  Suburban malls are changing what they offer and are drawing customers to higher-end restaurants and entertainment centers offering golf driving ranges, skydiving simulators and wall climbing.

The big winners in all of this are warehouse distribution centers. These new shopping hubs are located around industrial corridors and according to Boxed founder Chieh Huang, “are now really desirable” locations.  These are nondescript fulfillment centers which are designed to go unnoticed and are in areas where people would not think to shop. They are located in industrial parcels in vacant areas close to and inside cities, and are near railroad tracks and the interstate.

David Egan of who leads research on industrial markets for CBRE Inc. told the Wall Street Journal (www.wsj.com) in a recent report that these industrial corridors are experiencing “a bit of an economic renaissance.” He added that “industrial corridors that used to be centered around manufacturing—now they’re centered around distribution.”

Increasingly household items are being bought online and are typically moved through Box.com or Amazon fulfillment centers, destined for the online retailer’s customers.  Warehouses are becoming a part of everyday life as the network of e-commerce sites grow. Instead of spending time during the day going to a shopping center to purchase goods, shoppers can now purchase these items at the click of a few keys on their mobile devices in just a few minutes.  The warehouse located in a nearby industrial district handles the transaction from start to finish, and the shopper never has to leave their home.

Source: Wall Street Journal, “The New Shopping Hubs for Cities: Warehouse Distribution Centers,” April 16, 2017, Erica Phillips

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