It seems that wherever we travel, we note the construction of regional massive distribution centers and mixing warehouses. It seems as though Internet retailers are fixated on being able to deliver goods to consumers within a day, if not the day of the order.
Yet we still witness the development of shopping centers, predicated on the notion that consumers are prepared to spend extensive amounts of time visiting stores to review alternatives and to place their orders.
We have long been in the habit of researching the Internet for our needs and in most cases placing an order. If you start with Amazon.com, you may not need to look further.
We fear that many shopping centers and malls are in jeopardy. And once tenant occupancy drops below a critical threshold, a downward spiral may result. In the not too distant future, many of the malls, big box stores and shopping centers may become almost worthless and possibly even be abandoned. This will create blight in the suburbs and greatly reduce taxes from real estate, thus adding to our social woes.
Have you seen the numbers out on retail? Generally not good. Even the best, Macy’s seems to be struggling. So called “outlet malls” and specialty stores seem to be holding up. Women like to view a selection of options, run their hands over the fabrics and try things on. And honestly, I’ve been disappointed by some generic items, like pants, that I’ve bought online, that I wouldn’t have taken home had I seen them in a store.
Central PA has a clear location advantage in my mind when it comes to the dynamics of the changing dynamics of retail. The major retailers, such as Nordstroms/Urban Outfitters, are building their distribution centers here for a reason. These fullfillment centers will provide the job and real estate taxes lost if and when the retail centers are downsized. Just the investment in the two fullfillment centers that I mentioned previously were each over $200 million in land and building costs.
While it is true that many of the jobs at these fullfillment centers are not well paying, you can say the same for retail. However, it is often lost that these centers provide a good number of good paying IT and logistic jobs that are required to operate, maintain, and repair the very automated picking and packing operations.
We should not fear the future, we should embrace it. There will be winners and losers and we have a good opportunity to be among the winning communities.