The premise of the article, although focused on the U.S. retail marketplace, should be considered by everyone in the retail/consumer sector and retail/development/investment sector.
The author, traces the history of big-box retail and makes the compelling argument that the era of big-box retail dominance may be coming to an end. The consumer market was initially fuelled by an inflated stock market and loose credit. The housing boom provided further impetus to the retail consumer. Then came the crash. Although the consumer is now coming back to life, there is a new threat to the big-box retailers ( and in my mind to many other traditional retailers), that being – the increased confidence being shown by consumers in making online purchasers.
The article details the affects that this trend is now having on the big-box retailers. The “click and buy” consumer is not only grabbing market share from the likes of Wal-Mart, Best Buy, Target etc., but also from the more traditional retailers. Several weeks ago, GAP announced that it is re-evaluating both the number of retail locations, and the size of those locations as lease terms start coming due.
There is no question that Amazon.com and its competitors are grabbing market share. Furthermore, the traditional retailers are also expanding their online presence. So will the trend to smaller stores and fewer locations become commonplace?
Although I do not think that this new reality will result in a dramatic shift in “brick-and-mortar” retailers, it should be a consideration to those analyzing the growth prospects of the development/investment market. Additionally, do not be fooled by the robust retail development/investment marketplace in Canada. The shift is and will continue to occur here as well!
