How Box Retail Is Adapting To The Amazon Effect – GlobeSt.com

Landlords are backfilling vacant big-box spaces with multiple discount retailers, while Amazon explores growth in brick and mortar to complement their digital presence, says Hanley Investment Group’s Bill Asher.

 

CORONA DEL MAR, CA–Amazon has shown the retail world that today’s consumers are turning to the convenience of online shopping, but in some cases, consumers still prefer traditional brick-and-mortar stores as long as the shopping experience is easily accessible. The change is especially being felt by big-box retailers, who have been shaken by ongoing uncertainty (and a few bankruptcies) over the last year. So, how are landlords back-filling vacant big-box spaces and re-evaluating their future disposition options? They’re getting creative, says Bill Asher, EVP at Hanley Investment Group. Asher sat down with GlobeSt.com to describe the scope and impact the “Amazon Effect” is having on the category.

Asher sees e-commerce becoming more competitive in today’s retail environment. According to a recent UBS report, e-commerce represents 16% of total retail sales (excluding food and gas) which is up from 8% in 2004. The average household now spends $4,600 online compared to $3,140 just five years ago. It is projected anywhere from 30,000 to 80,000 stores would need to close to preserve low-single digit sales/store growth should the e-commerce infiltration reach 25% of retail sales by 2025.

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