Online shopping during the pandemic is reshaping the retail experience
“Commercial space available.” These three words are everywhere. I have just returned from a short trip to Chicago. I stayed at a hotel in the River North area, a short walk from Michigan Avenue and the surrounding shopping district.
The Magnificent Mile – what Michigan Avenue is north of the Chicago River – had those three words on about 25% of all retail outlets. Shocking. Something I have never seen as a longtime Chicagoan, even after the Great Recession. The pandemic has hit retailing hard.
In New York City, the Manhattan retail collapse has been well documented. In this case, it was the disappearance of some 400,000 daily commuters from the tri-state area to downtown, or the equivalent of all of Sarasota County, simply walking away for 16 months.
In Sarasota, Bradenton and much of Florida, we experience a similar reality, although many of our retail positions are located in malls and strip malls. Shopping centers have a lifespan. Even before COVID-19, there were “ghost malls” in Florida as 1970s malls gave way to 1990s malls with more amenities. It all took a hit when the UTC regional shopping center and surrounding area was developed.
Our region, like the rest of the country, was over-marketed before the Great Recession. It has gutted the retail business due to oversized, growth-driven retail chains that crumble under debt and lack of customers. On a per capita basis, the United States was by far the top trading country in the world, even after this recession. Then the virus took its toll.
I have predicted the collapse of physical retail for 13 years. In October 2008, I wrote in a blog column:
“In January and February  there will be several bankruptcies of distribution chains, particularly in the clothing sector and the middle market of department stores. Many chains will avoid bankruptcy but will close stores and fall back to survive. Retail is dependent on debt financing that is not readily available and a robust holiday season, which will not happen. “
âThese bankruptcies will contribute to an unemployment rate that will certainly reach high single-digit numbers in the United States, and possibly higher elsewhere in the developed countries of the world. Vacancy rates will rise in both shopping malls and office buildings and complexes. has put a strain on commercial real estate, resulting in defaults, fire sales and consolidations. “
At the beginning of 2009, I wrote:
“Retail is in free fall. There will be many bankruptcies in the United States and around the world in the first quarter. Led by the apparel industry, many chains will go bankrupt or close many stores.”
“Shopping centers will be closed as vacancy rates skyrocket and major commercial properties default, starting first with properties bought with a lot of leverage over the past three years.”
As I expected in January 2011:
âThe brick and mortar retail industry and therefore commercial real estate will undergo the greatest transformation in the next 10 years since the introduction of the automobile. Chains will close, separate retail categories will merge, 20th century malls will close. Online shopping in our screen reality is reshaping shopping in our physical reality. “
Physical retail has been challenged and diminished by online retailing, particularly Amazon. Online retailing has been the only general retail industry to expand over the past 15 years. The pandemic has further accelerated this situation. In 2020, a year of physical retail collapse, Amazon hired 1.3 million new employees globally.
I’ve been an Amazon fan since the late 90s. Then it’s because I saw the future in their vision. Since then, I have become a most loyal customer. They have the lowest prices, they know what I like, my sizes, they have a record of everything I bought from them, they deliver to my door for free in days and sometimes hours, and they take feedback, no questions asked.
Physical retailing is 20th century and online selling is 21st century. Technology-driven, of course, but also with the growing awareness of the climate crisis. Shopping on Amazon and other online stores, with their well-organized and AI-infused delivery systems, emits far less GHG emissions into the air than the car-centric Americans’ poorly planned way of doing. do their shopping. Easier, cheaper and less emissions.
This column is by no means a critique of physical retail. If you are in the physical retail industry, or are planning to get started, there are a lot more risks than ever before. Car traffic and foot traffic are still important, but so is your website traffic. If you can’t offer free or low cost shipping, you might be swimming upstream. Whether you are a small store or a boutique, customer service, knowing your customers, and relationships are more essential than ever.
Sarasota resident David Houle is a globally recognized futurist. He has spoken on six continents, written seven books, and is a Futurist in residence at Ringling College of Art and Design. Its website is davidhoule.com. Email him at [email protected]