As customers go online, so is the holiday shopping season

Messi holidays will look different this year. The Thanksgiving Day Parade will proceed without spectators, and Santa Claus will not review Christmas wish lists from its usual perch on 34th Street.

But with many of those traditions likely to return after passing through the threat of coronavirus, Messi’s other changes this holiday shopping season – which traditionally began with Thanksgiving – are signs that the company’s business, and the whole How the retail industry can change. From the epidemic forever.

At the beginning of last month, two Messi’s stores in Delaware and Colorado, went “dark”, meaning that employees are primarily using the spaces as a fulfillment center where they can help customers browse and shop. Process online orders and returns instead of a place to do.

Messi CEO Jeff Gennett said the dark stores are part of an experiment as the company demands customers to buy more online and for ever faster shipping. But the conversion of a department store into a fulfillment center, even temporarily, shows how retail merchants are moving to the dominance of e-commerce and scratching to salvage an increasingly irrelevant physical shopping space. are doing.

Long before the epidemic, the forces of online shopping were set in motion. But the decline of many brick-and-mortar stores and the simultaneous growth of e-commerce over the past seven months is like rapidly advancing the growth of the industry and its impact on the broader economy. In the future, 2020 will be seen as a major inflection point for retail.

“Kovid has put forward five-year results over an 18-month period,” said Vince Tybon, a senior analyst covering retail for Green Street.

Last week, the country’s largest retailer, Walmart, reported that e-commerce sales grew 79 percent in the third quarter, while its rival Target said its e-commerce business grew 155 percent. Amazon sales grew by 37 percent and its profit grew nearly 200 percent in the most recent quarter.

Retail officials said the staggering growth was not a sign of an epidemic lockdown, but a result of a permanent change in people’s store.

“We think these new customer behaviors will largely remain,” Walmart’s chief executive, Doug McMillan, said in a statement last week, as the company released its most recent sales and profit numbers.

In addition to the industry, online sales are expected to grow at their fastest rate in 12 years, with 20 percent of all retail purchases this year. According to Forrester Research, it is over 16 percent in 2019.

While a part of those sales Store pickup, Are not numerous and the impact on brick-and-mortar is indisputable. Earlier this month, according to the real estate industry data provider, Costar Group, the number of stores to close in 2020 reached a high of 10,991. Several Malls are raging As tenants reduce the number of stores, they fail to pay rent or exit through bankruptcy. Jesse Penney, J., who retails for bankruptcy this year. Crew, Brooks Brothers and Neiman Marcus.

“Retail has changed; It is now, ”said Daniel Horrigan, mayor of Ocron, Ohio, where Amazon opened a fulfillment center this month, creating 1,500 jobs. “You can’t stand in front of that wave.”

New Amazon center replaces once-loved shopping mall Of a bygone era Which featured a Sears, RadioShack and York Steakhouse.

But the 54-acre site remained vacant for a decade, a vivid recollection of the extensive conflicts in the city of Rust Belt: the corpse of a murder victim was discovered on the site of the mall and another man trying to steal copper from the empty building Lightning caused the current. “It looked like a giant haunted house,” Mr. Horrigan said.

A few years ago, Mr. Horrigan attended the South By Southwest event in Austin, Texas and pitched Amazon to the idea of ​​redeveloping the mall’s property.

City and state officials agreed to upgrade the roadways and interchange Amazon trucks to make it easier to access the building, which is near a major highway. Amazon also offered tax incentives in the deal.

“Horror worked with kids and lots of life with popcorn and concerts,” said Mr. Horrigan, who has spent most of his life in Akron. “Every Christmas it will be full of people. But we have to be realistic.”

That realism is settling in other cities as well. Even before the epidemic, some of New York’s most famous retail corridors were emptying. Long sections of storefronts at Madison Avenue and Soho have clashed with vacant storefronts, taking some shine from those luxury neighborhoods. Macy’s, which has reported a sales decline of more than 20 percent in the last three quarters, has been hit with temporary loss of tourists and office workers, particularly at its flagship flagship store and Bloomingdale’s.

Workers say the store has had more employees than customers in a few days since the retailer reopened in June. In Bloomingdale’s, some activists are filling time by packing online orders to ship from the store.

“More than 30 years of Christmas season started working in Bloomingdale’s,” said Brenda Moses, who has people in the store, but doesn’t have numbers.

According to real estate services company CBRE, the number of retail leases, other than Manhattan, declined by 31 percent in the third quarter from a year earlier, and by 13 percent in rents at major shopping corridors. This was the 12th consecutive quarter of declining fares. Neiman Marcus, a long-standing development west of Manhattan, at Hudson Yard Said this A little over a year after opening, it will move out of its 188,000-square-foot location.

A professor at Pennsylvania’s Wharton School has studied retail, saying “some retailers will return when prices fall”. “But their stores are not going to come back in the same format. They will have to be more integrated with their online business. “

Inevitably, however, retailers will require less physical space. And it’s unclear what kind of business will fill the growing void, raising the possibility that Manhattan storefronts may remain vacant for the foreseeable future.

“For the economy and for the retail industry, this transition is exciting and good,” Mr. Gallino said. “But it is also true, it is not going to come without pain.”

The rapid transformation of the retail industry is equally vivid in the Borough outside Manhattan. Arising from long-derelict factory sites, more than a dozen e-commerce warehouses are being built to meet New York’s unquenchable need for same-day delivery. Warehouse leases increased by 70 percent in the third quarter compared to the previous quarter.

In Red Hook, on the Brooklyn waterfront, work crews are building what will become one of the East Coast’s tallest warehouses: a three-story building with parking space trucks and “sprinter vans” to deliver goods in less than New York days.

In June, Amazon signed a lease on the 285,000-square-foot “delivery station” in the Mespeth section of Queens. Amazon has also vastly expanded the space it leases into a string of giant warehouses on Staten Island. In addition to the 855,000-square-foot fulfillment center opened by the company in 2018, Amazon expanded this fall to 1.4 million additional square feet of space on the Staten Island site. In the Bronx, the company is acquiring a building recently vacated by its rival, Walmart.

“I’ve been doing this for 30 years and it’s the best year ever,” said Robert Kosar, head of industrial real estate for the Northeast at real estate services company JLL. “We certainly don’t see any signs of slowing it down.”

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