Tagged: in-store shopping

Mall Foreclosures Up 11% – Due in Part to E-Commerce

Mall foreclosures continue to rise as retailers face more and more competition from E-commerce and a large rush away from enclosed malls.  Many owners are letting their loans default instead of trying to restructure as they see no easy future in a shifting economy.

These declining/failing properties not only cause problems for tenants, but also for the surrounding properties.  “If a mall closes or goes into decline, you’re going to see declining property values in the area,” commented Arthur C. Nelson, professor of Urban Planning and Real Estate Development at the University of Arizona. “The mall is a marker.”

One of the early casualties in the shift to E-commerce.

Warehouses Will Be Everywhere

As we continue to trend towards e-commerce and a range of delivery methods for products, warehouses – one of the key infrastructure elements of delivery – are going to both shift and proliferate.  A report from Colliers looks at these shifts broadly, but pertinent to this blog, there are sections on First Mile and Last Mile of delivery that outline the changes we will be seeing in the built environment.  Some takeaways:

  • Large consolidation of distribution facilities is happening as this facilitates logistics and the implementation of automation
  • Due to this consolidation, the size of facilities is greatly increasing – ‘First Mile’ facilities (these are distributions centers that are first accepting parcels from suppliers)  greater than 1 million square feet are becoming more commonplace. — Picture a single facility as large as 4-5 New York City blocks or 16-20 Portland blocks.
  • ‘Last Mile’ facilities (distribution centers that ship directly to customers) – on the other hand are locating in order to shorten and speed up final deliveries.  This is leading to smaller distribution centers (50-75,000 square feet) scattered around urban areas.

A great graphic that shows the complexity of new shopping and delivery methods is below.  Many forms of delivery and each has its own land use and transportation implications.

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E-Commerce?? – Depends on What you Are Shopping For

A new study in Transportation Research Record by Zhen et al. looks at the relationship between online versus in-store shopping based on the types of good you are shopping for.  Based on a survey of shoppers in Nanjing, China, they differentiate between experiential goods (ones with “traits that cannot be determined until the product is used” – such as clothing) and search goods (ones  “that consumers can ascertain fully before use” – such as electronics).  Unsurprisingly, they found more online purchasing happening with search goods than exchange goods.  A few other takeaways:

  • Cost consciousness is related to lower in-store clothing and electronics purchases
  • Shopping enjoyment increases in-store purchases for daily goods, but not for electronics – so “a particular shopping attitude does not always affect purchasing behavior for different products in the same way.”
  • More education is related to less in-store shopping and more online shopping for books and clothing

In terms of the effect on the overall transportation system, the results are not clear cut.  They state that “If returns of unsatisfactory products and freight transportation are considered, online purchasing generates even more travel demand. Therefore, transportation planners should expect growing challenges associated with the proliferation of Internet sales.”