In our predictions for 2018, we discussed the possibility of a "retailpocalypse" due to "Amazonification."
The Wall St. Journal interviewed a shopping mall owner in Bellevue, WA, and wrote about it in a In a column published after our predictions hit entitled, "How Retailers Can Thrive in the Age of Amazon The secret, says Bellevue Square’s owner, is to provide customers with ‘emotional fulfillment.’" So even in an article that looks at how retail can survive, please note:
- The presence of Amazon in the headline.
- The mall owner, Kemper Freeman, acknowledges that there are two problems facing most retailers, and one is that America has 50% more retail space per person than Canada and that Canada has about 50% more retail space per person than Germany -- and that Germany has it about right.
Which means even a mall developer who is doing well, and has found ways to drive people to his locations -- the article makes it clear that Freeman is actively engaged in boosting traffic -- feels the U.S. retail sector is facing problems, observing, "If he's right, a severe real-estate contraction is coming, and weak stores and malls will get eaten alive."
And that's from a booster of the industry.
Freeman also makes the point that online sales represents a low-double-digit percentage of overall retail sales, and that some of his malls' hottest retailers are those, like Amazon and Tesla, have an online and bricks-and-mortar presence at his mall.
In other words, for many, shopping is still entertainment, getting out of the house, socializing, and about a level of experience that point-and-click does not equal. According to Freeman, that's why bricks-and-mortar retail will survive but they have to know how. His bet? Macy's will not survive because it is run by accountants not by entrepreneurs, who truly value customers, not just costs (as accountants do).
We don't want retail to fail. We're just interested in how the media covers the sector, when we think it is vital to the U.S. economy.
We'll find out in mid-January how retail did this Christmas season when the National Retail Federation (NRF) releases the numbers at its annual conference.
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