The entire world has shifted from brick-and-mortar shopping trips to buying from online retail sites in response to COVID-19. Purchases that used to require a quick trip to your local big-box retailer for things like toilet scrubbers or Ziploc bags are now done via e-commerce sites with the click of a couple of buttons. Looking for online shopping deals? Check out what’s on sale for August that you should buy now.
It’s had a pretty noticeable effect on traditional retailers, who are struggling to keep up with the prices and selection that can be found online. In-person retailers are also struggling with how to keep employees and patrons safe during a viral pandemic, which has added another layer of complications.
But while empty storefronts can be found in malls across America, there is an online retailer that wants to reclaim those brick-and-mortar mall spots. Amazon, the world’s largest retail site, is currently looking to take over those empty locations — but perhaps not for the reasons you’d think.
Why is Amazon targeting mall locations?
According to “the Wall Street Journal,” Amazon is in talks with Simon Property Group, the nation’s largest mall operator, over potentially converting empty department store spaces leftover from the closures of stores like Sears and JC Penney. The anchor spaces wouldn’t be retail Amazon spots, though, they’d be turned into distribution centers instead.
Amazon distribution centers serve as warehouses for items that fill orders, and historically, they have been limited to massive buildings in a handful of areas. Adding these distribution centers to malls across the nation would turn retail spaces from storefront to regional distribution hubs for order fulfillment — and expedite shipping times for areas that are less centrally located.
These reported talks between Amazon and Simon come at a time when a number of large retailers, who had been struggling to stay prior to the pandemic, have been feeling the pain from decreased foot traffic due to COVID-19. Department stores like JC Penney and Sears — which dotted the mall landscape for decades — can no longer afford the cost of running retail businesses with limited in-person shopping, and tons of closures have occurred.
Simon Properties has holdings for 63 JC Penney and 11 Sears locations. Depending on what happens with talks between the companies — and what happens with the future of Sears — this could mean there’s space for about 75 mall warehouse locations across the nation.
In the past, malls have attempted to fill the void left behind by shuttered department stores by allowing gyms or other large footprint businesses to open in empty anchor spaces. COVID has caused challenges with that, though — most gyms or kid-oriented arcades and restaurants are financially strapped due to the pandemic, and in many states, these businesses aren’t open or are only open in limited capacities.
If this happens, it wouldn’t be the first time Amazon has used empty mall space as a distribution center. The online retailer’s Akron, Ohio distribution center — which was acquired in 2019 — is housed in a former mall property.
How would these Amazon distribution centers affect me?
Well, the deal isn’t solidified yet, but if you’re an Amazon Prime customer in a less centralized location, this move could mean delivery times for your orders will change from two- or three-day Prime delivery to same- or one-day delivery instead.
Malls are generally located near highways and residential areas, which means the central mall location of an Amazon distribution center could make it easier to deliver packages in a streamlined time frame. Fast shipping times have been tough to achieve for rural Prime customers, who face longer wait times than customers in major metro areas.
With this change, though, your order could, in theory, go from confirmed to delivered in a matter of a few hours — provided you live close by to a mall distribution center. Amazon has been working toward a one-day delivery strategy for quite a while, but whether the mall warehouses make this a reality won’t be clear until a deal happens.
Shipping perks aren’t the only upside to this potential collaboration between e-retailer and mall, though. It could also mean more product options are available to consumers, as Amazon would have the advantage of housing a wide array of items across tons of distribution centers rather than a handful of large ones.
Distribution centers already house a wide array of products, from shelf-stable pantry items to sweaters and bikes. An expansion could push Amazon’s product offerings into new territory.
Plus, if new distribution centers are opened, it would mean more jobs. Given that the job market is extremely tough right now, this could mean positive economic gains and more jobs available in the areas where the distribution centers are placed.
Unlike minimum wage positions available in most retail stores, Amazon offers a $15-an-hour minimum wage, along with full benefits and a 401(k) with a 50% match. Associates are also offered education perks and other benefits.
Would this move change the face of malls for good? Maybe — but malls have faced an evolution from high school hangouts to barren strips of shops in recent years anyway. At least the trade-off with this would be faster delivery, full retail spaces and more jobs.
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