Department stores and malls around the US seem like old relics in a time where online shopping is dominating the retail space.
In just the last decade alone, multiple stores have filed for bankruptcy and shut their doors as they struggle to compete with changing shopping behavior and Amazon. Even traditional stores like Sears and JCPenney that had existed for decades and decades are now gone or completely scaled down.
But it seems like these brick-and-mortar stores could have some use after all. According to recent reporting, Amazon is in talks with the Simon Property Group, one of the biggest mall owners in the US, to transform the retail spaces left behind by department stores into large fulfillment centers.
It’s understood that Amazon is hoping to take over anchor department store space in major US malls, spaces that were previously occupied by traditional US retail giants like JCPenney and Sears. Both of these retail companies have filed for bankruptcy and have shut down a massive number of their retail locations across the country.
This means that there’s a lot of retail space to go around, and it seems Amazon is ready to take advantage. If the deal goes through, there’s no doubt that it will boost Amazon’s ever-expanding presence in the US. Shopping online is now the future and the question is how fast can e-commerce companies like Amazon deliver parcels.
Amazon’s biggest challenge in recent years has been finding strategic fulfillment centers across the US that make it easier for its delivery teams to reach consumers. Converting the massive network of retail space previously owned by JCPenney and Sears could give the e-commerce giant the edge it needs to speed up delivery and completely dominate the retail space.
Amazon has, however, not confirmed its current acquisition plans. In fact, the company has called these reports “rumors and speculation.” Traditionally, most malls want tenants that bring in customers, but Amazon fulfillment centers are the exact opposite. Other than the employees working there, there will be no one else coming into the mall.
But during the current COVID-19 pandemic, traditional brick-and-mortar retail locations have suffered massive hits as dwindling shoppers lead to massive revenue cuts. Conversely, the online bit of retail is picking up at a rapid pace. Amazon is now shipping more products than ever before, partly because a lot of people are stuck at home, and going to stores for shopping isn’t safe anymore.
We aren’t sure how long this pandemic will last. But based on current trends, it could be another few months before people are finally able to shop in traditional brick-and-mortar stores.
For this reason, Amazon sees an opportunity to capitalize on current shopping trends, and having fulfillment centers strategically located across the US will provide a massive advantage for the e-commerce giant. But so far there’s no deal on the table!