A few years ago, I walked into a local Borders bookstore as it had just been announced that the former retail behemoth was closing their doors for good. Consequently, I couldn’t help but think the retail (bricks and mortar) shopping experience was coming to an end. Not an immediate end, of course, but in my opinion the downward slide had actually begun. Store employees were numb as they wondered what would come next for themselves and their place of employment of many years. In Border’s case, actual shelf space was being replaced by a web browser and the “cloud.” No longer did you need to waste time looking for a book on Borders’ shelves, buy a cup of coffee from the shop, traipse into an adjacent store just to look around, or even enjoy an afternoon or an evening by meeting friends at Borders before continuing on for drinks or dinner. Rather, the book could be found on the internet, ordered and delivered without leaving the cozy confines of your own home. Of course all the other ancillary businesses that surrounded Borders could also call it a day, as I estimated that so-called foot traffic would decrease to a minimum. I truly thought the inevitable had begun with the implementation of technology and its unintended consequence of rendering shopping malls and all other retail shopping centers a thing of the past. Yet, little did I know that the real estate developers — the last ones to understand a trend — continued to exacerbate the situation by adding 30 million square feet of U.S. retail space per year from 2000 to 2008.
Indeed, a sharp decline in personal income, real unemployment on the rise, maxed out credit cards galore, and a dramatic increase of a competitor better known as “online” could only lead me to one conclusion. Specifically, five to ten years hence, concrete shopping malls will seem like something out of a far-fetched “sci-fi” movie as store after store displays a “vacant” sign with little hope of occupancy.
I deduced all of this by merely strolling into a Borders bookstore on one fateful sunny afternoon. Just imagine if I had walked into a Kmart or Sears instead of Borders, my nightmare may have been more Halloween and Freddy Krueger than “sci-fi” and Arnold Schwarzenegger.
Regardless, with e-commerce leading the way, it doesn’t bode well for bricks and mortar retailers of any description.
New Time 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for Thursday April 24th, 2014 | John Ransom