First it was Sobeys closing 50 Canadian stores, now Target with 133, and Sony with 14. Sony is just a mere blip and I wonder why they ever had stores to begin with. Why are all these giant companies closing up shop? Could it be that online shopping has finally reached the tipping point level of adoption to actually make a dent in traditional shopping? I think it has. Some say I should include Sears in this pile but I think they have something up their sleeve. They’ve been getting oddly creative with the ads lately so let’s see what happens with them.
Grocery Gateway was first out of the gate in Canada and has seen a successful run over the past decade and now with Amazon Prime coming to Canada you can pretty much get anything you want delivered to your door within 48 hours and sometimes within a day if you’re close enough to a distribution centre. That’s Steve Bezos’ genius right there. He’s finally realizing his vision of same day delivery in some markets and achieving a level of customer service that most of these ill fated companies simply can’t touch.
These closures will inevitably affect the economy in the short term with over 20,000 employees now looking for work but Starbucks has stepped forward and is doing what they can to help absorb some of the blow by offering the newly unemployed opportunities.
The real question: Is traditional Retail finally dead? I think so. Torontonians are making serious efforts to avoid big box experiences. Communities are fighting big box expansion in urban environments (yay Leslieville!) and opting for more local options.
So what’s the solution for big retail landlords?
I believe that there is still loads of demand for retail space but I think business owners, corps, groups, etc.. need to realize that consumers are shopping online for more things than ever. The days of a store occupying millions of square feet across this country are over (sure the Walmarts, Costco’s of this world are still relevant due to their low prices…that’s it).
These newly vacant spaces should be broken down into smaller chunks and turned into “Local Market” type environments where, even in a space like at the Eaton Centre, a consumer can be presented with thousands of items brought to market by hundreds of local businesses. Sure, there’s even room for the big brands in there but they’ll have a smaller foot print. In fact, this is an opportunity for the big brands and the local business owner to work in the same enviornment together. The big brand can be the “draw” to the Local Market but the little business can be the unique “hook”.
What do you think?