A helpful distillation of unfolding reality from a much longer piece in today's Wall Street Journal:
The transformation of US retail malls, "highlights the way e-commerce has fractured retail logistics, with demand to deliver truckloads of goods to outlets giving way to more nimble distribution of lighter loads to smaller storefronts and distribution centers. The challenge for shipping providers is making those sorts of deliveries with the efficiency that comes with bigger loads for big clients."Implicit in efficiency, but worth making explicit: And at a sustainable financial margin.
Decentralization and diversification of retail networks should produce a more resilient system than the hub-and-spoke model that has often been the goal (if not the operating reality) for the last generation. At least this seems likely where there is sufficient demand volume to achieve sustainable revenue on thin margins.
One example: Reston Town Center in wealthy Fairfax County, Virginia. See map and store directory above. (I apologize for the fuzzy quality, it is the best I could find.)This is a major retail destination -- sans any Department Store. Consider the proportion of restaurants and entertainment compared to other retail. Busy, busy, busy. According to the property manager, RTC has "Four million square feet of office space has a remarkable vacancy rate of less than one percent. Plus, its office space rents for $20 more per square foot than office developments only blocks away." The retail mix is key to this success. This mix reflects demand-pull of affluent residents.
Where population or cash (or both) are less abundant, it seems to me we are likely to see increasing supply network centralization and "optimization" (less diversity), in order to justify any investment of capital.
No comments:
Post a Comment