
Amazon Is Gobbling Up Failed Malls [video] - NN88
https://www.wsj.com/video/why-amazon-is-gobbling-up-failed-malls/FC3559FE-945E-447C-8837-151C31D69127.html
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michaelbuckbee
The WSJ video doesn't get into it, but the fall of US Malls has more to do
with changing tax code [1] than with Amazon (though that's still a part). They
were on the way out before Amazon + eCommerce got big.

FWIW - I'm actually from that region of Ohio and think this is a positive
step. There's a lot of other factors that go into this of course (shifting
demographics, overall population drain), but on the whole, this seems
positive.

1 [https://www.smithsonianmag.com/arts-culture/death-and-
rebirt...](https://www.smithsonianmag.com/arts-culture/death-and-rebirth-
american-mall-180953444/)

~~~
xadhominemx
I've spoken to a number of retail execs and mail owners about this (the
latter, like all real estate investors, are tax experts), and they definitely
think it's mostly about e-commerce

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bobthepanda
Malls are failing largely because anchor tenants are dying.

Sears, JCPenny, and Macy's all had horrible management over the past decade.
And the department stores have faced huge competition for decades, whether
it's Walmart offering cheaper goods or stores like H&M or Sephora that
specialize in a specific category. My experience of department stores have
been of unorganized, more expensive stores with a confusing, mediocre
selection; why would I want to shop there?

On top of all that, America is over-retailed compared to other developed
countries:
[https://amp.businessinsider.com/images/5bb37815ac0a631473519...](https://amp.businessinsider.com/images/5bb37815ac0a6314735194e8-960-758.jpg)

~~~
xadhominemx
Yes as one RE exec likes to say, American retail is under-demolished

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romwell
Good. As far as I'm concerned, all malls should (and will) die.

They are a scourge. Some hold nostalgic feeling for them because they were the
only thing close to a social hub at the time (whereas malls are one of the
reasons social hubs aren't there in the first place).

Go malls, go. I ain't shedding tears for thee.

After all, I'm in good company. The guy who invented the malls hates them
too[1].

[1][https://qz.com/454214/the-father-of-the-american-shopping-
ma...](https://qz.com/454214/the-father-of-the-american-shopping-mall-hated-
cars-and-suburban-sprawl/)

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rmason
Sadly this came too late for Detroit's Northland, the first shopping mall in
the country. Because it was built first they guessed at how a mall should
look. They thought it would be important to resupply stores without getting in
the way. So they built this huge basement that allowed dozens of semis to pull
up to loading docks below the stores.

The basement was huge and had Amazon not wanted to use it to unload trucks
they could have had a second warehouse as large as the one above. I remember
thinking at the time this would make an incredible supply depot but Amazon
didn't immediately come to mind.

The mall was torn down and in a twist of fate the land was offered to Amazon
as a possible property for their HQ2 headquarters. My guess is it will end up
as an apartment complex.

[https://en.wikipedia.org/wiki/Northland_Center](https://en.wikipedia.org/wiki/Northland_Center)

~~~
ergothus
> the first shopping mall in the country

Northgate Mall in Seattle would dispute that:
[https://en.wikipedia.org/wiki/Northgate_Mall_(Seattle)](https://en.wikipedia.org/wiki/Northgate_Mall_\(Seattle\))
. Northgate itself is older than Northland, but the claim "Northgate was the
first regional shopping center in the United States to be described as a mall"
is "[citation needed]"

~~~
btgeekboy
It’s also not going to be around much longer in its current form.

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olivermarks
Great business logic for centralizing and automating retail distribution
centers around existing infrastructure and transportation. The issue is only a
small number of huge malls will be converted and competing small business shop
fronts are being rendered non viable which is creating significant economic
repercussions

~~~
burnte
> The issue is only a small number of huge malls will be converted and
> competing small business shop fronts are being rendered non viable which is
> creating significant economic repercussions

How is turning malls into warehouses affecting small stores?

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olivermarks
centralizing delivery. It's no longer cost effective to go to a store, look
for a product, pay for it and return home when it is cheaper to have it
delivered at a specific time and day in both time and money. Small specialized
businesses can't compete with this to charge the margin they need for rent and
overheads. This is putting lot of shops out of business, redundancies etc

~~~
rossenberg79
Why should we care if they go out of business? If they shutdown and bow out
won’t newer, useful businesses pop up in their place? I see no reason to treat
a small shop like an endangered species that must be preserved. Preserved for
what? Most people won’t go there anymore.

Example: There was a fairly large Mom and a Pop retail store here that
shutdown once Walmart moved in. What opened in its place? A massive rock
climbing facility with 40 foot walls. It has enriched the community and given
people something to do other than just roaming aisles looking for crap to buy
and not talk to each other.

~~~
bognition
The general sentiment is that small businesses are owned and operated by our
neighbors. Part of a healthy society is having a group of people with diverse
backgrounds, interests, and jobs all living together.

Amazon's march towards a global monopoly is partially responsible for
homogenizing our society.

~~~
olivermarks
The essential economic problem is that currently running small retail
businesses isn't viable unless you sell through Amazon's distribution (also
less centralized ebay). This means far fewer retail jobs, empty storefronts
and malls, taxes levied on businesses, gasoline/petrol etc The centralizing of
everything through Amazon is classic monopoly practice. I have a ladder being
delivered by them today I ordered on Friday evening. No one can compete on
price or efficiencies both on their side and from my perspective. I don't want
to drive my truck to buy a ladder. Nothing is stopping this trend form rapidly
increasing across the western world

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ethagknight
TLDW: Old mall sites are very large, close to population centers, are
typically located on interstates, and have existing large utility connections
and so can be fast-tracked to converted distribution center.

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chriselles
I remember popping into three Vallco Mall in Cupertino a few times between
2016-2018.

Low occupancy and eventual death.

It was like watching an elephant die in National Geographic documentary, in
slow motion.

The “wrap” fake imagery on walls covering empty stores to make them look
generically occupied were surreal.

Like something out of a North Korean Potemkin Village.

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mimixco
Fascinating. Amazon is not only eating retail, it's eating logistics like UPS,
cargo airlines, and trucking.

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Wheaties466
This sounds like a Wendover productions video. Does he work for WSJ now?

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Maximus9000
That all seems very happy-go-lucky. However, how many malls has amazon put out
of business? How many malls has amazon bought for distribution centers? My
guess is that ratio is not good.

~~~
rapsey
So what? They have become redundant so they are going extinct. Whats the
problem with progress?

~~~
chroem-
I wonder what the post-Bezos future will look like after we have a single
source remaining for all our daily necessities, and Amazon enters a later
stage of its corporate lifecycle and begins to go the way of IBM or GE. If we
replace all other stores with just Amazon, that seems like an enormous risk to
human life if Amazon starts to become mismanaged in the future.

~~~
adventured
We're not replacing all other stores with Amazon. The Amazon-takes-over-retail
fantasy is not going to happen. Their online retail business is now a very
slow growth business. For them to actually take over retail, they'd need to be
seeing high rates of growth year after year for decades yet. At their rate of
deceleration, they'll be at a mid single digits rate of growth within a couple
of years. Their whole business - AWS, devices, online retail, physical retail
- is going to struggle to stay above 10% sales growth in that same timeline as
a matter of fact. The far bigger, more likely risk is that their traditional
online retail business sees a near contraction stall four to five years out.

Walmart is still doing $500 billion in sales by comparison. Unless Amazon
finds a magic way to turbocharge their online growth (1 day shipping isn't
going to cut it), it'll still take 20 to 30 years to just match the size of
Walmart in retail, and that's if everything goes well for Amazon.

What Amazon figured out, is that they can't kill Walmart via online retail
(which is the sole segment that Amazon has any retail dominance). So they're
increasingly exploring physical retail as their only way to grow. Wholefoods
was Amazon being forced to buy their growth, it was a classic sign of a
business that has lost much of its organic growth. Their days of serious
retail growth online are dead.

~~~
olivermarks
Matured rather than 'dead' \- that cycle is now mostly complete

~~~
adventured
Dead was the right term. It refers to the high rate of former growth in their
online retail business. That high rate of growth is dead.

The business is mature. I didn't say the business was dead.

