Retail real estate denial – the elephant in the room.

I couldn’t help but sit and shake my head at the backwards thinking of a new article from CoStar entitled Eking Out E-Retail Rents from E-Commerce.  It trots out all of the head-in-the-sand ideas of the future that are currently plaguing the music and movie industries.  A few choice highlights from the article:

[Lakhmi Mathrani] believes the growth in e-commerce is primarily coming at the expense of sales previously made via catalog and direct mail.

I’d like to introduce Mr. Mathrani to the elephant in the room: Amazon.  If he really believes that online shopping is truly a straight replacement of catalog sells I’d love to understand why so many big box retailers have been struggling recently.  Cyber Monday did not become a phenomenon because catalog shoppers have moved online.

There are digital pure-play retailers that never intended to have brick and mortar stores that have recently figured out that they need to have brick and mortar stores in order to really maximize their brand,” [Art] Coppola said.

Mr. Coppola, you as well should be introduced to Amazon.  I know that some smaller ecommerce plays decided to augment with brick and mortar, but let’s at least acknowledge the biggest player around.  Brand is not maximized by a physical presence.  Brand is maximized by consumer recognition.  It’s why so many technology buyers look to NewEgg.com.  It’s a trusted source.

There is a nod to new conventions at least:

David Henry, CEO, president and chief investment officer of Kimco Realty Management, said bigger retailers favor converting portions of their stores to serve as fulfillment centers because they sell $1.30 to $1.40 in merchandise for every $1 that’s returned to the stores.

But really the entire piece is about retail real estate owners trying to convince the world that retail is not changing the way it actually is.  Denial is the quickest way to end up on the bottom of the pile.  Even in real estate innovation is possible.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s