This year has been bad for many real estate investment trusts because it is now becoming more clear than ever that the internet is killing retail businesses at a fast pace. Developers actually creating new retail buildings or even being able to keep occupancy in some areas is nonexistent. Im not talking about all businesses because there are some that will stay alive simply because of the products they sell, but for the most part people who thought they would never buy all their products online at now transitioning over. How much longer can many of these retail businesses hold on?
Much of this has to do with companies like Amazon going to war with every business out their that sells anything that they list on their site. They have even killed manufacturers with their own in house brand as well. Amazon is winning this war at a rapid pace especially with newer generations ditching the shopping mall in favor of the digital one. In fact the amount of shopping malls that have literally turned into ghost towns is astonishing. There are channels on youtube completely dedicated to exploring basically abandoned or fully abandoned malls.
The biggest problem is Amazon isnt like prior businesses that might have coordinated sales, like Ebay. For example Ebay doesnt actually sell anything themselves, but rather just coordinates the seller and the buyer, while Amazon takes the opposite approach. Amazon actually will own much of the product they sell and place it as the number one option, so even if you are a retailer on Amazon, you often are at a great disadvantage. The products that amazon has themselves also continues to grow and eventually they will push most of the third party sellers off the site.
The biggest reason that people prefer online sites like Amazon is because the price is just too good to compare to retail. Amazon often offers 1 day free shipping on many items or 2 day free shipping with prime. They are continuing to further expand their logistics network so same day or 1 day is going to become the standard. Its crazy to believe but Amazon seems to be fully dedicated to offering the same experience without leaving your house. This is the second level of what we saw when places like walmart killed mom and pop businesses for the most part.
Some places might hang on more than others because they offer a niche product or a product that people want to actually hold or try on before they purchase it, but there will come a day when even those places might not be able to fight back. I personally like that I am getting the options of how I want to shop, but I fear that many of these big companies like Amazon are getting too big for comfort. With no competition we will be the ones who suffer, but as it is they are fighting a total war, trying to leave no survivors.
-Calaber24p