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More People Are Shopping Online; Find Out Why, Here

More People Are Doing Online Shopping, Holiday Shopping Followed Suit

As the demand for more warehouse space is increasing, once empty stores have turned into fulfillment centers. The pandemic is ushering the retail industry into its promising e-commerce future. As the threat of the pandemic is still looming over people’s heads, there are a lot of traditions that will not look the same as it had before. Everything will probably return to normal once the pandemic ends, but there are changes in Macy’s end that may likely alter the future of the retail industry.

Just last month, Macy’s stores in Delaware and Colorado went dark, which meant their employees were using the spaces as fulfillment centers. It is where they can process online orders and returns instead of as a place where customers can browse and shop.

What Happened Next?

As a response to customers going online for their purchases and faster than ever shipping is highly in demand, Jeff Gennette Macy’s chief executive mentioned dark stores are part of an experiment to address that trend.

Although converting a department store into a fulfillment center seems to usher in an e-commerce future and struggling to salvage irrelevant physical shopping space.

Online shopping seemed to have set its mark long before the pandemic, but with the decline of a lot of brick-and-mortar stores, the growth of e-commerce in the past few months is like watching the growth of the industry, and its impact on the economy.

Just last month, Walmart reported that e-commerce sales went up 79% in the third quarter, while Target reported theirs at 155%. Sales for Amazon increased to 37 percent and their profits are up 200%.

This growth is not just because of the pandemic, but it is where e-commerce is going because of the way people are now doing their shopping.

According to Forrester Research, online sales are up 16 percent compared to 2019 stats.

Store pickups may account for a portion of those sales, there are still a lot of them that are being sent to delivery addresses. The impact on brick-and-mortar stores cannot be ignored, as for 2020, more stores are closing, and according to the CoStar Group, a data provider for real estate, mentions the numbers are at 10,991 now.

A lot of retailers have filed for bankruptcy this year as a lot of malls are faltering as tenants can lessen the number of stores, can’t pay the rent or will need to exit through bankruptcy.

In Akron, Ohio an Amazon center has opened up, replacing a once-famous shopping mall long ago that housed a Sears, RadioShack, and York steakhouse. But for a decade, the site was like a haunted house, a reminder of how Rust Belt city was struggling.

Daniel Horrigan, mayor of Akron mentioned how retails has changed, and that everyone should ride the wave instead of standing firm against it.

Mr. Horrigan pitched the idea of redeveloping the site to Amazon and agreed to upgrade the road and interchanges also to make it easier for Amazon trucks to go in and out.

Malls were bustling with activity before the pandemic happened, full of parents taking out their kids for a movie, or concerts on holidays. But people have to be realistic, given the present circumstances.

The realism is almost settling over other cities, too. 

Some of New York’s popular retail corridors were slowly emptying. Storefronts along Madison Avenue in Soho have struggled with vacant storefronts, removing some shine off these high-end neighborhoods.

Macy’s has been hard at its famous flagship store and has reported declines in sales of over 20 percent in the past three quarters.

What People Can Expect Moving Forward

We see some retails to return once prices come down, but they cannot come back in the same format. According to Santiago Galino, a professor at the University of Pennsylvania’s Wharton School, stores would need to integrate with online shopping.

Retailers would also need a smaller physical space, but it’s unclear what type of business can fill the looming void, which may mean that Manhattan storefronts may stay vacant for the foreseeable future.

The rapid changes are equally transparent in boroughs outside Manhattan. Factories that were long vacant are now sites to a dozen e-commerce warehouses that are being built to address New York’s need for same-day deliveries.

Robert Kossar, head of industrial real estate for the Northeast at JLL, a real estate services business, says that 2020 is the best one we’ve ever had, and there are no signs of slowing down.

Editor’s Note on More People Shopping Online

If you have a story worth telling about Shopping Online, or Online Shopping in general, we’d love to hear from you.

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