What Could POSSIBLY Be Good About the Retail Apocalypse? Just This One Thing...

By now the phrase "retail apocalypse" has entered everyday parlance and everyone knows what it means: Amazon will destroy everything, leaving smoking holes wherever there used to be perfectly nice and harmless retailers.

It'll be just like what Walmart did twenty years ago, except Amazon will do it faster, meaner, and with more clinical detachment.

And when it's all said and done, there'll be a few Chipotles and mani-pedi shops left over--you know: service businesses Amazon hasn't yet learned how to replicate. There will be no other retail survivors.

This unmitigated disaster is the consensus scenario on what Amazon is about to do to the retailing industry. Cheery, huh?

Then again, to borrow a phrase from my old investing career: the consensus is often wrong but never in doubt. And it's generally a terrible idea to allow consensus thinkers to do all our thinking for us. So, could there be another, non-consensus perspective on the secular growth of Amazon and online retailing?

Here's one: it's an unmitigated blessing for the environment. The six bullet points below explain.

1) Stores can revert back to green space and habitat. Most stores simply don't have to be there anymore. Retail space could return to open space, and all those hideous-looking big-box stores, shopping malls and strip malls could go back to being trees, grass and the natural habitat they used to be. Or, perhaps even better, these built-over spaces could be reused for low-cost housing, public parks and playgrounds. Any of these uses would be far more societally beneficial than feeding consumerism.

2) Think about all the pavement. For every 1,000 square feet of retail space, there's another 1,200 additional square feet of paved-over parking space. This is pavement sufficient to park 3-4 cars, roughly. [1] This doesn't even count additional paved-over ground for road access, for truck loading/unloading, for firelane space, for space between parking lanes, etc. Every square foot of decommissioned retail space counts well more than double--possibly more than triple--once you consider accompanying paved areas.

3) Pavement and parking lots are disastrous for the environment. Pavement disrupts the soil's natural role in cleansing, draining and filtering our water. Parking lots and road surfaces also generate pollutant-heavy storm sewer runoff that typically goes directly into local rivers and lakes. Remember decades ago when we used to pollute our environment with industrial waste? Now we do it with pavement runoff. [2]

4) Redundant warehousing and distribution infrastructure eliminated. For every retail store you see, there's a largely invisible network of warehousing and distribution supporting it behind the scenes. This represents still more environmentally disruptive buildings, infrastructure and pavement, most of which are unnecessary. As a recent example of what I mean, consider the failed and now-liquidated retailer Sports Authority. It competed with Dick's Sporting Goods, often placing its stores in the very same malls and neighborhoods. Sports Authority had its own warehouses, storage, distribution hubs, trucks, inventory and systems--an unprofitable, unnecessary and entirely redundant national retailing infrastructure exactly copied by a nearly identical retailer. All totally unnecessary. Imagine all the other carbon-copy retailers in the innumerable subsectors of retail, and then imagine all the additional infrastructure behind the scenes that simply doesn't need to be there.

5) Redundant shipping/trucking/fossil fuel use eliminated. Merchandise doesn't magically travel to store shelves and display cases by itself. It needs to be trucked there. Worse, physical retailers also have to guess what you're going to buy, and in what unit volumes, and then ship it from the docks to warehouses and distribution nodes, and then to the stores themselves. All this inventory (assuming it isn't stolen, broken or damaged en route) is unloaded and set on display in brightly-lit, well-heated and completely wasteful indoor environments designed specifically to tempt you to buy. If the retailer is wrong about what the customers want (they often are), they pack it back up and then ship it all the way back to be dealt with yet again. This is an entire layer of shipping, distribution and display now made largely unnecessary by online/virtual storefronts.

6) Wasteful last mile customer driving reduced significantly. One of the largest single drivers (pun intended) of excess carbon footprint and energy waste occurs when customers drive to and from stores. [3] Most of this last-mile customer driving could and probably should be replaced by UPS, FedEx and the postal system, all of which already have well-scaled distribution systems in place which are far less wasteful and far more efficient than individual cars on individual shopping trips.

Concluding thoughts
Retail is entering a period of much-needed and long-overdue rationalization as we replace an old, outmoded way of selling things with a more efficient and less environmentally harmful way. We are vastly overstored in the USA, and for every unnecessary store, there's still more pavement, warehousing, distribution, trucking and redundant infrastructure behind it all.

Maybe the retail apocalypse isn't so bad after all.

Resources/for further reading:
[1] See this intriguing 1950's era parking/planning report giving standard assumptions for parking space/retail space ratios. Today, ratios probably run meaningfully higher still. Also note this gem of a quote: "We know of no existing [shopping] center that has too much parking."

[2] Scientific American on stormwater pavement runoff and its environmental impact.

[3] Intriguingly, the extraordinary wastefulness of last-mile driving is also one of the most compelling arguments against the local food movement. For more on this, see the readable and counterintuitive book The Locavore's Dilemma by Hiroko Shimizu and Pierre Desrochers.

Readers! You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!


Marcia said...

Every time I read about this, I think "everything old is new again".

Think about a hundred + years ago, when you could only mostly buy "things" via a catalog. Amazon is not much different. Just more modern.

Have you seen Corporate DJ said...

Don’t be sad about the so-called “retail apocalypse”; instead, we should consider this a chance for retailers to get creative in their approaches to customers. Clearly, the old method isn’t working, so now the retailers that are still around have a chance to innovate. They need to find new ways to be relevant and think about how they can make customers’ lives easier in our modern, connected world. This isn’t the end of the world, it is the start of something exciting.