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Disruption in Retail Real Estate

Maybe a better title for this post is what happens to retail real estate in the future?

There are two ways that retail is being disrupted as we speak:

  1. New entrants are bypassing retail channels via a having better online experience and by taking advantage of companies who provide delivery as a service (thats tech talk for Fedex & UPS) that are available.  The image below highlights web companies that are taking a jab at their retail competitors.  The point is not to focus on the general disruption (although it shows how it is happening everywhere), but what happens to all of the space that these stores currently occupy?Screen Shot 2015-12-30 at 9.43.43 PM
  2. Existing retail re-inventing itself.  Think about how you can deposit a check into the bank via a mobile app, or get cash through an ATM.  Do Banks need to be on every corner in the country? Starbucks has their order and go experience – which I was blown away by – you order your drink on the app, walk in and its ready to go.  The experience is similar to Uber – it just works – the app has your credit card, it linked to the hardware in the store, it knows your geo-location, etc.  Maybe smaller stores are in the future for Starbucks?

 
 

So all of this makes me wonder – what type of retail stores need to exist in the future?  What happens to all of the empty space?

Image source: https://www.advantiscu.org/mortgages/commercial-real-estate-loans/benefits-for-borrowers.html

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