In my commercial real estate class, my professor recently stated that amongst the 4 areas of commercial: Apartments, Industrial, Office, and Retail, that Retail is supposed to have been on an uptick in the growth area of the curve for the next 2-3 years. However, he also described something of a black swan event for Retail – basically that the advent of Amazon, online commerce, and the decline of the traditional foot traffic in brick and mortar stores, the Retail sector would be significantly impacted in its volume and usage.

This makes sense, now that everyone’s buying stuff online, the reason for someone to go into an actual store has changed in a big way. It’s going to be catered to be more of a tangible experience that cannot be experienced online. It’s already coming to be much of this way in many different retail sectors already.

Interesting thing to think about. When you’ve got a physical storefront, you’ve got rent, employees, utilities, and other expenses to factor into your bottom line. When you’re selling stuff online, sure, there’s still yet other expenses like distribution, fulfillment, and so forth, but it’s peanuts compared to paying rent.

And in the middle of the class he turned and looked to me, and said, “people like YOU,” pointing at me, “you’re in online stuff right? YOU’RE the reason that Retail is going to shit. Everyone’s making a killing selling on Amazon, on their websites, while you have huge stores like Best Buy who have high overhead, and worse, you have to drive there to get your stuff.”

I smiled. 🙂