Amazon wants to turn failed malls into fulfillment centers

Shawn Knight

Posts: 12,503   +122
Staff member
Editor's take: Now would be the best time to make a move as in-person retail is down due to Covid-19 since more people are shopping on line. If Amazon can score some prime warehouse space in a great location, it'd be a huge win for Bezos and company.

The largest mall owner in the US is discussing the possibility of leasing out some of its anchor department stores to Amazon for use as fulfillment centers.

It seems like a wise move, if not also an ironic one. Amazon was largely responsible for decimating traditional brick and mortar retail through its aggressive e-commerce business over the past two decades… and now, with established brands like Sears and J.C. Penney hanging on by a thread, it’d be… well, something… if Amazon were to take over those failed mall anchor stores and repurpose them as fulfillment centers.

For Amazon, having more fulfillment centers closer to residential areas would allow the e-commerce giant to further speed up the crucial last mile of delivery.

And for Simon Property Group, the owner of the space, they’d at least have a tenant that they know would pay rent and keep security up to snuff. Plus, Amazon already has relationships with some mall owners as they've been renting out parking lots to the e-commerce giant to store their huge fleet of vans.

Discussions between the two parties have reportedly been going on since before the Covid-19 outbreak. In some cases, the two have even talked about buying out occupied spaces from retailers to get the space. According to its most recent filing, Simon Property Group malls have 63 Penney stores and 11 Sears stores.

No deal has been made and it’s worth nothing that talks could fall through before any agreement gets hammered out. Still, it’s a compelling idea, one that would bring jobs back to old malls that have seen better days.

Image credit: Nic Neufeld, RozenskiP

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brucek

Posts: 489   +562
TechSpot Elite
From the really big picture view, it's kind of using the space for the same purpose: it's still storing a bunch of retail goods, and it is still getting them to the consumers. The difference is that the goods are driven out to the consumer as part of bulk routes, vs. each customer driving themselves for what is usually zero to few purchases. Feels like an efficiency upgrade to me.
 
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psycros

Posts: 3,184   +3,371
From the really big picture view, it's kind of using the space for the same purpose: it's still storing a bunch of retail goods, and it is still getting them to the consumers. The difference is that the goods are driven out to the consumer as part of bulk routes, vs. each customer driving themselves for what is usually zero to few purchases. Feels like an efficiency upgrade to me.
Essentially true, but I sure like being able to go to a store and buy something when I feel like it as opposed to waiting on a delivery. You have to wait because the porch pirates follow the UPS and FedEx trucks around here. Its ridiculous but we make the best of it. Its kind of fun hiding inside videoing thieves as they walk away with a package, making sure to get their license plate. Then you report them, all the while thinking about how it'll be when they eagerly tear open a box rigged with a dozen pull-string fireworks and a bag of dog crap.
 

brucek

Posts: 489   +562
TechSpot Elite
I sure like being able to go to a store and buy something when I feel like it as opposed to waiting on a delivery.
Those malls are near shoppers and have plenty of parking. Those could be the ingredients for a self pickup on demand option. I wonder if Amazon is thinking about that? Although I bet their aspirations run more towards a near instant delivery in the long run anyway.
 

madboyv1

Posts: 1,597   +488
Those malls are near shoppers and have plenty of parking. Those could be the ingredients for a self pickup on demand option. I wonder if Amazon is thinking about that? Although I bet their aspirations run more towards a near instant delivery in the long run anyway.
self pickup would be nice sometimes... well a better option than Amazon Locker anyways.
 

silversea

Posts: 15   +31
Amazon Retail stores would be better, with an Amazon car vending machine outside with a 15 day money back guarantee.
 

Vrmithrax

Posts: 1,543   +578
Those malls are near shoppers and have plenty of parking. Those could be the ingredients for a self pickup on demand option. I wonder if Amazon is thinking about that? Although I bet their aspirations run more towards a near instant delivery in the long run anyway.
Ironically, having a quick pickup location available could not only reduce Amazon's delivery overhead for local runs, but (if done right) also could foster a little bit of a grassroots setup for smaller or unique shops, kind of a re-emergence of the classic mall idea on a different scale. Plenty of smaller or indie suppliers utilize the Amazon infrastructure to sell their items, imagine of some of them opened up small shops in different malls, where you could actually go in and check things out prior to purchase. Potentially saving another chunk of money on the back side, reducing returns when people just buy and figure out whatever they got isn't right after it arrives. Amazon throwing some of those savings into a little subsidy to make mall leases more palatable (they have traditionally been ridiculously high lease rates in the past), could create a little symbiotic relationship that would benefit both the big juggernaut and the little guys trying to make a go of a business.
 

Uncle Al

Posts: 7,364   +5,774
Actually, it makes a lot of sense and with all that extra space they could expand, BUT they would have to rework switches for lighting, HVAC, etc. in order to make it controllable from one or two sources ..... still, all of that would be a LOT cheaper than building a new structure the same size .....
 

richcz3

Posts: 35   +19
The Sears in my area (Torrance CA) closes in September and its a huge building. The mall was already losing foot traffic and tenants before Covid struck. Even after major renovations.

In a way its a win/win. Significant job creation and base tax increase for the city, but there are also other things to consider.

Anchor stores generate foot traffic. Not sure about fulfillment centers unless you're a restaurant that benefits from all the new fulfillment center employees looking for places to eat.
Also, with the size of most Sears/JC Penny's stores that represents a significant increase in traffic on the roads throughout the day and evenings.
 
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Vrmithrax

Posts: 1,543   +578
The Sears in my area (Torrance CA) closes in September and its a huge building. The mall was already losing foot traffic and tenants before Covid struck. Even after major renovations.

In a way its a win/win. Significant job creation and base tax increase for the city, but there are also other things to consider.

Anchor stores generate foot traffic. Not sure about fulfillment centers unless you're a restaurant that benefits from all the new fulfillment center employees looking for places to eat.
Also, with the size of most Sears/JC Penny's stores that represents a significant increase in traffic on the roads throughout the day and evenings.
On the plus side... No worries about adequate parking at a repurposed mall! :)
 
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