There have been several stories in the press this week about how malls are doomed to disappear. It's a sign of the continual spread of the waves caused by Amazon.com It began with the retail book industry. Amazon offered to sell books online. You went to www.amazon.com and chose your book and Amazon rushed it to you via a delivery service, like UPS. That was a challenge to bookstores who had to complete with Amazon's approach, which it made it a lot easier for customers to buy books.
Next Amazon became a challenge for publishers. It undercut the premium prices publishers were getting, and then Amazon proceeded to begin offering digital books, and its Kendle reader, to make it possible for readers to simply download books. I recently flew to Europe. I downloaded several books to my Kendle before I left. But, after reading one I especially enjoyed, I simply went online with my Kendle and downloaded several more in the series, so I could continue to read that series throughout my entire trip.
At this point many authors are ignoring publishers and writing directly for digital publication. Book stores have been going out of business for a couple of years now, and publishers are totally confused and consolidating, hoping that somehow running their old model a bit more efficiently will save them.
I'll leave aside Amazon's threat to use drones to deliver packages to its customers — that's still in the future.
What isn't in the future is Amazon's expansion into the generic retail market. You can now buy anything from flashlight batteries and hats to lawnmowers and wines via Amazon. Or you can have groceries delivered to your door. Amazon has become the general emporium of our age. And that's a challenge to all the retail stores across the land. In the US, many of those retail stores are clustered in shopping malls, and the challenge Amazon represents seems likely to doom many of the stores in many of the malls. The current estimate is that from 20-25% of the US malls will close in the next 5 years. Even malls that manage to survive are going to be in trouble, because specific stores within the malls will close, reducing their overall profits and their draw.
The implications of the Amazon experiment, like the waves from a stone thrown into a pond, continue to expand in all directions. In itself that would be interesting, but its hardly the only stone about to be thrown in the business pond. In the next few years drones will be used for all kinds of deliveries. More important, self-driving cars will make their appearance and will begin to be used in all manner of ways. Similarly, self-drving trucks and sell-driving ships will become umbiquous. And with that change, everything else will change too, from insurance policies and drivers licences to auto repair and law enforcement.
At the same time cars and trucks are going to transition from gasoline powered vehicles to electric, and perhaps, hydrogen powered vehicles. That transition will obsolete a wide variety of things designed to deal with gasoline motors and call for the installation of an even wider network of devices to support electric or hydrogen powered vehicles.
3D printers will become widespread as well and change commerce in many different ways. I recently broke a stem of my glasses and have spent many hours on several days trying to replace the step without having to buy and entirely new set of glasses. “But,” I am told, “your glasses are over three years old. Fashion has changed and they are no longer available.” I would be happy to go to a 3D shop and give them the old stem so they could scan it and produce a new one. In a few years that will be commonplace. And that, in turn, will lead to an changes in supply chains, in warehousing, and it how products are maintained.
Change is going to continue to happen. Disruptive changes is going to play a large role in the lives of those who live during the next several decades. Companies are going to transform, and then transform again. And many won't survive. We live in exciting times. And they are going to become more exciting still.
Now, what will we do with all those empty malls?
