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Brick-And-Mortar Making a Comeback?

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By William Vogeler, Esq. on September 24, 2018 3:59 PM

The prophets called 2017 the year of the Retail Apocalypse, the end of brick-and-mortar stores as we know them.

And it happened, just like they said. More than 6,700 stores closed across the United States, surpassing the worst meltdown for storefronts since the Great Recession a decade earlier.

Many blamed the ascendancy of internet retailers like Amazon for taking all the business. Who would have guessed that physical stores could soon make a comeback -- and from the least likely source?

Amazon Go

According to reports, Amazon may open up to 3,000 Amazon Go stores for pedestrian shoppers over the next two years. That's what you can do when you have a $1 trillion company.

There should be plenty of real estate available since online stores have thinned out the competition for storefronts. Have you tried to find a Sears or Kmart lately?

The doomsayers saw it coming years ago. Retailers like J.C. Penny, RadioShack, and Macy's closed shops; others like Payless and Sports Authority cashed out or filed for bankruptcy.

It wasn't entirely the internet's fault, the analysts said. But when Amazon captures nearly 50 percent of ecommerce revenues, there is a really big elephant in the room.

Elephant in the Room

It may be counter-intuitive to think that Amazon will go to the streets after so much success in a virtual environment. But Steve Dennis, writing for Forbes, says Amazon must expand its physical presence.

"You don't have to possess a highly functioning crystal ball to see that one key to unlocking major growth in certain large product categories will require a substantial brick-and-mortar footprint," he says.

Dennis says customers still want to touch some products before buying them, and drones can't deliver very large items. Groceries, prepared foods, luxury fashion, home improvement products, for example, have a "much lower ecommerce share."

Elephants, too. Just saying.

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