Upping Roots: The Industries Casting Off The Shackles Of Physical Locations
If you’ve walked through a mall in recent years, you may have noticed some changes. There are more empty storefronts, fewer customers milling about, and more retail space dedicated to either independent businesses or entertainment and dining options. Increasingly, more and more businesses are moving their operations online, abandoning physical operations for digital ones.
It is impossible to talk about the growth of online businesses without talking about Amazon. They were the first major retail company to forgo physical locations entirely in favor of an e-tail only model and they have been incredibly successful. Launched in 1999 as an online book seller, the company quickly expanded their retail operations into other areas. Amazon has since diversified from retail into streaming services and smart devices. In 2018, Amazon became the second public company in history to be valued at $1tn and they continue to grow.
Spending time near an Amazon distribution center gives you some idea of the sheer scale of their operations; the stream of dark grey delivery vans coming and going seems unending, a constant flow of merchandise. Even on the highways, it is impossible to be driving for long without seeing a familiar blue and white semi-truck headed to or from an Amazon warehouse. Though the company has been under some scrutiny in recent years for their treatment of their warehouse employees and in particular for their efforts to prevent these employees from joining or forming unions, its profits have not suffered as consumers have become increasingly reliant on their efficient and affordable system.
Retail is obviously the industry most effected by the move towards an online-only existence. Even well-established brands are beginning to struggle in the face of online competition. The buyout of Debenhams by online retailer Boohoo is a perfect example. Debenhams had been one of the United Kingdom’s oldest and most recognizable department stores. Established in 1778, it had adapted and expanded and managed to keep up with changes in retail into the 21 st century. However, its numerous storefronts proved to be too big of a drain on its resources in the face of online retail competition, and the company was unable to remain viable.
The far more recently established Boohoo, founded in 2006, has quickly become a major player in the world of fast-fashion retail. Their buyout of Debenhams this year is only the most recent of their acquisitions. Boohoo has been able to grow by taking over more recognized and trusted retail brands and moving their operations online. Among the other brands now under their control are Oasis, Burton and Dorothy Perkins. Boohoo’s success does come without a cost however, particularly the exploitation of the factory workers producing the clothing for their brands.
For some companies, a hybrid strategy has emerged as the ideal recipe for success. The casino industry is one sector that has managed to combine traditional brick and mortar casinos with their digital counterpart. SkyCity Online Casino is one such example. SkyCity Entertainment Group is one of the most successful gambling companies in the southern hemisphere. Since the opening of their SkyCity Auckland casino in 1996, they have opened properties across New Zealand and Australia and created a lucrative entertainment and hospitality empire centered around their physical casinos. By branching out into the digital realm, the company was able to leverage their name recognition and consumer trust to increase their audience. Their online casino offers not only the familiar online slot games and jackpots but live casino gaming as well. This strategy has proved highly effective.
If this trend towards purely or mostly digital business continues, it will be interesting to see the impact it has on the landscape and infrastructure of the United States in particular. Will the ever-growing need to ship huge quantities of merchandise as quickly as possible lead to the regeneration of railway infrastructure, or will Amazon’s plan to deliver by drone become a reality? Some old shopping malls have already been converted into studios and apartments, while others have been given new life as entertainment venues. Maybe with time we will even see some of this unnecessary retail space converted into green space to make cities and their outskirts more livable.
The death of physical retail spaces doesn’t have to result in some sort of dystopian wasteland of abandoned malls and empty parking lots. With a bit of creativity and a willingness to invest in our communities, the dominance of online businesses could be the start of an exciting new chapter in urban development.