The Fate Of America's Dying Supercenters
America's supercenters are dying a slow death.
Huge big-box stores like Wal-Mart Supercenters and Target are being phased out in favor of "some combination of value and convenience," Goldman Sachs recently wrote.
"Just about every major trend we're following right now bodes poorly for power center retail," Doug Stephens, founder of industry website Retail Prophet and author of "The Retail Revival: Re-Imagining Business for the New Age of Consumerism" told Business Insider.
Americans are driving less than they have in decades. Populations are flocking to smaller, urban communities over sprawling suburbs. And consumers in their 20s and 30s increasingly prefer small, local shops to big-box retail.
The proliferation of e-commerce also means that consumers can order many products online rather than having to drive to the store.
"The days of swinging the doors open on a dusty warehouse and waiting for throngs of customers to descend on it are numbered," Stephens said.
In response to this trend, retailers like Wal-Mart and Whole Foods are building smaller stores.
But that solution still leaves empty supercenters.
Retailers could repurpose the stores in a few ways, Stephens said. Some spaces could be used to test showrooms or store formats. Retailers could also use the venues for e-commerce.
"Either you turn them into retail spaces that are so wildly experiential and memorable that people will travel to get to, or you make them multi-purpose distribution centers that allow for direct-to-home delivery, buy-online-pickup-in-store and other types of services," he said.
Many retailers have begun to use stores as e-commerce distribution centers. Wal-Mart and Sears have recently started encouraging customers to pick up pre-ordered merchandise in stores.
In some markets, communities are turning deserted stores into public spaces.
The town of McAllen, Texas, turned an old Wal-Mart into an award-winning library.
Using the old spaces for community good will probably become more common over the next 20 years, Stephens said.
"I suspect we'll see the format die a slow death," he said.
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