Strothman News

Amazon: The New Mall

Dustin Wells, Tax Specialist

The new Amazon shopping experience is coming and it’s transforming the way now some and possibly most of us used to shop at the mall. Recently, I came across a WSJ article released in August of 2020 with an accompanying video showing how a small town like Euclid, Ohio, a suburb of Cleveland, Ohio, and some of its former abandoned facilities are being used and will likely be subsequently developed into retail shopping spaces.

This grabbed my attention for a number of reasons but the main reason was that every week I drive by an abandoned SEARS and soon-to-be-vacated commercial space which formerly hosted a K‐Mart. As Mr. Babbitt would say, K‐Mart sucks! Good movie. However, I digress.

Now, on top of having to see these abandoned storefronts regularly and simultaneously realizing Southern Indiana has its local Amazon fulfillment plant on the Jeffersonville, Charlestown, Indiana border on state road 62. I began to conceptualize this article further in my head and imagined how one or both of these singularly, impotent retail spaces would look with Amazon on the store facade. Or even more, how much better would the local economy be if Mr. Bezos and his surmounting online sales giant could benefit local economies more substantially if Amazon was ushered into these local currently failing retail spaces by renovating the retail spaces as they have the industrial, commercial spaces with local, specified and more regional distribution centers as I referenced above.

How much more good would come to our communities and more importantly the citizens of both Southern Indiana and Louisville, Kentucky, and all surrounding counties? Here in the Louisville, Kentucky area, for example, has one large Amazon fulfillment center to service Southern Indiana and the Metro‐Louisville area. Moreover, with local traditional malls and shopping centers being vacated over the past few years due to American buyers moving to online purchases and other failing, struggling outdoor shopping centers due to the state‐by‐state ordered Covid-19 shutdowns and regionalized civil unrest, why not allow Amazon to explore?

In a new, closer than we realize reality, one or all of these “malls” will likely function as a large Amazon retail space(s) and distribution center(s). In part, Amazon would consume these ill‐forgotten and unused commercial retail spaces and transform them into half distribution center(s) and half retail shopping spaces for walk‐in customers and more likely customers who have ordered online and are there to pick up groceries, school supplies, shoes, etc. and simultaneously, transforming Amazon, the most powerful online shopping center, to what will likely become the most powerful local shopping center.

Of note, when considering Covid-19 implications, Covid-19 has accelerated e‐commerce growth by 4‐6 years and the expected US Consumer is expected to spend more than $709 billion on e‐commerce in 2020 according to studies by Forbes and US Ecommerce 2020 projections. Now, why? Why would a company like Amazon be so reticent to consume more physical locations knowing these types of commercial shopping centers and retail sales locations have become obsolete in major but not sole part due to this same company that is now looking to purchase these retail locations? According to the WSJ article, the main reasons are as follows:

  • Free Space – large, open commercial space for local fulfillment centers with greater delivery abilities without further expansive expansion and better shipping speeds to customers.
  • Infrastructure – all current locations already have the infrastructure including electric, utilities, water, etc. in effect, making most of these new retail spaces “turnkey” buys for Amazon.
  • Population Density – these same shopping malls were previously built within larger populated areas without larger, supporting warehouses.
  • Proximity to Highways – these new locations would build on top of the current or planned new retail space locations allow for quick and accurate access to roads, highways, and transporting.
  • Industrial Real Estate – developing new industrial spaces in cities that are open, favorable to such properties and related zoning allow Amazon to store more products and deliver more timely.

Now that we know the why, let’s ponder those same proposed local locations. In my mind, for example in Indiana, is the Greentree Mall in Clarksville, Indiana – no more SEARS! Or what about Vendors Village, the former K‐Mart location, which also operates in Clarksville, Indiana? These are just two potential locations for Amazon to penetrate and service the Southern Indiana and Metro‐Louisville areas with this strategy.

Or, for the Louisville‐metro area, even consider Oxmoor Mall where Von Muar used to operate or the formerly proposed commercial space for Top Golf? In these locations, there would be a larger Amazon shopping center sign that includes internal stores for retail shopping for customers and external pick‐up areas for local residents as well as larger semi‐trucks for deliveries and pick‐ups for distributing products throughout the Metro‐Louisville area and surrounding counties as well. Careful Hurstbourne residents… you may have a tougher fight keeping out Mr. Bezos than you have Mr. Top Golf. Only kidding – slightly.

For Louisville, an even better option would be an Amazon to fill the previously damaged facade of Kroger in the downtown Louisville area. Would it not? I’ve consistently heard Mr. Fischer and other city council members, officials, etc. openly profess the need for a local, grocer in the downtown area. Why not Kroger? Or Walmart? Or now, Amazon? Maybe an even better location option, if I may suggest, is the formerly proposed space for the downtown Walmart in the West End of Louisville? With the clear possibility of hundreds or even thousands of jobs for downtown residents.

Now, much worse, in my opinion, is the local city council members. Careful, sirs and madams. You may find it a tad bit harder to argue against Amazon than Wal‐Mart. Mr. Bezos may be able to withstand the suggestive downgrading better than Mr. Walton after nixing approval of the placement of a new Walmart in West End and denying the local citizenry in which you were voted in to represent, ironically, the inability, the (free) choice to improve their lives by possibly gaining a job of employment or god forbid a career.

What is the harm to our cities by allowing Amazon to improve store facades and create jobs? At this point in the evaluation, little harm, especially when you thoroughly evaluate what good – jobs, new stores, opportunities, access to new food and brands, etc. In all, we are entering a brave new retail world, and Amazon, via Mr. Bezos, is pathing the way forward by plopping down an Amazon mall near you sooner than later and hopefully by way of creating previously lost retail store jobs direly needed as well as potential distribution centers jobs just as Amazon has with the distribution plan in Jeffersonville, Indiana. Look out, Louisville and surrounding counties! Mr. Bezos’s store is coming to a former mall near you!