BY MARK B. SOLOMON, EXECUTIVE EDITOR–NEWS
THE MALLING OF LOGISTICS
Strategy
IT’S HARD TO ESCAPE THE IRONY IN AMAZON.
com Inc.’s plan to lease space for an 855,000-square-
foot fulfillment center where Cleveland’s once-mighty
but long closed and now mostly demolished Randall
Park Mall once stood. Over the next few years—the
Amazon center is scheduled to be operational in late
2018—locals who had once bought stuff at Randall
Park will find their online orders fulfilled out of the
same property.
Billed as the world’s largest mall in the 1970s,
Randall Park, like other malls, fell on hard times as
the e-commerce phenomenon essentially invented by
Seattle-based Amazon blunted consumers’ need or
desire to drive to a shopping center. In its traditional
form, the mall model is unlikely to make a comeback.
E-commerce, which accounts for just 12 percent of
total U.S. retail sales, is on the cusp of making large
inroads in market share. There is a surplus of mall
space; real estate services giant CBRE Group Inc.’s
mall “availability” rate, which measures vacant space
as well as occupied space that’s being re-marketed to
new tenants, today stands at 6 percent, double the rate
of less than a decade ago.
With their tenants experiencing declining traffic
and facing a mix of falling rents and rising costs, many
mall operators may have no choice but to shutter.
Investment firm Credit Suisse predicted in June that
20 to 25 percent of U.S. malls could close during the
next five years. The main culprit: a projected doubling
of online sales of apparel, which is the principal prod-
Will Amazon’s lease of Cleveland’s defunct Randall Park Mall for a fulfillment
center kick-start interest in converting the retail icons to industrial use?
The mall is dead!
Long live the mall!
