Retailers that have learned to match Amazon's ease and instant gratification of e-commerce shopping are flourishing as the pace of store closings has slowed
Malls are being hollowed out. Shops are closing by the thousands. Retailers are going bankrupt. — But it may be too early to declare the death of retail.
Context & Ripple Effects
This 2018 piece pushed back on the 'retail apocalypse' framing at its peak: the argument was that store closings were a sorting process, not an extinction event, and that chains which replicated Amazon's convenience were thriving while the rest hollowed out malls. Later coverage largely vindicated the thesis — by late 2024, US open-air shopping center vacancies had fallen to historically low levels even with e-commerce holding roughly 16% of sales, per the FT's report on record-low vacancies.
The twist in the arc is Amazon itself: the company whose playbook the survivors copied has struggled in physical retail, shrinking its Amazon Go footprint by about half since early 2023 to just 16 stores. Meanwhile, surviving stores found new jobs entirely, increasingly serving as online fulfillment centers as foot traffic declined.
First-order effects
- Retailers that matched Amazon's ease and instant gratification capture the demand released by weaker chains' thousands of closures, while laggards continue into bankruptcy.
- The slowdown in closing pace changes the near-term math for mall owners, who face fewer new dark anchors than the bankruptcy headlines implied.
Second-order effects
- Landlords and shopping centers bifurcate: properties anchored by adapted retailers fill up, pushing vacancy to historic lows, while obsolete mall space gets converted to other uses such as fulfillment.
- Amazon's own retreat from physical formats like Go hands traditional retailers room to compete on convenience without facing Amazon's storefront expansion.
Third-order effects
- If the pattern holds, retail settles into a barbell: digitally fluent operators absorbing share while the long tail closes, making 'retail apocalypse' forecasts a story about distribution of outcomes rather than industry death.
- Store networks get revalued as logistics assets, blurring the line between retail real estate and e-commerce infrastructure.
The trend: Brick-and-mortar retail is consolidating around operators that replicate e-commerce convenience, with physical stores doubling as fulfillment infrastructure rather than disappearing.