Macy’s stock is up this morning. Their physical market presence is predictably down.
Do not buy their stock just yet. Wait until Macy’s closes nearly 100 stores in what is now regarded as the biggest red flag in retail merchandising since the market crash of 2008.
The retail segment of the CRE market has been flipped over and is shaking out. There’s more change coming as digital consumers and their shopping habits continue to shape the retail industry’s commitment to bricks-and-mortar operations.
Our behaviors are transforming some of the most renown retail establishments in the nation. In the end, the change will make them better because it is customer-driven.
Small is the New Big
We are going to see retailers continue to shrink their physical presence within all trade areas as small becomes the new big, where bits and bytes become modern transaction currency.
For me, the tightening of operating costs and the reduction in square footage is making a lot of sense in a world driven by Facebook, Twitter, YouTube, Google+ and the entire spectrum of millisecond communications. And, I have not even mentioned Amazon’s 30% per year growth rate each year for more than a decade straight.
Let’s remind ourselves that Apple sold a lot of iPods, iPhones and computers without a lot of retail operations. [Read more…]