| July 25 – 31, 2022
 Target announced it is opening three more sortation centers to cut delivery costs and get online purchases to customers faster. Products picked and packed in-store get sent to the sortation centers, and then packages going to the same town or nearby neighborhoods are batched together in dense delivery routes. Sound familiar? Why yes, this is indeed the same concept we’ve been excited about for mall owners for quite some time. We know that emulating something Target or Walmart is doing can seem daunting, but there is a way to use this model with your retailers in your centers and really see great benefit. Let us help you see the vision!
This week we heard more about how the current macroeconomic climate is impacting retail, from a surplus of warehouse space, to a 10-year low in retail space availability, to layoffs. While it’s still not clear if we are in a recession or not, it is clear that things are shifting, so it’s a great time to make sure you and your business are in good shape and prepared for the future? Need some help? Reach out on Twitter or LinkedIn. |
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Digital Meets Physical
Shopify Says It Will Lay Off 10% of Workers, Sending Shares Lower [The Wall Street Journal]
Tobi Lütke, the company’s founder and chief executive, told staff in a memo sent Tuesday that the layoffs are necessary as consumers resume old shopping habits and pull back on the online orders that fueled the company’s recent growth. Shopify, which helps businesses set up e-commerce websites, has warned that it expects revenue growth to slow this year. |
Amazon to raise Prime fees in Europe, cites rising costs [Associated Press]
Amazon is raising its Prime fees in Europe, the company told customers on Tuesday, days ahead of its second-quarter earnings report. Among other places, the price of a monthly Prime membership will tick up in the United Kingdom from 7.99 to 8.99 pounds, while the annual cost will increase from 79 to 95 pounds ($114.26), the company said in the notice sent to customers. |
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As consumers return to stores, why would Amazon shut the door? [RetailDive]
The vast majority of shoppers still favor stores, however. About three-quarters of consumers prefer them even for ordinary household items, according to consultancy Big Village. Yet in a year when retailers drastically eased up on store closures and Amazon itself saw a 3% decline in its Q1 online retail sales, the e-commerce giant closed all of its bookstores, 4-star stores and pop-ups. |
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Micro & Last Mile Fulfillment
E-Commerce Warehouses Are Springing Leaks [The Wall Street Journal]
People are taking a breather from online shopping. Amazon.com is the most visible victim, but the vast warehouse ecosystem that has sprouted to serve it could be hit too. Consumers have gone back to buying goods in stores, which is slowing the blistering growth in e-commerce seen during the pandemic. U.S. sales in brick and mortar shops have grown faster than online purchases for four consecutive quarters. |
Global last-mile delivery market to reach $123 billion by 2030 [Supply Chain Quarterly]
The market for last-mile delivery services is projected to reach $123 billion by 2030, a compound annual growth rate (CAGR) of more than 13% over the next eight years, according to data from Straits Research, released this month. The projections represent triple the 2021 market value of $40.5 billion, and are driven by e-commerce trends and consumers’ growing reliance on fast, easy shipping. |
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Target chases bigger e-commerce profits with new delivery hubs, fleet of drivers [CNBC]
Target is opening three more sortation centers to cut delivery costs and get online purchases to customers faster. At the hubs, the retailer groups packages heading to similar destinations and uses contractors to deliver them locally. The company opened the first sortation center in its hometown of Minneapolis and will soon have nine of them — with plans for more expansion across the country. |
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Restaurants & Ghost Kitchens
Checking in on the State of the Restaurant Consumer [QSR Magazine]
According to a new study by data intelligence company Near, one thing that’s become clear is there’s no longer a singular dining experience. Using privacy-led, human movement data along with survey results, the report explored themes such as whether or not consumers are ready to eat out again, top priorities for restaurants, trends to watch, loyalty programs, and the ever-evolving future of takeout and delivery. |
Kroger invests in Kitchen United [GroceryDive]
Kitchen United has raised $100 million in Series C funding with the help of several new investors, including Kroger, Circle K, Simon Property Group and Restaurant Brands International. Previous investors, including GV, RXR Realty, DivcoWest and former NFL player Peyton Manning, also participated. The ghost kitchen operator plans to expand from 15 locations to over 500 locations over the next five years using many of the malls, shopping centers and supermarkets operated by the new investors. |
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Mall Talk
Availability of retail real estate hits a 10-year low [Chain Store Age]
The retail availability rate hit a 10-year low of 5.1% in the second quarter of 2022, according to CBRE. The neighborhood, community, and strip center segment is suffering the most, its available space falling by 2.4 percentage points over the past five years and 5.3 points over the past 10. Availability in the mall and power center sectors both hovered at around 6% at the end of the recent quarter. |
Shop-in-shops are everywhere — here’s what it means for stores [Glossy]
Shop-in-shops have proliferated in recent years as retailers have sought to draw in new customers and get the most out of their brick-and-mortar fleets. Brands, meanwhile, have seized on the strategy as an affordable way to gain a foothold in physical retail and raise awareness beyond their existing base. As retailers integrate more of these small-scale spaces, though, flexibility and thoughtful design are essential. |
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Adobe: Total online sales during Prime Day near $12B [RetailDive]
Capturing consumers seeking deals amid inflation concerns, consumers spent $22.4 billion during this year’s Amazon Prime Day week, a 6.1% increase from last year, according to an Adobe report released Tuesday. During the Prime Day event between July 11 and July 12, shoppers spent $11.9 billion online, up 8.5% from last year. |
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