E-tail vs. retail : the future of the downtown regional shopping center

Abstract

The proliferation of Internet shopping as a viable retail format has attracted a great deal of media attention about its potential impacts on place-based shopping. Specifically, the growing estimates of online retail sales have caused the real estate industry to become increasingly concerned about the ability of Internet shopping to replace shopping at bricks-and-mortar stores. However, the current research and literature lacks a systematic assessment of the potential impacts of this emerging retail format on the traditional models of shopping. Without such an assessment, planners and real estate professionals will find it difficult to navigate the various claims in the media and are faced with great uncertainty about their traditional practices. This thesis develops a structured approach to explore the potential impacts of e-tailing on place based shopping. The analysis focuses on the downtown regional shopping center as the prototype of study. The value chain concept is applied to disaggregate retailing into its fundamental components and their related real estate connections in order to identify traditional critical success factors of the downtown shopping center. Three additional factors are introduced to the analysis to reflect the changing nature of shopping. To inform the assessment of the potential impact of e-tailing on each factor, literature research and six qualitative interviews with experts from the field of planning, retailing, and real estate were conducted. The analysis showed that Internet shopping will not replace place-based shopping at the downtown regional shopping center but will significantly modify the critical success factors and their relative importance. These changes reveal three themes for the future role of the downtown regional shopping center in the city. The themes are: i) there will be a strong interaction between e-tailing and the downtown shopping center; ii) technology will drive an increased demand for experiential activities in the city; and iii) convenience, task-oriented shopping for goods that require less touch and interaction will be done elsewhere. The thesis concludes with recommendations for planners and real estate professionals on how to address the future role of the downtown shopping center and prepare for the evolution of "e-commerce" into "experiential commerce."