Amazon has been in talks with a leading mall owner in the US, Simon Property Group, about converting some of its mall spaces into Amazon fulfillment centers. Details around the size of the footprint under consideration remain unclear, but a deal like this would enhance Amazon’s proximity to residential areas, fueling its same-day delivery network.
Amazon has already got experience of utilizing mall real estate, with the acquisition of some space in Akron, Ohio in 2019. Going forward, the strategy could be fueled by the increasing number of empty retail outlets in US malls left by suffering department store operators, such as JCPenny and Sears. We could also feasibly expect to see Amazon taking this strategy one step further and transforming the mall experience through its own ecommerce-focused retail formats - such as its recently renewed mall-based pop-ups or its 4-Star store concept.
With Amazon focused on growing its fulfillment capacity further in H2 2020, as outlined in its Q2 earnings last week, the bar will continue to be raised on delivery speed and efficiency, forcing suppliers to double down on last-mile innovation and supply chain agility in order to maintain relevance on the marketplace.
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