COVER STORY
Tech
Titan
Amazon’ s hold on real estate
BY MONIQUE DU TOIT
I
t’ s been hailed“ The Amazon Effect”- a doomsday-esque description of the role online retail is playing in the eventual downfall of commercial property.
The predictions
Online shopping has been described as a game changer. It seems we can’ t turn our heads without being confronted by an opinion on how retail will look in 10 years’ time. And it’ s true. Retail is shifting. With the advances in technology, we’ re a more connected society than ever before.
Along with the ability to communicate with virtual strangers, this has also enabled us to dabble in the world of online retail. As our lives get busier and more stressful, with an ever-increasing amount of hours being spent in traffic or answering emails, we’ re always on the hunt for a more convenient solution to everyday problems.
But how real is the threat to commercial property, really?
The fear is that consumers will eventually abandon physical stores altogether. Insteady, they’ ll order their food, toiletries, and furniture online. Before you know it, we’ ll be a bunch of isolated hermits, interacting only with the delivery man. Or, better yet, with no one at all, if Amazon Key takes off.
The reality
Last year, Amazon reignited these fears with its purchase of Whole Foods. Traditional retailers’ stocks dropped and we all gathered around to speculate about the next big fall. The irony, however, is that the move signified exactly the opposite.
While it’ s impossible to predict the future( try as we may), the move to a purely online shopping world is nowhere near being a reality today. Amazon knows this- which is precisely
8 MAY / JUNE 2018 SA Real Estate Investor Magazine