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