This site depends on JavaScript to run. Please enable it or upgrade to a modern browser that supports it.
{{data.cart.TotalLineItemsAndQuantities}}

ASCM Insights

A Potential Logistics-Retail Junction

title

Since the beginning of 2020, nearly 4,000 companies have filed for bankruptcy. In June, more than 600 filed, up 43% from last year. Experts predict that 2020 will easily set a record for mega-bankruptcies — filings by companies that are $1 billion or more in debt. And the number of companies filing that are at least $100 million in debt will challenge records from the Great Recession.

There have been numerous household names among the businesses that are closing or restructuring, including J.Crew; Neiman Marcus; J.C. Penney; Lucky Brand; Brooks Brothers; Sur La Table; and even America’s oldest department store, Lord & Taylor. In addition to sharing the unfortunate designation of being a COVID-19 retail casualty, these companies have something else in common: Each is a shopping mall store. Which begs the question — what will happen to all that empty space?

According to The Wall Street Journal, the possibility of a series of acquisitions by Amazon associates provides a clue: “Simon Property Group Inc. has been exploring with Amazon the possibility of turning some of the property owner’s anchor department stores into Amazon distribution hubs. … The talks reflect the intersection of two trends that predate the pandemic but have been accelerated by it: the decline of malls and the boom in e-commerce.”

While malls were forced to temporarily close and limit crowds even after reopening, Amazon overcame COVID-19’s logistical challenges to yield its biggest quarter ever. A deal with Simon would be consistent with the e-commerce giant’s plans to accelerate the last mile by increasing the number of distribution facilities near residential areas.

“Amazon needs more locations to capture same-day sales,” says Patrick Penfield, assistant professor of supply chain practice at Syracuse University’s Whitman School of Management. “Placing mini distribution centers into existing malls would allow them to decrease their delivery times further and capture even more online sales, especially with perishables items such as groceries.”

Although granting space to Amazon goes against Simon’s longtime foot-traffic-based business model, Penfield notes that this would also be an outstanding opportunity for mall owners to stop the “retail lease space hemorrhaging” and stay in business.

The Journal story goes on to say that, in addition to warehousing, many mall owners are considering leasing to schools, medical offices and senior living facilities. “With the current pandemic, industrial is the only thing left now,” says Camille Renshaw, CEO of real-estate investment brokerage firm B+E.

Dynamic fulfillment

Those in the warehousing and logistics field have had quite a challenging year, to say the least. In an effort to ease the pressure, the ASCM CONNECT virtual conference will feature a dynamic fulfillment learning path specifically designed to help industry professionals optimize their supply chain organization’s logistics and distribution efforts. You’ll come away with a deep understanding of the concepts and processes that improve the movement of goods and materials. Register today to begin the journey.

Then, continue advancing your proficiency with the APICS Certified in Logistics, Transportation and Distribution (CLTD) designation. The APICS CLTD program gives you everything you need to demonstrate in-depth expertise of key concepts in order to streamline operations, boost your organization’s bottom line and set you apart from your peers. See what CLTD can do for your career and organization.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

Use of Cookies

We use cookies to personalize our website’s content and ads, to provide social media features and to analyze our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you’ve provided to them or that they’ve collected from your use of their services. You consent to our cookies if you continue to use our website.

Summary

{{data.cart.TotalLineItems}} Items

{{data.cart.SubTotalNonMember}}

{{lineItem.DisplayName}}

{{note}}

Qty: {{lineItem.Quantity}}

{{lineItem.LineItemSubTotalNonMember}}

Subtotal:

{{data.cart.SubTotalNonMember}}

Promotional Discount:

{{ data.cart.OrderDiscountTotal == '$0.00' ? '' : '-' }}{{data.cart.OrderDiscountTotal}}

Member Discount:

{{ data.cart.TotalMemberDiscount == '$0.00' ? '' : '-' }}{{data.cart.TotalMemberDiscount}}

Total

{{data.cart.Total}}

Live Web Chat