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Death of Commercial Real Estate and Retail Commercial Estate, with business going online with better pricing etc


When it comes to the retail commercial real estate market, “the wolf is at the door”. The demand for commercial real estate continues to decline for a variety of reasons. One of the biggest factors is the rapidly growing popularity of ecommerce. Consumers are increasingly opting to shop online versus at physical store locations. As a result, existing brick and mortar stores are closing and there is little demand for new facilities.


It’s easy to see the appeal of online shopping. Americans want a big selection and they want to be sure they’re getting the absolute best price available. They don’t want to waste time and gas driving all over town, only to be told that what they want is out of stock, and they don’t want to worry that they could’ve gotten a better deal somewhere else. Nor do they want to fight the crowds during peak shopping times such as Christmas.


The Internet provides consumers with a simple and convenient way to find exactly what they’re looking for in the comfort of their own home – twenty four hours a day, seven days a week. Search engines offer the ability to easily compare items and prices from many different merchants at once. Auction sites like eBay let shoppers stretch their dollars farther than ever, offering deals that no traditional retailer could hope to match.


From the perspective of the retailers themselves, an online model is also very appealing. It eliminates the costly overhead associated with obtaining, staffing, insuring and maintaining a physical location. It makes it much easier to track consumer data and target individualized advertising and recommendations. It also makes it easier for small retailers who would once have been limited to only those individuals in their specific geographic area to reach potential customers worldwide.


Robin Trehan is management and financial expert.   More information