Amazon Could Kill Car-Dependent Big Box Retail. Will It Also Kill Main Street?

Pandora's box? Photo: Paul Swansen/Flickr
Pandora's box? Photo: Paul Swansen/Flickr

It’s been decades since big box stores — and before that, the Sears catalog and the modern supermarket — first started roiling Main Streets across America. The latest centralized retail behemoth, of course, is Amazon. The online giant is chipping away at the dominance of big box stores, which might warm the hearts of people who watched Walmart and other retailers ruthlessly suck the life out of walkable downtowns for years on end.

But is it really a good thing? This week, Kea Wilson and Chuck Marohn at Strong Towns offer a point-counterpoint debate over Amazon’s impact on the ability to build durable local communities and economies.

Wilson, a former bookseller who has long been skeptical of Amazon, warns that its move to dominate virtually all forms of retail could further chip away at cities and towns. Plenty of wreckage is being left in its wake. For starters, she says, there’s the patchwork of sales taxes across the country that often allows the company to undercut local competitors.

Even worse, Amazon is playing cities and towns off each other as it secures tax breaks to locate its massive distribution centers, and the jobs it creates stuffing boxes for delivery are not what you’d call secure.

“One of the items on the Strong Towns strength test that’s particularly meaningful to me is this: ‘If your largest employer left town, are you confident the city would survive?'” Wilson writes. “When you globalize that idea a bit, it says something even more vital: that if we want our communities to be strong, we have to think very carefully about the unseen structures upon which we rely, and what we’d do if they failed.”

Marohn would rather focus his energy on fixing the game, not the player. The economic system is set up to favor centralization, he says, and Amazon is just the latest mega-company to take advantage. “If you’re intellectually consistent in opposing Amazon, you must also be against a system that gives it overwhelming competitive advantage,” Marohn writes. “Stop supporting the centralization of our economy — political, social and financial — and you’ll get closer to the outcomes you want.”

Amazon actually provides some benefits, Marohn concedes, by reducing personal car trips to big box centers. “I see Amazon as a bridge to something sane,” he writes. “Replacing Walmart with Amazon is a radical shift that, if it does nothing else, allows people an opportunity to stay out of their car when consuming.”

Meanwhile, the online retail behemoth shows no signs of slowing down in its quest to sell everyone everything through its integrated supply and logistics chain. The Wall Street Journal reported this week that Amazon’s autonomous vehicles unit is focused on taking advantage of technological advances to reduce the cost and time required for delivery. Then, of course, there are the Amazon drones.

The conversation is far from over: on Thursday, Strong Towns will release a podcast with Chuck Marohn and Kea Wilson debating the impact of Amazon, and the public is invited to chat on the StrongTowns Slack channel about Amazon at 12:30 p.m. ET on Friday.

  • Larry Littlefield

    I’m optimistic about this. One thing the “category killers” had was selection, but Amazon.com trumps that.

    People getting in cars to buy goods would consume services on the same auto oriented strip. People shopping online consume services and persishable goods closer to home.

    Meanwhile, retailers are facing bigger headwinds. People just don’t have as much money to spending due to high debts, rising taxes, falling incomes, etc. That’s a bigger problem for consumer spending overall.

    http://www.bizjournals.com/bizjournals/news/2017/03/20/blame-store-closures-on-demographics-and.html

  • One positive spin is that it might reduce private car travel in cities and, in turn, change how people think about where they live. We’d obviously hope that folks would want to live close to each other and close to public mixed-use spaces, but who knows. Purely speculating.

  • Andy Chow

    Online purchase has still not catching on in high density cities like Hong Kong. Part of the issue is that the delivery person cannot just leave the box at the front door like in typical suburban towns. Door to door delivery requires entering buildings and go to the individual level so it adds more time.

    For online delivery it is typical to drop the box at a local 7-11 and have the customer to pick up from there.

    On the other hand, small restaurants can provide lunch delivery on foot to offices. Some supermarkets offer delivery because of the weight of certain items (like rice and pet food) and the fact that most people don’t have cars.

    Rather than buying a week’s food supply and stuff the fidge, smaller living units essentially require people to shop for groceries almost daily.

  • Larry Littlefield

    For that reason Amazon.com and its future competitors may very well open small storefronts within walking distance where goods can be ordered and picked up. For clothing, the store might include a measurement service.

    In that case, what has been eliminated is the need to stock items, or even make times, that have not already been bought, with an infinite amount of selection.

  • ahwr

    Amazon.com and its future competitors may very well open small storefronts within walking distance where goods can be ordered and picked up.

    Think they’d go to the trouble instead of continuing to partner with existing stores to put amazon lockers in?

  • Vooch

    doorman

  • Vooch

    privatize the interstates

    let Amazon pay the full cost of driving and you’d soon see the model die

  • Larry Littlefield

    Amazon is opening stores around the country right now.

    https://www.fool.com/investing/2017/02/08/heres-what-amazon-actually-plans-for-physical-stor.aspx

    The bottom line is that adjusted for inflation, the Census Bureau recently reported that people ages 25 to 34 have lower incomes than their predecessors did 40 years ago.

    Housing costs more. Health care costs more. Taxes are higher — for senior benefits, debts, pensions. Less and less money is left.

  • Yes, every day while stuck for hours in traffic, people contemplate why they live so far away from their jobs. Cost of living determines where people live, not whether Amazon is taking out big box retailers. Even formula retail knows it can’t make it in parts of the more expensive cities.

  • You’re right. I was also speaking more from the experience of living in Phoenix. Here, the cost of living is obviously still a determining factor, but folks don’t even think twice about moving 30, 40, 50+ miles from work. We also have dozens of massive, mostly-parking-lot shopping centers that (in my opinion) make people drive more to buy things. My argument isn’t whether or not what Amazon is doing is good, I was just trying to put one positive outlook on the table.

  • HamTech87

    Tolling doesn’t require privatization.

  • Vooch

    technically you are correct but politics says privatization is only way to remove subsidies

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