This month, Amazon announced that it will be opening a new 230,000 sf big box store in the suburbs of Chicago. Half of the store will be consumer-facing, where customers can browse aisles for groceries, household items, and general merchandise, and the other half will serve as a kind of micro-fulfillment center.

Supposedly, the municipality applied a restriction to the lands requiring it to be a consumer-facing store; it can't just be for fulfillment. But it seems that some kinds are allowed.

My understanding is that the "fulfillment" component of the project will allow customers to order (on kiosks throughout the store) certain items "from the back" and have them delivered to the front of the store for checkout. Importantly, it also decouples inventory management and optimizes the back-of-house for online grocery.

This is a big store; bigger than even a Walmart Supercenter. It also sits on a 35-acre site, which means the lot coverage is only around 15%. However, there's also a large stormwater management pond and room for additional pad buildings based on this site plan:

A store this massive is a fascinating signal because it's a clear admission from Amazon that it needs to get its brick-and-mortar strategy right if it wants to compete in grocery. Even after its Whole Foods acquisition, it's only about 3% of the US grocery market, whereas Walmart is sitting at over 20%.

Ten years ago, it did not feel like this would be where we would end up. Retail as a real estate asset class was out of favor. Brick-and-mortar retail seemed destined to be disrupted by e-commerce and drone delivery. But retail evolved and grocery proved to be a unique facet of retail. At least so far.

Cover photo by Brittani Burns on Unsplash

Creating anything from scratch is more difficult than working from an established base. This is absolutely true when it comes to starting new neighborhoods and communities. What do you build first? What will be the anchors? And how do you balance hard and soft infrastructure to make it an attractive place before a critical mass is achieved?

I was thinking about this over the weekend while walking around Whistler Village, so I tweeted this out. If you've been before, you know it's packed with people all throughout the day. I would characterize it as a successful place.

But the responses I got on Twitter were along the lines of: "Are you joking? It's a fake utopia. It may be busy, but staff are forced to live on the outskirts of the village in dorms."

These comments are not entirely wrong. Resort villages are typically a kind of Disneyland. Attainable workforce housing is a major challenge for resorts, and it's typical to make the building of it a precondition to development. You can't run a resort without staff.

But none of this changes the fact that it is still very difficult to create successful places from scratch. There are lots of ski resorts that don't have the energy of Whistler, and lots of new planned communities that don't have the foot traffic of older neighborhoods. The Canary District in Toronto comes to mind as a place that is still settling in. That is how you know it's challenging.

Creating successful places from scratch requires the right strategy, careful design and programming, patience, and probably the ability to subsidize the right tenants to seed activity early on. It's also helpful if you can avoid going broke before the neighborhood comes alive.

Cover photo by Peter Robbins on Unsplash

This month, Amazon announced that it will be opening a new 230,000 sf big box store in the suburbs of Chicago. Half of the store will be consumer-facing, where customers can browse aisles for groceries, household items, and general merchandise, and the other half will serve as a kind of micro-fulfillment center.

Supposedly, the municipality applied a restriction to the lands requiring it to be a consumer-facing store; it can't just be for fulfillment. But it seems that some kinds are allowed.

My understanding is that the "fulfillment" component of the project will allow customers to order (on kiosks throughout the store) certain items "from the back" and have them delivered to the front of the store for checkout. Importantly, it also decouples inventory management and optimizes the back-of-house for online grocery.

This is a big store; bigger than even a Walmart Supercenter. It also sits on a 35-acre site, which means the lot coverage is only around 15%. However, there's also a large stormwater management pond and room for additional pad buildings based on this site plan:

A store this massive is a fascinating signal because it's a clear admission from Amazon that it needs to get its brick-and-mortar strategy right if it wants to compete in grocery. Even after its Whole Foods acquisition, it's only about 3% of the US grocery market, whereas Walmart is sitting at over 20%.

Ten years ago, it did not feel like this would be where we would end up. Retail as a real estate asset class was out of favor. Brick-and-mortar retail seemed destined to be disrupted by e-commerce and drone delivery. But retail evolved and grocery proved to be a unique facet of retail. At least so far.

Cover photo by Brittani Burns on Unsplash

Creating anything from scratch is more difficult than working from an established base. This is absolutely true when it comes to starting new neighborhoods and communities. What do you build first? What will be the anchors? And how do you balance hard and soft infrastructure to make it an attractive place before a critical mass is achieved?

I was thinking about this over the weekend while walking around Whistler Village, so I tweeted this out. If you've been before, you know it's packed with people all throughout the day. I would characterize it as a successful place.

But the responses I got on Twitter were along the lines of: "Are you joking? It's a fake utopia. It may be busy, but staff are forced to live on the outskirts of the village in dorms."

These comments are not entirely wrong. Resort villages are typically a kind of Disneyland. Attainable workforce housing is a major challenge for resorts, and it's typical to make the building of it a precondition to development. You can't run a resort without staff.

But none of this changes the fact that it is still very difficult to create successful places from scratch. There are lots of ski resorts that don't have the energy of Whistler, and lots of new planned communities that don't have the foot traffic of older neighborhoods. The Canary District in Toronto comes to mind as a place that is still settling in. That is how you know it's challenging.

Creating successful places from scratch requires the right strategy, careful design and programming, patience, and probably the ability to subsidize the right tenants to seed activity early on. It's also helpful if you can avoid going broke before the neighborhood comes alive.

Cover photo by Peter Robbins on Unsplash