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

I arrived in BC yesterday for ICSC Whistler. This is my first time here for this conference. I came around this time several years ago for a Slate investor day, but I never participated in ICSC activities per se. So, I’ve come to realize that I don’t really know the proper protocols. I’m an ICSC newbie. Most people I know don’t attend the actual conference. My loose understanding is that you wear Patagonia, ski and snowboard all day, après at Longhorn, and then real estate deals and capital get thrown at you from all angles. I’ll try this and see what happens.

If you’re around, drop me a text or email me at brandon.donnelly@globizen.com.

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

I arrived in BC yesterday for ICSC Whistler. This is my first time here for this conference. I came around this time several years ago for a Slate investor day, but I never participated in ICSC activities per se. So, I’ve come to realize that I don’t really know the proper protocols. I’m an ICSC newbie. Most people I know don’t attend the actual conference. My loose understanding is that you wear Patagonia, ski and snowboard all day, après at Longhorn, and then real estate deals and capital get thrown at you from all angles. I’ll try this and see what happens.

If you’re around, drop me a text or email me at brandon.donnelly@globizen.com.