Amazon eyes mall space for fulfilment centres

Amazon is in talks with US mall owner Simon Property Group to turn JCPenney and Sears locations into scaled down fulfilment centres.

That’s according to a report by the Wall Street Journal.

Such a deal would provide Amazon with hubs perfect for same-day delivery.

“Amazon has understood from their beginning that the way to win in retail isn’t just through speed but precision,” says Brittain Ladd, a supply chain consultant and former Amazon exec.

“How does a retailer become more precise? By fulfilling closer to customers and using infrastructure to their advantage.”

“I believe that Simon is positioning themselves to be acquired by Amazon. This is an "all chips to the centre of the table" move and otherwise makes no sense,” adds Shlomo Chopp, Founder and CEO, Anchor Shops.

Turning a portion of your mall into a fulfilment centre operated by a third-party looking for efficiency without adding massive value to your tenants on the retail side is watering down your property, he argues. You may as well convert the whole thing to warehousing.

Also, for a mall owner who is buying legacy watered-down brands, just to keep the malls afloat, enabling Amazon to deliver next day at a reduced cost is the great negator of this strategy.

“A man dying of thirst may drink water from a slow acting poison well if he believes that he'll find the antidote before his time runs out,” Chopp concludes.