Welcome to Brick-and-Mortar Retail 2.0

Clarke says that retail property owners, “have to understand what’s happening. You cannot be slow to change or embrace different demands for space.”

SANTA BARBARA, CA–Clarice Clarke sees a lot of irony in the current retail real estate dynamic. “When Amazon was starting in the book business,” the president of Lee & Associates Central Coast explains, “there were some powerful big-box, category-killer retailers in that space. Amazon came along and gave them some meaningful competition.” Meaningful to the point that most are shuttered today.

But here’s the ironic part. “They vanished and cleared the path for Amazon to enter the brick-and-mortar bookstore business,” says Clarke, who is headquartered in Santa Barbara. But the 800-pound online gorilla did so in a very different way, having already collected a trove of data on you–on how you shop and what you want. As a result, stores are no longer pacing out to the 30,000 and 40,000 square feet they once did, but rather are coming in at a more bite-sized 5,000 feet.