The Strategy Behind Turning Department Stores Into Warehouses

Fulfillment for e-commerce requires three times the warehousing space of traditional brick-and-mortar store inventory, given the greater variety of SKUs and space-intensive shipping and parcel operations. With e-commerce growing in the pandemic, supply chain players are scooping up space where they can find it, especially if it’s close to areas with high population density. Amazon is reportedly in talks with Simon Property Group to take over mall spaces left vacant by closed department stores, namely those that once belonged to J.C. Penney and Sears. An anonymous source told The Wall Street Journal that Amazon would turn these spaces into online fulfillment centers. Amazon and Simon have been tight lipped about if it’s really happening, and why. “Amazon has a policy of not commenting on rumors or speculation,” an Amazon spokesperson said in an email, and Simon didn’t respond to a request for comment. Read more at Retail Dive.