Amazon is, by far and large, the heaviest hitter of the times when it comes to the changing face of the commercial retail market.  Its impacts on commercial retail have been felt far and wide by businesses both big and small.  Even locally, the landscape of retail space in Baton Rouge has been drastically changed by the far-reaching effects of what has become known as the ‘Amazon Effect’.  So, what does this mean for the future of brick-and-mortar retail?  Let’s take a look!

What is the ‘Amazon Effect’?

The term ‘Amazon Effect’ was coined to make sense of the huge disruptions and vast changes that started occurring to the commercial retail market as e-commerce has grown in popularity over the years.  Due to the public’s shifting and growing relationship with online purchasing, traffic to online retailers has increased exponentially, while brick-and-mortar retail shops have seen a sharp decline in customers.  This shift has been felt everywhere, including throughout the majority of retail space in Baton Rouge.  Does this spell impending doom for all retail businesses?  Not in the least, but it certainly means that many retailers have to learn to change with the times or run the risk of closing their doors.

Noticeable Local Impacts Over the Past Year

baton rouge commercial retail market closingsAll throughout America, both big box retailers and businesses of all sizes have responded to the aftershocks of the Amazon Effect.  Retail space in Baton Rouge and the rest of Louisiana has changed dramatically in a relatively short amount of time as well.  Last year alone, Macy’s at the Mall of Louisiana announced its decision to convert a large portion of their anchor store into a discount outlet called ‘Macy’s Backstage’ in an effort to keep up with the changing times, Kohl’s announced its decision to downsize four of its locations in the state of Louisiana, Winn-Dixie went public with its bankruptcy, and Toys ‘R Us closed its doors for good all across America.  These are just the household names we’ve come to know!  What about the little guys?  Many smaller businesses are also feeling the trickle-down from the Amazon Effect.  The Cortana Mall, for example, has had several retailers close their doors over the past few years, eventually leading the property itself to be put on the market.

The Changes You Might Expect Moving Forward

Unfortunately, the decline in brick-and-mortar retail traffic is expected to continue steadily for the next 5-10 years.  That does not, however, mean that the traditional retail business is dead, only that a newer model is emerging that may take some getting used to.  Retail space in Baton Rouge has jumped on board in an effort to keep up with these changes!  Take for example the new Highland Park Marketplace, River House, Long Farm, or Nicholson Gateway.  Each of these has been built and/or revamped to meet the changing response to retail.  More and more mixed-use buildings are emerging, offering the public easy access to a wider variety of experiences mixed-in with their traditional shopping experiences.  Strip malls previously geared solely towards retail are now seeing an influx of medical centers, dining options, office space, and more.

The retail experience itself is changing as well.  With millennials proving to be much more frugal and selective shoppers than their predecessors, retailers have to keep up with their demand by offering drastically reduced pricing or high-end experiences that the buyer won’t be able to easily find elsewhere.  In other words, millennials want more and they want it for less, creating a growing need for retailers to get creative and stand out in a way that sets them apart from their competition.  You can expect to see more and more discount stores popping up and/or smaller local retail shops that offer incredible service and incomparable experiences.

Another expectation is that larger retailers will continue to downsize, leading to even more vacancies!  This doesn’t, however, mean that this will be the end for these businesses.  Rather than closing their doors, many of these companies will instead choose to use their retail spaces as places to showcase their e-commerce merchandise, giving shoppers the option to ‘try it before they buy it’!

The Bottom Line

The bottom line is that retail space in Baton Rouge is not dead…it’s simply getting a facelift.  As long as we continue to change with the shifting retail model, businesses big and small will find a way to thrive.

Looking for Commercial Real Estate in Baton Rouge or the Surrounding Area?

If you’re looking for any type of commercial real estate in Baton Rouge or the surrounding area, SVN | Graham, Langlois, & Legendre, LLC should be your first stop.  Whether you’re a buyer, seller, lessee, or lessor, we know we’ve got what it takes to pair you with the perfect property that will adequately suit your needs.  Take a look through our database of available properties today and reach out to one of our team members to start looking!