I hope everyone had a wonderful Thanksgiving holiday.
I appreciated having some extra time to reflect on the things I’m grateful for. I’m fortunate to have a happy and healthy family, to live in this amazing country and beautiful state, the opportunity to work with a talented and energetic team, and to enjoy the support of our economic development community. I am truly fortunate.
I’m not much of a shopper, but I did a little online shopping over the long weekend in preparation for the holidays; additionally, I patronized a few locally-owned establishments as part of “Small Business Saturday”. As you can imagine, I had two very different buying experiences. As I swiped, inserted my credit card, or one-clicked my way through stores and websites, I couldn’t help but think of the seismic shift occurring in retail and the way we consume. According to the Wall Street Journal, Black Friday is no longer the busiest shopping day of the year —in fact, this year it’s projected to be the third busiest behind the Saturday before Christmas and Cyber Monday. From that, we can conclude that procrastination and cyber dominate consumer behavior. :-) The shift to cyber has long affected economic development, brick and mortar businesses, government revenue, and land use patterns, and will continue to impact our daily lives for years to come.
We experienced the upside of cyber dominance in our project wins last year. As you know, we closed out the 2016-2017 FY with 6 million square feet of project real estate absorption — a high water mark for EDCUtah. Much of that was driven by two mega-projects: the UPS and Amazon projects in the Northwest Quadrant of Salt Lake City. Each of those projects will absorb nearly 1 million square feet of real estate. Given our proximity to major markets and our phenomenal transportation and logistics network, Utah will continue to see large distribution and fulfillment center projects in our pipeline.
At the local level, it will be interesting to watch our partners focus on more “experiential” based retail destinations in their development patterns. To attract consumers and counterbalance the convenience of cyber, retail establishments must now offer more than shopping to draw in customers. Farmington Station, City Creek Center, University Place and other developments are perfecting the formula by offering terrific entertainment, dining, office, and residential options as part of their product offering.
As much as the Amazon effect creates challenges for some businesses, it’s also an opportunity. Retailers may choose to have large, high-rent flagship stores, or they may find other sales methods that get their goods off of warehouse shelves and directly into a consumer’s hands. Amazon, eBay, and other online platforms create opportunities for small businesses that did not exist decades ago, but that require proprietors to exhibit technological and marketing savvy.
It’s an interesting time to be following all of this, but we’ve been watching it for years: first with the introduction of the regional mall, and then with the rise of big-box retailers. As much as we see a migration to Amazon, there’s also been a movement to support locally sourced goods, foods, and retailers. I’ll be excited to watch continued innovation and to see how these shifts in the marketplace change our daily lives, the cities we live in, and the products we create.