Huge distribution centers in California show shift to on-line home delivery and away from malls

When Amazon conceded on collecting tax on sales to people in California in 2012 they gained a phenomenal advantage – they could finally open up distribution centers in the state.

Previously, they didn’t have any warehouses in California. Now there is one in San Bernardino, at the eastern edge of the huge Los Angeles metropolitan area. There are others further north.

What can they do now? Have next day delivery. Do you suppose they will move toward same day delivery? Can you picture the bold type comment “Order in the next 2 hours for delivery today” on the screen as you shop early in the day?

I’ve noticed a drop in the delivery time when ordering at Amazon. I’m still seeing a lot of stuff is from the Las Vegas warehouse, but a growing portion of it is from San Bernardino.

Bruce Oksol has a long article on this issue, Something Afoot?, at his blog Million Dollar Way. He focuses mainly on the Bakken oil boom in North Dakota, so I pay close attention to his blog. If you read my blog often for energy issues, you’ll want to check out his place.

The post I just linked goes into detail on Amazon opening a distribution center followed quickly by lots of other retailers.

This is part of a huge shift away from big malls towards on-line shopping. That will require lots of new distribution centers – Mr. Oksol’s article discusses the amount of new construction underway in the LA area.

It also involves the decline of traditional malls – If I correctly read the quote he provides, only one new mall has been built in the US since 2006. The new terms in the mall industry are “greyfield” and “dead mall”. I’ve not heard those phrases, but they instantly make sense. There’s two near where I live that seem to fit, one in Montclair and one further west in Covina. I’ve noticed that a huge outlet mall very close to where I live usually has 2 or 5 empty spaces the occasional times I visit.

He labels the tipping point for that huge change – Amazon starting to collect sales tax in California.

Check out the article for a great discussion on the big shift in our economy.

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