Amazon, Drones, and the Potential Impact on Retail Commercial Real Estate

pexels-photo-207586.jpegAmazon and other large online retailers have been impacting brick-and-mortar stores for years now. With the use of drones, Amazon is hoping to grab an even higher percentage of sales in the global market.

Will Amazon take over the world retail market by using drones to deliver packages to consumers and destroy the retail commercial real estate market in the process?

The idea is an optimistic one, and in reality using drones for package delivery comes with a number of realistic problems:

  • Drones can only deliver within a 10-mile radius
  • The Federal Aviation Commission would have to approve the use
  • Current battery life of drones is too short
  • Drones could accidentally enter unrestricted air space
  • People could use the drones for target practice
  • Drones are unable to fly in rain, sleet or snow

While drones are being used for limited use in military actions, the use of commercial drones in widespread package delivery is still only a discussion and not expected to heavily impact retail commercial real estate any time soon.

pexels-photo-264554.jpegPeople still want to shop in person, to choose items that they can touch and see. Brick and mortar stores have had to compete with online shopping for years now, and many have an online store in addition to their physical retail space. Retail commercial real estate will still have a place in the market.

The use of online shopping has many benefits for consumers, but the benefits of going to a physical store can't be overlooked either. Many people enjoy shopping, getting out of the house, and spending time around other people. You don't get this same interaction with people shopping on the internet, and this is a huge reason people will continue to shop in stores and not just online.

Employing drones for the delivery of consumer goods is futuristic, and at this time isn't very practical. Retail commercial real estate practices will still be necessary. The idea is that drones can deliver to remote areas and to people who don't have good road access. With a 10-mile maximum radius, drones aren't going to be able to reach remote areas and the only people that will benefit from drone delivery are those that already have considerable access to goods.

Retail commercial real estate stores are still the way to go when thinking about opening up a new business. Consumers like to see what they are purchasing, and they like to try on clothes and shoes to see if they fit before getting them home.

A good retail store can also sell online, and the products for sale can be stored within the walls of the retail space. To sell online, you still need a place to store, package and ship items. You might as well have an accessible retail space for customers to come check out what you have for sale.

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