Left: mini-warehouse with a computer monitor and metal warehouse shelves in an old retail space / Right: traditional retail space occupied by a jewelry store. Location: 10th St. and 1st Avenue / East Village / New York City
A new trend in retail is vacant shops in urban neighborhoods being converted to small warehouses. In the East Village on 10th Street, we see on the left the new warehouse model; on the right we see a traditional retailer. For the ‘store’ on the left, the customer orders via their mobile phone and then does a pickup or gets a delivery.
I’m seeing more of these ‘zombie stores’ around the city. Just in the East Village, I’ve seen four: the old FedEx-Kinkos on Astor Place is now a warehouse, a storefront on Second Avenue was converted to a JOKR warehouse, there’s another warehouse at Third Avenue and 13th St., and then there is the one shown here on 10th St. One can spot these warehouses because their store windows are either covered with brown paper or one can see an ugly warehouse inside.
One may reply that these warehouses may just be local businesses updating their business model for 21st century. To pursue that line of thinking, let’s check out the businesses on that sign: Uber, DoorDash, Postmates, and Grubhub. Those are all: billion dollar companies that are headquartered in San Francisco with back offices in Bangalore yet legally exist as shell company in Delaware. Ask the jewelry store next door if that’s his business setup and I’d bet not. This isn’t a story about small retail shops becoming small warehouses run by local business owners. These are small retail shops becoming small warehouses run by: distant, deep-pocketed software billionaires.
Remember 20 years ago when some people thought that Amazon was just going to hurt bookshops. Initially, these warehouses are delivering and selling groceries—but their plan is likely to sell anything and everything. Initially, they may deliver a local ice cream shop’s goods, such as from Van Leeuwan, but their goal is to sell and deliver the goods, just like Amazon does with its Basics private label goods. Amazon makes the item, sells the item, and ships the item. If that sounds abusive, you’re right: that’s called vertical integration, often leads to monopolies, and it’s what got Standard Oil in monopoly trouble.
Amazon hurts local retailers, but it often locates its warehouses in rural areas. These zombie warehouses bring Amazon’s digital decay and on top of that ruin a neighborhood’s storefront space. I don’t think that people moved to the East Village to be surrounded by warehouses. Yet, some
people who live in the East Village are responsible for this trend. These warehouses are locating near their customers. Customers ‘shop’ there because of quick delivery and low prices. And this brings up another side effect: these warehouses put downward price pressure on surrounding local retailers. (A can of Coke may cost less there vs. at the bodega.) This leads us to ask: who is supporting these warehouses—and do they realize the true costs?