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Worcester Business Journal
October 2021

The changing face of retail is having a profound impact on Massachusetts’ real estate and development landscape.

Online shopping has been on the up-and-up ever since retail giants like Amazon burst onto the scene, taking a larger bite out of retail sales every year.

The coronavirus pandemic accelerated e-commerce sales across Massachusetts, with a 34% jump during the first nine months of the pandemic, according to a report from the Boston-based Metropolitan Area Planning Council. By February 2021, online shopping made up 14% of total retail sales in the state.

Yet, these shifts don’t seem to spell out a death sentence for brick-and-mortar retailers, rather a resounding message to adapt to changing consumer demands.

The Omnichannel

Compared with other countries, the United States has an exorbitant amount of retail space with an estimated 25 square feet of retail per person, said Todd Alexander, an executive vice president specializing in retail at Worcester commercial real estate agency Kelleher & Sadowsky Associates.

“We’ve over-built over the years, so we’ve seen repositioning going on and retail evolving much more over the last few years,” he said.

Almost 14 million square feet of retail space has been converted to industrial space over the past three years nationwide, according to a 2020 report from Dallas real estate firm CBRE Group.

This change is evidenced in local development projects like Reliant Medical Group’s move to a shopping center in Westborough in 2017, and this year’s redevelopment of Worcester’s Greendale Mall, which is set to become an Amazon distribution center.

Of the 34 Amazon facilities in operation or planned in the state, 11 are located in Central Massachusetts, and all of them have cropped up within the last seven years, according to the MAPC report.

“It’s a great opportunity for retail conversion because most of these retail centers were really conveniently located,” said Alexander. “When you convert them to commerce distribution centers and you’ve got that network of roadways that are already in place, it makes it easy to convert.”

E-commerce giant Amazon will open a brick-and-mortar 4-star store in the Shoppes at Blackstone Valley in Millbury.

The increase in such developments has blurred the line between online and in-person retail, as well. While brick-and-mortar businesses built out online presences during the pandemic, online retailers have been moving in the other direction.

This reflects a surge in omnichannel shopping, which means all types of customer interactions including online shopping and in-person methods, like curbside pick-up. Nearly 22% of online orders in the U.S. were filled using omnichannel methods in 2020, a 14-percentage point increase from five years ago, according to a report from Canadian real estate company Colliers International.

Amazon announced plans in August to open a 4-star retail store in the Shoppes at Blackstone Valley in Millbury and is set to open an Amazon Fresh grocery store in Westborough.

By Katherine Hamilton