SEPTEMBER 27, 2012
The news went out yesterday morning: Office supply giant Staples, faced with declining retail sales, will have to shrink its physical square footage by 15 percent as part of an overall reorganization plan. What’s to blame for the company’s woes?
“The No. 1 reason for softness in this business is the iPad,” retail analyst Gary Balter told The Wall Street Journal. “Look at how much less we print today.”
The iPad. Along with email and cloud-based data sharing, it’s moving the world away from stacks of paper and everything needed to manage them: filing cabinets, folders, printers, cartridges, binders, highlighters, labels, sticky notes, clips, legal pads. That’s too bad for office supply chains, which are downsizing to adapt to consumer habits. But it’s great news for cities: smaller, more convenience-focused stores will fit better in urban spaces, fleshing out neighborhood corridors rather than forcing people to drive to faraway shopping centers.
It’s just one way the mobile revolution is changing the shape of cities for the better.
The broader big box assault on the urban core—witness multi-story Targets and mixed-use Walmarts popping up in neighborhoods all over the country—has lots of reasons behind it. Primarily, mega-retailers have simply saturated suburban markets, and are looking to tap into America’s resurgent metropolitan wealth. But even if the more diversified companies aren’t as threatened as Staples by the obsolescence of whole product lines, the growth of online shopping allows them to stock only the items that people need to touch and feel before buying, or might need to pick up on the spur of the moment. The resulting smaller boxes can more easily be shoehorned into cities, where Supercenter-sized spaces are nearly impossible to find.
The more fundamental power of mobile computing, however, is reversing the trend that sent shoppers from Main Streets out to the interstates back in the 1960s: the rise of the personal automobile. A few weeks ago at a techie conference in San Francisco, Google Ventures’ Joe Kraus made a bold prediction. “In five to ten years, the smartphone will replace the car,” he pronounced, eliciting some quizzical looks.
Personal cars will become less necessary, he explained, as apps allow us to call cabs, hitch a ride, share bikes, navigate public transit, and get stuff delivered to our homes—or lockers in drugstores. On an even more profound cultural level, smartphones are also supplanting cars in the minds of young people as a rite of passage and the path to freedom.
Big box retailers, then, are just adapting to survive in the new normal. That’s terrified some small businesses, many of which have also suffered as their customers migrate online. But they needn’t be the mom-and-pop-destroying monsters of decades past. If cities demand decent design for those incoming superstores—with minimal surface parking, activated street fronts, and community gathering spaces—they’ll keep people from going to the suburbs to shop, and send more traffic to nearby businesses that offer something unique. (That’s the potential embodied by a handful of recession-stalled projects in Washington D.C.: Signing leases with Walmart allowed them to move forward, and other businesses will likely cluster where few before could survive.)
Smartphones could help small businesses in another way: Gadgets are a lot cheaper than vehicles, freeing up more disposable income for clothing boutiques and pet stores. And with all the free marketing tools available online, the cost of getting your name out to consumers is lower than ever. All that makes urban economies the big winners in the mobile revolution—even if Staples has to figure out something new to sell.