21.08.2018 20:50:00

Orange County Business Council Study Reveals Unique Challenges, Opportunities Await Orange County As E-Commerce Transforms the Region's Retail Industry

IRVINE, Calif., Aug. 21, 2018 /PRNewswire/ -- Orange County — whose bucolic post-War bedroom communities and trend-setting malls and neighborhood shopping centers have been the subject of worldwide study and emulation for the last half century — is on the cusp of a new economic era thanks to an unrelenting e-commerce revolution that's dramatically transforming the region's retail landscape.

OCBC Research Report: Inside Orange County's Retail E-volution

That's the conclusion of Inside Orange County's Retail E-volution, a groundbreaking research report released today by Orange County Business Council that examines the spreading e-commerce revolution's effects on the region's retail sector, land use practices, workforce composition and sales tax base.

"Growing consumer preferences for e-commerce shopping over traditional brick-and-mortar stores are fundamentally transforming both the national and local retail sector with potentially far-reaching impacts, and are creating new opportunities at the same time," said Dr. Wallace Walrod, OCBC Chief Economic Advisor and research team leader for the comprehensive study.

"This is a comprehensive research study with a lot of implications," said Lucy Dunn, OCBC president and CEO. "It is an enormously insightful deep dive into the many ways the e-commerce age is reshaping Orange County's economy and how the county must adapt to preserve its economy and quality of life."

The Catalysts of Change

Citing the closure in 2017 of nearly 7,100 brick-and-mortar stores nationwide – the most ever in a single year - and the vacating of a record 105 million square feet of retail space in 2017, the study identifies a trio of catalysts leading the reshaping of the nation's – and Orange County's retail sector:

  • Computers, the internet, smart phones and other technology have created completely new business models that have almost completely superseded older models, such as digital media services replacing brick-and-mortar music and video rental stores.
  • The preferences of new generations of younger consumers are fundamentally altering the retail environment. Millennials are leading the change, preferring "experiences" in public spaces than products in stores.
  • After more than 60 years of nearly unbridled development of shopping malls and neighborhood centers, the U.S. is oversaturated with physical retail space. Indeed, the U.S. has between 2.5 to 5 times more retail space per capita than Australia, France, German, United Kingdom and China.

Profound Impacts on Orange County

Over the last nearly 70 years, Orange County shed its agrarian roots to become quintessential suburbia with its sprawling bedroom communities and convenient neighborhood shopping centers. The post-War era also saw Orange County emerge as ground zero for the advent of the regional shopping mall with the development of South Coast Plaza, Fashion Island, Fashion Square and others.

But that paradigm is stepping aside for a new reality that could dramatically impact Orange County in several ways:

  • As one of Orange County's most important job sources, the retail sector's evolution could have a profound impact on the county's workforce. In 2017, Orange County's retail sector employed approximately 152,000 people – about 10 percent of the county's workforce – and produced $21.2 billion in revenue. E-commerce related job losses due to automation and other factors could mean material reductions in entry-level job opportunities in the retail sector.
  • In the wake of Proposition 13, cities and counties "fiscalized" land use by re-orienting their tax bases toward retail sales. Now, that strategy may have run its course. As e-commerce continues its march across the retail landscape, city and county governments up and down the state are facing still-unanswered questions about e-commerce impacts on sales tax revenues. In Orange County, sales-tax dependent cities are wrestling with the potential implications of e-commerce on their General Fund revenues. For example, sales tax accounts for 72.9 percent of La Habra's General Fund revenue, 47.2 percent of Costa Mesa's, and 43.9 percent of Rancho Santa Margarita's.
  • With premium shopping and entertainment venues such as Fashion Island, South Coast Plaza, and Downtown Disney, Orange County's retail sector is widely recognized as a cornerstone of the county's reputation as a world-class tourist destination. How well these retail destinations adapt to the tides of e-commerce and shifting consumer preferences for "experiences" will determine the broader success of the county's retail sector in this new era.

Opportunities to Repurpose and Reshape Orange County's Economy

The study shows facets of Orange County's economy are already adapting to the shifting paradigms of e-commerce and identifies important new opportunities to repurposes land to meet other county needs.

The study concludes:

  • Older traditional commercial/retail centers could present opportunities to repurpose Orange County land-uses to those that are more efficient and productive in this new era.
  • While Orange County's supply of vacant land is very low (approximately 0.5 percent of the county's total acreage), results show that several thousand acres of commercial or retail zoned properties (as much as 10.5 percent of the county's total land area) are potentially good candidates for repurposing to other uses, including residential development.
  • Commercial and retail land has more than five times the infill and refill potential of other land-use types.
  • A majority of existing retail structures on potential infill or refill parcels in Orange County date were built in the 1960s, 70s and 80s.
  • The GIS methodology developed by OCBC and SCAG's GIS to identify and categorize land parcels as potential "infill" or "refill" can be used by cities and developers to identify and evaluate new uses for infill and refill parcels ripe for repurposing

The 15-month study and subsequent 152-page report was commissioned by Orange County Business Council, with underwriting provided by Union Bank, Brookfield Residential, FivePoint, Irvine Company, Majestic Realty Co., the Southern California Association of Governments, Bank of America, Building Industry Association – Orange County, The Orange County Register and Hoag.

Inside Orange County's Retail E-volution is available online at www.ocbc.org/retail-study-book/OCBC_Retail_Study_Book_Final.pdf

About OCBC
Orange County Business Council is the leading voice of business in Orange County, California. OCBC represents and promotes the business community, working with government and academia, to enhance Orange County's economic development and prosperity in order to preserve a high quality of life. OCBC serves member and investor businesses with nearly 250,000 employees and 2,000,000 worldwide. In providing a proactive forum for business and supporting organizations, OCBC helps assure the financial growth of America's sixth largest county. For more information, visit www.ocbc.org.

CONTACT: Byron de Arakal
949.794.7210
bdearakal@ocbc.org

 

Orange County Business Council Logo

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/orange-county-business-council-study-reveals-unique-challenges-opportunities-await-orange-county-as-e-commerce-transforms-the-regions-retail-industry-300700430.html

SOURCE Orange County Business Council

Eintrag hinzufügen
Hinweis: Sie möchten dieses Wertpapier günstig handeln? Sparen Sie sich unnötige Gebühren! Bei finanzen.net Brokerage handeln Sie Ihre Wertpapiere für nur 5 Euro Orderprovision* pro Trade? Hier informieren!
Es ist ein Fehler aufgetreten!