As Customers Move Online, So Does the Holiday Shopping Season

Empty stores are turning into fulfillment centers and the market for warehouse space is booming, as the pandemic rockets the retail industry into its e-commerce future.

The holidays will look different at Macy’s this year. The Thanksgiving Day parade will proceed without spectators, and Santa Claus will not be reviewing Christmas wish lists from his usual perch on 34th Street.

But while many of those traditions are likely to return once the threat of the coronavirus passes, other changes at Macy’s this holiday shopping season — which traditionally begins with Thanksgiving — signal how the company’s business, and that of the entire retail industry, may be altered forever by the pandemic.

Early last month, two Macy’s stores, in Delaware and Colorado, went “dark,” meaning employees are primarily using the spaces as fulfillment centers where they process online orders and returns rather than a place for customers to browse and shop.

Jeff Gennette, Macy’s chief executive, said the dark stores are part of an experiment as the company responds to customers buying more online and demanding ever-faster shipping for free. But the conversion of a department store into a fulfillment center, even temporarily, reflects how retailers are succumbing to the dominance of e-commerce and scrambling to salvage increasingly irrelevant physical shopping space.

In Red Hook, on the Brooklyn waterfront, work crews are building what will become one of the tallest warehouses on the East Coast: a three-story building with parking spaces trucks and “sprinter vans” to deliver goods across New York in less than a day.

“I have been doing this for 30 years, and it is the best year we’ve ever had,” said Robert Kossar, head of industrial real estate for the Northeast at JLL, a real estate services company. “We certainly don’t see any signs of it slowing down.”

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