Retail property in the age of digital Darwinism : Assessing the impact of e-commerce on New Zealand shopping centres : A dissertation submitted in partial fulfilment of the requirements for the degree of Master of Property Studies at Lincoln University

Abstract

The aim of this dissertation is to assess the impact of e-commerce on New Zealand shopping centres. Research will involve both a literature review and a structured survey interview and will focus on ecommerce, how it may impact retailers, and consequently how it may impact shopping centres. The 1990' s have been described as the age of digital Darwinism with the advent of e-commerce and the realisation that it will alter the way society communicates and does business. Charles Robert Darwin's 1858 presentation of his theory of evolution by natural selection to the Linnean Society stated: "It is not the strongest or most intelligent who survive, it is those who are most responsive to change" Paraphrasing Darwin's theory, the introduction of e-commerce can be considered a significant environmental event that retailers and shopping centres must respond to. Accordingly, only those retailers (and by extension shopping centres), which respond and adapt to an e-commerce enabled world will survive. As e-commerce is considered as having a significant impact on the way society communicates and does business, research on its impact on New Zealand shopping centres is important, given the considerable investment has been made in New Zealand shopping centres. The twenty shopping centres that comprise the New Zealand Property Council's Retail Index are alone valued at approximately one billion New Zealand dollars. Accordingly, any impacts on shopping centres long-term cashflows and capital value as a result of e-commerce could have significant consequences on the New Zealand property markets. To protect that investment, retail property investors and managers need to understand, assess and respond to the impacts that e-commerce could have on shopping centres. Only after research is undertaken can retail property investors and managers properly respond to the potential impacts of e-commerce. Accordingly, research assessing the impact of e-commerce on New Zealand shopping centres would be of value to retail property investors, promoters and managers as well as to the wider business and investment community. Research will focus primarily on internet retailing as it is the e-commerce activity most impacting the retail sector and could have a profound impact on New Zealanders shopping habits and upon retailing trends. As the retail sector is the predominant tenant base for shopping centres, any adverse internet retailing impacts on retailers will also impact upon shopping centres. If retailers can access and sell their goods and services to consumers over the internet instead of through shopping centres, what impact will this have on shopping centres? This has led to the perception that internet retailing could challenge the sustainability of the bricks and mortar retail business model (which uses retail property) and the assumption that you need to be physically located where the consumers are (in a retail property) in order to retail goods and services. In Darwinian terms, will shopping centres respond, evolve and survive or become extinct as a result of e-commerce?