EC Commercial Real Estate: The King Kong Of Category Killers

Kings are threaded through time, from all incarnations, realms, and mediums. Some are real, others imagined. There are great ones from literature, such as the tragic Lear and the legendary Arthur, to name but two of a multitude. The great, or not so great, of recorded history may inspire or fascinate as does King Henry VIII with his notoriously insatiable appetites. In Egypt the king was pharaoh with the most famous of these, Tutankhamun, discovered in 1922, and very unroyally immortalized in pop culture by one of comedy’s most irreverent kings, Steve Martin.

The silver screen too has its kings, and one of those is surely that enormous silver back, regally sporting a remake crown on his massive head. Debuting in 1933, King Kong featured primitive animation and an ape doomed to never get the girl. The public was hooked, and with ever more sophisticated technology, Hollywood would remake this winner six more times. Borrowing from modern vernacular, you might call Kong what he is, a colossal cinematographic category killer.

Sadly, Kong couldn’t win, but he did make scaling the Empire State Building look like child’s play, as he battled annoying aircraft and tenaciously guarded his shrieking starlet prize. Some might even say the ill-fated ape was Amazonian in his feats.

Few would dare dispute that a different kind of Amazon reigns supreme, lording over the retail realm, growing its kingdom by killing one category after another. In the event you are unfamiliar with the term, ‘category killer,’ it refers to a company, service or brand that has such a unique advantage that it makes it nearly impossible for competitors to operate profitably.

Amazon long ago killed off legions of book vendors and electronics retailers. Most recently, though, it’s left the entire commercial real estate (CRE) sector feeling as if it too is under siege. Such is the depth of the carnage in retail and its potential to spread to other areas of the commercial landscape.

Think of the burgeoning situation of the sum of the parts overwhelming the system. For a time, the notion of malls crushing the CRE space was unfathomable. The initial debate centered around which malls would emerge as ‘winners,’ and which would be retrofitted, and into what would they be reincarnated.

Followers of CRE quickly learned to distinguish between the top ‘A’, middle ‘B’ and bottom tier ‘C’ malls. There was also a ‘D’ category, which gallows humor quickly branded ‘death malls.’ The Reader’s Digest version of what was to come consisted of predictions that a choice few of the swankiest outfits surviving while the rest were left to rot and eventually die off, or as mentioned, come back in another form.

Innovative incarnation ideas include indoor sports venues, charter schools, residential communities, movie production studios, and the king of irony, fulfillment centers for online vendors. (What better way to be closer to city centers at deeply discounted rates after you’ve killed off the occupants?)

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Robert Kientz 4 years ago Contributor's comment

Brilliant article. The only reasons to buy local (and not online) are a) niche or premium products not available online and b) convenience of I need it now. Walmart's neighborhood store concept should continue to thrive because Amazon cannot capture those who need milk for their kids for dinner tonight, not two days later. However with Amazon same-day delivery model being rolled out to a city near you, it won't stop them from trying. Eventually Amazon drones delivering goods direct to home will blot the skies of America.