On the Level: A real estate column

When I was a boy, my Cioci Mary (cioci is Polish for aunt) would occasionally treat me to a trip downtown in the small city where I grew up. We’d get a burger at Pappas’ diner and then head to W.T. Grant’s and she’d buy me candy, a comic book and a small toy. I mist up a little just thinking about it now, more than 50 years later.

You think a child of today, decades hence, will recall his aunt buying him a pair of sneakers on her laptop as fondly?

“Man is by nature a social animal,” wrote Aristotle. “Anyone who either cannot lead the common life or is so self-sufficient as not to need to, and therefore does not partake of society, is either a beast or a god.”

Jeff Bezos, the CEO and founder of Amazon, is thought of in both of those terms. Brick-and-mortar retailers can’t be blamed for placing him in the role of villain, the guy who sends shoppers to their stores to paw their merchandise before pressing the buy button on their Amazon apps. But when all is said and done, Bezos’s bust will sit in the pantheon of retail legends alongside Rowland H. Macy and John Wanamaker.

Amazon’s stock has done nothing but rise despite the fact that the company only recently started posting quarterly gains (most of that thanks to its B2B cloud-sharing service). Bezos didn’t single-handedly corner internet retailing by accident. He did it by being a ruthless competitor and by reinvesting nearly all his gains back into customer experience.

His programming minions made algorithms that anticipate what customers like and immediately sells them more of it. Web shoppers like fast, cheap delivery, so when FedEx wasn’t getting the job done, Bezos started his own air freight business. Ever check out on Amazon? Click one button and the merchandise is on its way. Ever check out at Macy’s? I did, or tried to, last week. I could have read a novella waiting in line.

Amazon incents its sellers to march to the customer experience drum, too. In the Amazon Buy Box system, any seller, even one working out of his or her garage, can assume the top spot in an Amazon search listing. All any seller has to do is service customers really, really well. The Buy Box algorithm weighs positive reviews alongside price in assessing listing orders. That’s why you’ll often notice that the vendor with the lowest price is not always listed first. The vendor with the overall best customer experience is.

Now retailers and shopping center developers are being summoned by the clarion call of customer experience. It is a tough taskmaster. Town centers and lifestyle centers that offer up green spaces, amusements and events take up more real estate and require bigger investments. Retailers, as a result, pay higher rents. Jeff Bezos spent decades plowing most of his profits back into customer experience, and now his brick-and-mortar counterparts must pony up and do the same.

Yet physical retailers offer something Bezos can’t — places for people to congregate. No matter how easy and efficient the internet is, people have a primal need to be with other people. (Bezos knows this; that’s why he’s opening book stores.) If your stores and retail centers succeed at becoming their gathering places — the town squares and parks of a new generation — then brick-and-mortar retail will carve out a new place in society.

I have no less an authority to back me up on this than Aristotle. Bezos is good, but he’s no Aristotle. He’s no Cioci Mary, either.

You can follow Al on Twitter at @AlUrbanski or email him at [email protected].