Nov 21, 2018

Axios Future

By Bryan Walsh
Bryan Walsh

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1 big thing: Living in a mall

Illustration: Rebecca Zisser/Axios

COLUMBUS, Ohio — The inventor of the open-air mall has a new idea — the mall that you never leave.

Axios' Erica Pandey reports: Yaromir Steiner is trying out his newest brainchild here in Columbus — a town-in-a-mall with 700 apartments, along with almost any sort of shop that might strike you. Working against him this time, though, is a national wave of millennials moving into cities, not suburbia — not to mention the burning question: Are there really 700 Columbians dying to live in a mall?

  • Steiner is convinced that he and his co-developers are on to something a real town where you can live, work, shop for groceries, go out to eat, go to clubs on Saturday nights, and so on.
  • What makes him so confident: For decades, marketers have treated Columbus as a testbed of new products, as its population is a close microcosm of the country. And, after 20 years in Columbus retail, Steiner thinks he knows what will work and what won't.
  • He tells Axios that he is spending $500 million on the bet.

The backdrop: Many U.S. malls are failing — as of last year, there were about 1,200, and analysts say perhaps a quarter will close over the next four or so years.

But, but, but: Steiner's vision is to beef up Columbus' already-sprawling Easton Town Center, which is among the U.S. malls that still thrive, as brick-and-mortar retail continues to account for some 90% of U.S. retail spending.

By the numbers: Steiner co-developed Easton starting two decades ago on a 90-acre spread of land. It already contains a dizzying 240 stores. In addition to new apartments, Easton developers are adding a new hotel and 16 more acres of retail and office space.

  • Not everyone thinks he is right. "I've never heard anyone, when they're shopping for houses, who says, 'Easton.' It strikes me as completely odd to live there," says Bart Elmore, a professor at Ohio State University and a Columbus resident.
  • But Steiner is sticking to his plan. “People love it here," he says. "Soon we’ll have our Christmas tree lighting, and it’s a big Columbus event now.”

The mall is built around walkable squares and main streets, instead of in a big concrete box.

  • Easton has mall staples like Nordstrom and J. Crew, but also a comedy club and a futuristic pod called "Shop Lab," a concept launched a month ago where online-only brands try out physical retail.
  • Dining options include food court favorites like Five Guys and Sbarro as well as five-star restaurants run by famous Columbus chefs.

Steiner says that neither the e-commerce juggernaut nor the mall implosion daunt him.

"Easton was set up for the e-commerce future 20 years ago. We are online proof."
— Yaromir Steiner
2. The weird new soybean route
Expand chart
Data: Descartes Labs; Map: Harry Stevens/Axios

China has all but stopped buying American soybeans, which — in a circuitous new global legume market — are now going to South America, when they are not being thrown into storage in wait of an end to the trade war.

  • Axios' Kaveh Waddell writes: U.S. soybean exports to China are down 98% in 2018, the result of the escalating U.S.-Chinese tension.

The big picture: With the reduced Chinese demand, the U.S. has begun exporting soybeans to Brazil and Argentina in larger volumes.

  • Those countries, which produce lots of soybeans themselves, have been using the imported soy for domestic products like oil and soymeal. In turn, they export their homegrown soybeans to China, said Farzad Taheripour, a professor of agricultural economics at Purdue University.
  • The shift was captured in an analysis of changing shipping routes, shown above. Descartes Labs, a company that analyzes information from satellite imaging and other sensors around the world, found that grain-carrying ships began cutting a new, direct route from the U.S. to Argentina in recent months.
  • "This is what you see when you institute tariffs that really mess up the system," said Matt Witte, a commodities expert at Descartes. "You do things like ship soybeans to a country that already produces a lot of them."

The uptick in Argentina’s soy imports is relatively modest for now, said Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri.

  • It’s been driven partly by tariffs, but also by a soybean shortage in Argentina due to a bad harvest. If it were not for the shortage, Argentina would have even more soybeans to export to China.
  • The U.S. government expects this dynamic to continue into next year, even though Argentina is likely to harvest more soybeans in 2019, Westhoff said.

The bottom line: This detour hurts the American soybean industry, said Taheripour. "Our farmers will receive a lower price for their products."

3. What you may have missed

Photo: David Ramos/Getty

If you were thinking only of the coming holiday and not the news, stop fretting — here are the top Future stories for the week.

1. Forecasters and historians: Searching the past for clues to the future

2. New U.S. export controls: Seeking to contain Chinese tech

3. Redividing the world in two: The coming American and Chinese cantons

4. Worthy of your time

Illustration: Aïda Amer/Axios

A flowchart dummy's guide to AI (Karen Hao — MIT Tech Review)

Driverless cars save fewer lives than expected (Alison Snyder, Joann Muller — Axios)

Buying Amazon on Amazon (John Herrman — NYT)

$17 toothpaste (Amanda Mull — The Atlantic)

Middle-income Silicon Valley wages shrank (Louise Auerhahn et al. — Working Partnerships)

5. 1 windfall thing: Black Friday deals

Amazon pop-up in Milan. Photo: Mairo Cinquetti/NurPhoto/Getty

For many traditional retailers, 2018 was another tough year. Sears and Toys "R" Us went bankrupt, and the market punished Macy's and Target for sales that were strong, but not strong enough.

Erica writes: But two days from now, Black Friday will kick off the holiday shopping season — a nationwide, monthlong spending spree that analysts say may pull some of the companies out of hot water.

  • As the day closes in, online and brick-and-mortar retailers are preparing for war on the battlegrounds of shipping prices and holiday deals.

The big picture: Americans will spend an average of $1,007 each this holiday season, per the National Retail Federation. That's a 4.1% jump from last year, which is why analysts are signaling a long-awaited good season for beaten-down retailers.

  • The steepest Black Friday discounts will be for electronics, per Adobe Digital Insights. Computers will sell for an average of 16% off; tablets, 33%; televisions, 22%. Business Insider reports that the Apple Watch will sell for up to $80 off at Target and Macy's.
  • Toys have emerged as key competitive soil this season, as retailers rush to fill the void left by Toys "R" Us. Amazon and eBay have produced toy catalogs, Walmart has launched a "toy lab" that uses augmented reality to let kids test toys, and Target is clearing floor space for inventory.

Top sellers: Per Adobe, the hottest toys are L.O.L. Surprise! dolls and Fingerlings and Little Live Pets stuffed animals. Among electronics, Amazon's Fire TV and Echo are already big sellers. The video game consoles Nintendo Switch, NES Classic and Xbox One X are also selling well.

Bryan Walsh