b'6American Journal of Transportation ajot.comRetail 2021: Its all about distributionU.S.-China de-couplingExpect a resurgence in local shopping centers and a convergence of channels a big red herringBy Peter Buxbaum, AJOTBy Peter Buxbaum, AJOTFor all of the talk of the pandemic e-com- One of the downsides of the e-commerce merce boom, its far too soon to write off theboom was that it caused online systems andThenotionofde-cou- according to the 2020 China brick-and-mortar sector of the retail business.logistics networks to become overloaded. Oneplingtheeconomicrela- BusinessClimateSurvey Onthecontrary,brick-and-mortararelikelysurvey from Contentsquare, a software com- tionship between the UnitedReportfromtheAmerican toexperiencearesurgencein2021foronepany that markets a digital analytics platform,StatesandChinaissome- Chamber of Commerce.simple reason: people will want to get out ofshowedthatonly15%ofconsumerswerething of a red herring.Ifanything,Chinahas thehouseonceCOVID-19isfinallyunderhappy with their online shopping experiencesThemoreextremeele- become ever more indispens-controland retail establishments are one ofduring the pandemic. All of these data point tomentsoftheformerTrumpable to global supply chains. the places theyll be headed.ample growth opportunities for the survivingadministration may well haveChinese producers have sub-Retailersandimporterswillalsolikelybrick-and-mortar retailers to cement customerwanted to foment a rupture instantially upgraded their capa-continue to source heavily from China, despiterelationships with improved shopping experi- U.S.-China trade. The formerbilities, noted Robert Lewis, talk to the contrary. (See sidebar next column) ences and distribution schemes. president himself voiced thatco-founderofthethinktank Still, the pandemic will have left its markThe continuation of home-based work thatsentimentwhenhetoldFoxChinaGoingGlobal(CGG), ontheretailbusiness.Companiesthatwerestarted during the pandemic will have a coupleNews last May, We could cutbymovingfromproduct ailingbeforethevirushitdidnotsurvive.ofconsequences.SomeoutletslikeMacys,off the whole relationship. assembly into production of Stein Mart, Lord & Taylor, Century 21, andFoot Locker, and Nike are looking to switchThat was never going tomore sophisticated key com-Barneys New York are among the retailers thatfrommallstosmallershoppingcentersandhappen.Butifde-couplingponentswhichpreviously are now liquidating.communitylocations,leadingsomeanalystsmeansthatU.S.importerswere supplied from abroad.tobelievethatneighborhoodshoppingdis- see value in diversifying theirIn 2009, China performed e-c ommeRceG RoWths puRt tricts will grow, as workers continue to worksourcing,thatisaphenom- onlyassemblyworkforthe During the height of the COVID closures,more from home than from the office, evenenon that has been going onApple iPhone 3G, representing e-commercepackedsixyearsofgrowthafter the pandemic is over.foratleastadecade.Espe- 3.6% of total costs. By 2018, intosixmonths,effectivelya12%annualThesamephenomenonofhome-basedcially for importers sensitiveChina was also producing the increase,saidCraigJohnson,presidentofworkwillalsocauseheadachesforapparelto labor costs, workers wageprinted-circuitboard,battery Customer Growth Partners, a consulting andretailers, as employees continue to dress downhikes in China over the lastpack, and camera module for researchfirm.Butthatgrowthratewillnotfor work at homeand maybe for the officefewyearshasmadesourc- theiPhoneX,increasingits be sustainable. The numbers now show that,as well. McKinsey & Companys report, Theing from countries like Viet- share of the bill of materials to through 2020, 82.5% of retail sales still hap- State of Fashion 2021, predicts that, even withnam, Bangladesh, Cambodia,25% of the total.pened inside physical stores, a figure that iseffective control of the virus, global fashionthePhilippines,Indonesia,This, according to Lewis, expectedtodecreasetoonly78%by2023.sales will decline as much as 5% in 2021. IfMalaysia, and Pakistan moreis representative of the over-That means that, for the next few years, e-com- the pandemic drags on, the apparel industryattractive. Still, 83% of U.S.all trends for China manufac-merce will grow at around 2% per yeartwicewont return to 2019 levels until the end ofcompanieshavenoplanstoturing.Thiscomprehensive its expected pre-pandemic growth rate but well2023, according to the same report.relocatemanufacturingor(SERVINGcontinued on 10.0 in.below the level of the pandemic peak.(RETAILcontinued on page 9) sourcingoutsideofChina,page 9)First port8.0 in. of call.First tomarket. The Port of NY & NJ receives more first port of calls than any other U.S. EastCoast port. This first port of call status means unmatched speed to key inland markets and 46.3 million local consumers. Thats why, when it comes to speed to market, no other U.S. East Coast port comes close.Visit www.portnynj.com to learn more.The Port is a facility of The Port Authority of NY & NJ21PAM0003_A-PAPPort_Authority_PA 108 11523414 MCAmer. Journal of Transportation 205811 NewClose 1/28; Insert 2/8 01/26/21 12:40 PMMC4C Magazine Internal 1/01 of 1M. SchlachterK. SamankaA. LazoV. RobertsR. Strazzeri'