As chief economist at Colliers International (USA), Andrew Nelson is well versed in economic and market perspectives. He joined Colliers this past January, and in his new role, he not only provides strategic counsel to clients, but also drives the company's research agenda, providing thought leadership and guidance surrounding trends in commercial real estate, capital markets and investments—heady topics to be sure.

Prior to joining Colliers, Nelson was director of research and strategy at Deutsche Asset & Wealth Management (formerly known as RREEF) and served as the company's retail sector and sustainability specialist—bringing lots of retail cred to his new post, as well.

So, in lieu of offering up eloquent musings on popular economic theories, such as quantitative easing and game theory— even headier topics—it's only fitting that Nelson weighs in on the impact of e-commerce on retail markets.

We've been hearing about the e-commerce threat to retail for so long now. What's your take?

As with many economic issues, there's more than just one story here, and the impacts vary across the retail sector. Some segments are getting devastated while others are barely touched. But the threat is undoubtedly rising overall.

How much has e-commerce grown in the past decade or so?

It should come as no surprise that e-commerce is growing rapidly, both absolutely and relative to bricks and mortar stores. E-commerce sales are up more than 17-fold since 1999, compared to only 64 percent for retail sales overall. Currently, e-commerce is growing at least five times faster than in-store retail.

What are some of the most popular e-commerce markets today?

What people tend to buy online are books, phones, clothing and other specialty goods. In fact, just three core retail categories—electronics, apparel and hobbies—make up more than half of all e-commerce sales. These sectors are also the fastest growing—up almost 80 percent in the five years through 2012 (latest complete data available).

Conversely, there are several important retail categories that people just don't buy online, such as groceries, personal care items and cars—at least not yet. In fact, a new study by PricewaterhouseCoopers found that only 1 percent of consumers said online shopping is their primary avenue for purchasing groceries. And these categories are hardly growing at all.

How do these shopping trends impact retail property markets?

The overall e-commerce share of retail spending is still less than 7 percent, but that figure is deceiving because it includes the categories like groceries that people just don't buy online, at least in the U.S. But if you focus just on the core segments more amenable to online shopping, the e-commerce share shoots up to 20 percent. Put another way, one-fifth of items that would have been sold in a mall or power center a decade or so ago are now being sold online. Additionally, many of these items were among the highest volume and highest profit categories for retailers. The "channel shift" of these profitable sales helps to explain why so many shopping centers are struggling across the country.

Are there other impacts from e-commerce on the retail landscape?

Sure: peer-to-peer commerce and smartphones. First, the diversion of sales to online non-retailers via peer-to-peer selling—such as Craigslist—ultimately reduces the need for both stores and online retailers—a double whammy, to be sure.

Launched as an e-mail list in 1995, Craigslist posts 40 million new classified ads per month. How many of those transactions might have otherwise occurred in brick-and-mortar stores? In a sense, Craigslist is just a modern update of garage sales and flea markets. The difference is that technology is dramatically increasing our ability to connect potential buyers and sellers and thereby reducing what economists call transaction costs. This ultimately facilitates much greater levels of peer-to-peer sales.

And what's the threat from smartphones?

Smartphones are the ultimate retail killer. Not only can you conduct commerce directly from your phone from anywhere you happen to be if there's a Wi-Fi connection, but smartphones are replacing billions of dollars of retail sales and services.

Think about all the items you used to buy in a store that have been replaced by your pocket-size device: newspapers, cameras, flashlights, maps, music, movies, clocks, watches, games, calculators, even answering machines The list goes on and on. And all for free or the cost of an app of streaming service.

So it's not just that online retailers are capturing sales that formerly were transacted in stores and shopping centers. Consumers are bypassing retailers altogether through peer-to-peer transactions, while smartphones and iPads are replacing many former categories of retail goods and services. And we haven't even mentioned what 3-D printing might do in the future.

Does that mean that shopping malls as we know them are headed for extinction?

Of course not. Shopping centers and retail districts are more than just places of commerce. They've served as social crossroads since before Roman times, through 18th-century London to the 1970s mall to today's high-street retail. No one should seriously argue that physical retailing will disappear. But clearly there are major changes looming in the retail sector, so retailers and shopping centers must adapt or die.

What are some strategies retailers should embrace going forward?

There are many ways that stores can compete better with online retailers. Rather than stocking every size in every color, stores can carry a more representative sample that provides shoppers with the look and feel of the product, and then send the exact desired item to their home. The shopper gets the right item while the retailer can carry less stock and ultimately downsize the store.

And stores and shopping centers/districts must leverage what they do best by creating a memorable shopping experience. More retailers are offering in-store eating, while shopping centers are adding more restaurants and other entertainment. Playing up the social aspects of shopping makes the outing more fun and keeps customers shopping longer.