Question of the week #31
Based on your retail experience, what do you envision as the future for the indoor shopping mall
When I grew up there were a few malls that we frequented; the Montgomery Mall and Tysons Corner. Each had their respective anchor store and then of course all the chains in between. These malls were made for American expansion not for Mom and Pop stores. The malls exploded in the 70's. I remember when I was working in the garment center and the Mall of America opened in Minnesota in 1992. The enormity of the whole thing was just insane with over 520 stores. Was that the height of the mall market?
The next level of consumer engagement in the shopping arena was the explosion of big bookstores. They brought people in to not only read and buy the books but have a cup of coffee, use their wireless access points and meet others. Those stores rode the wave up and down pretty quickly as Amazon encroached in their space. They also realized they were not selling books but becoming community centers. What was left were an array of coffee shos that popped up with the same functions that people really used when they went to the book stores. Certainly a lot less square footage was needed to make that work.
With the advent of the Internet the marketshare of many of the stores in these malls has diminished. Some have built an smart online platform while others have not. Selling on line might take away from the person walking into the store on a dailiy basis. In the past if you needed something you had to go to the store and buy it. Now you can just sit down at your computer or pull our your phone and make a purchase.
The knee jerk reaction to the indoor shopping mall is the same as the knee jerk reaction to the constant information flow we receive every day. The next generation and others who are changing their careers are making products that they are passion about be it pickles, chocolate or even becoming a cobbler. We are returning to our roots. What happens to the big stores when we begin to rent clothes, buy less and deliver all of our content to a computer or phone. What happens to the malls?
Real estate is still the key component to those malls. It is the developers who will start to be saavy as the leases end and so goes another store. The large brands will continue to want to have a brick and mortar stores but not as many. More than likely the stores will carry less inventory in the stores and there will be ability to try on a few items for size and have them delivered to your home that day from a warehouse. The stores will create reasons for people to come in and that does not mean having a sale. It could be a special conversation with a buyer or a designer. It could be a unique fashion show. It could be a class on how to use new gadgets. I am just making it up as I go along. I would assume many of the malls will be converted into indoor communities from apartments, commercial office space, new restaurants, carts with local items, perhaps live theater or endless tables of ping pong.
IMHO malls will be transformed into what people will want to engage with. Remember it is all about what the market wants. Some malls will remain empty but hopefully most of them will be converted into a place for communities and people to meet and greet vs shop and get crazed.