Remember when it was cool to hang out at the mall? Oftentimes we’d go just to walk around, window shop, and people watch, all while bonding with friends or relatives.
And although retail was always their central focus, we saw malls incorporate fancy theatres, restaurants, workout gyms, and food galleries during the 1980s, 90s, and early 2000s, attracting more visitors and enhancing their public relevance in the process.
The large shopping mall was almost like an indoor county fair.
And on evenings and weekends, there always seemed to be an interesting event or some form of entertainment taking place – or a host of quirky attention-grabbing gimmicks or exhibits that offered a temporary escape from the day-to-day minutia of life.
…. And all demographics partook in this interesting social gathering concept. People of every ethnicity, faith, and age group representing every economic category would congregate at the mall, making it arguably the most diverse piece of real estate in any given city or county.
The concept of the shopping mall, until a few years ago, seemed like it was destined to be trendy forever, like sex, food, and music.
But today, the shopping mall model, like landline phones 10-15 years ago, is undergoing a demotion of relevance in society.
No, the model won’t die completely anytime soon just as landline phones still serve a purpose in most businesses. But, like landline phone usage, shopping malls will be scaled back a lot and may assume a somewhat different role in the future.
Why shopping malls are dying
Comfort and time
Perhaps the shopping mall trend has seemingly run its course and is no longer suited well for the public’s changing priorities.
These days, people have less time to spend driving to and strolling through malls. Therefore, online shopping is an attractive alternative because folks can purchase almost anything via the internet and from the comfort of their home, and enjoy the convenience of receiving their order on their doorstep (or at a local distributor) within 24 hours.
Delivery trucks, particularly from Amazon, frequent my neighborhood all day, every day – and probably yours too.
Snowball effect from online shopping surge
Due to the popularity of online shopping and companies like Amazon, we’re seeing a snowball effect as it relates to the decline in malls.
The online shopping online surge has driven many giant retailers out of business or forced widespread closures in multiple locations. As a result, mall owners are not only losing their loyal, old school customer base that still frequented those retailers, they’re also suffering the loss of valuable rent money when those stores close and no one acquires the empty space.
Recently defunct U.S. retailers include but are not limited to Alexander’s, Montgomery Ward, Woolworth’s, Ames, Service Merchandise, Mervyn’s, Gottschalks, The Bon-Ton, and Shopko.
Sears and Kmart have closed almost all of their stores due to their declining sales. Other major department store chains such as Lord & Taylor, Nordstrom, Macy’s, and J.C. Penney have closed a portion of their stores.
Big Box Chains
In the US and Canada, newer “big box” chains (also referred to as “category killers”) such as Walmart, Target Corporation, and Best Buy have contributed mightily to the decline of the shopping mall concept.
Not only do they often serve as one-stop shops for consumers, they typically prefer purpose-built free-standing buildings over mall-anchor spaces.
21st-century retailing trends favor open-air lifestyle centers; which resemble elements of power centers, big box stores, and strip malls; and (most disruptively for storefronts) online shopping over indoor malls.
Hella Interesting Fact: 2007 marked the first time since the 1950s that no new malls were built in the United States
Because of the social restrictions implemented during the COVID-19 rife, people are not only learning to shop online, they are also finding new ways to watch movies and entertain themselves, increasing their reliance on outlets such as Netflix, Red Box, video games, social media, video chat, dating apps, and general texting.
People are also becoming acclimated with take-out meals and curbside pick-up, and are thus less enthusiastic about in-store visits.
… And most of the learned traits we’ve adopted during the pandemic are likely to remain long after it’s over.
So, what are the implications for shopping malls in the immediate future?https://www.youtube.com/embed/Q3qNvCvjo-w?feature=oembed
“The mall has been losing ground for a long time, now it’s losing ground faster.”Jan Kniffen, a current retail consultant and former exec at The May Department Stores (which was folded into Macy’s), told CNBC in June.
Prior to 2020, experts believed that about 33% of America’s malls would shut down by 2030. But now, Kniffen thinks that will happen by the end of 2021 due to the COVID-19 pandemic.
In June, a Coresight Research study projected that a record 25,000 store closures would be announced by the end of this year. And about 6 in 10 of those closures were expected to be stores in American malls.
Malls that have already permanently closed and cited the pandemic as a precipitating factor include Northgate Mall in Durham, North Carolina, Cascade Mall in Burlington, Washington, and the Metrocenter in Phoenix, Arizona.
Optimism for mall enthusiasts
Don’t be surprised if you, sometime within the next two years, say, “I haven’t been to a mall in ages.”
… And perhaps you’ve already said it?
But, if you’re old school like me and will look for reasons to frequent malls when the pandemic subsides, expect a change in the ambiance in establishments that do survive. The mall of the future might be a bit different than the fun, indoor, county-fair-like atmosphere we grew accustomed to in the 1980s and 90s.
Nevertheless, and despite the diminishing role of shopping malls in today’s world, Macy’s Chief Executive Jeff Gennette believes malls can still be profit engines in some areas and insists the core model will never die.
Macy’s, of course, will close 125 stores over the next three years in order to focus on the few locations that will remain open long term. Those stores are located in “A Malls,” elite indoor shopping centers whose revenue per square foot is in the top 25 or 30 percent of the industry.
“When you look at … the bulk of those Macy’s stores (that will remain open long term), they’re in Green Street [A] Malls,” Gennette said in June during a virtual fireside chat with Cowen & Co. analyst Oliver Chen.
“Fifty-one percent of our stores and 65% of our sales are in all A Malls of Green Street. And they’re the best malls in the country. They will stay, definitely, in my perspective, [and] will stand the test of time.”
So, if you’re looking to get an ice cream cone with your son or want a comfortable place to bond with a dating partner, friends, or out-of-town guests, you’ll probably still have a mall within driving distance a year from now…. If there’s an A Mall in your vicinity.
Do you think your local mall would be classified as an “A” Mall?
And do you think surviving shopping malls will be quite a bit different than what we’re accustomed to?
Please share your thoughts on the future of the shopping mall in American society.