“Whoever said that money can’t buy happiness simply didn’t know where to shop.”
Some of my most vivid childhood memories were...visiting the local mall, especially during the holidays. The family would get all dressed up, walk around the shops for hours and my mom’s constant nagging for us kids to be careful lest we accidentally bump into something that would catapult my family into financial ruin. Then my memories as a teenager hanging out with friends and my sister gossiping and gorging on Mrs. Fields Cookies, Wetzel’s Pretzels, See’s Candies or Popcornopolis. It was always something I looked forward to – the sights, touch, scents, sounds, and taste of the experience was just pure bliss for me. During my recent trip back home to St. Louis, boy oh boy, have things changed. Instead of visiting the St. Louis Galleria or Chesterfield Mall, we hung out at Target, Walmart or Dierbergs (local grocery chain). I mean that’s a complete 180!
Thinking about it now—this trend dubbed as the American retail apocalypse has actually been going on for a while across the country. Of course, I had to take a closer look…and holy s**t Batman things have changed, not only because of the lingering impact of COVID… nope, an honest to goodness paradigm shift happened before our very eyes.
Here, check it out:
In 2017 there were 116,000 shopping malls in the US. Granted at least 65% were strip malls…but, still. Today, there are only 1,000 malls remaining.
During the same period, in 2017 there were 8,300 department stores. Consistent with the dramatic decrease in malls---department stores have now been whittled down to 6,300 with another 25% reduction by 2025.
No new mall has been built in the US since 2006
I mean WOW!!!
Although this is alarming, especially if you’re a retailer, property manager or mall owner—the signs have been there for quite a while. There’s tons of converging reasons for this development, here’s some of the primary ones:
Amazon, Amazon, Amazon & the emergence of online and social shopping
COVID happened…
Consumer preference changed. Malls/department stores are not the Millennial and/or Gen Z thing.
High debt loads and escalating rents.
Little-to-no foot traffic, interest, or relevance.
Massive consolidation and loss of unique players in the market (Lord & Taylor, Marshall Fields, Famous Barr etc)
But all is not lost. Here’s why…
Due to pent-up consumer demand and integration of unique customer experiences-- there’s a sudden resurgence happening…Let’s look:
With a wide diversification of service offerings people have come back to check out:
Urgent Care Clinics
Indoor recreation parks, go-carts, miniature golf & gyms.
Virtual Reality, Artificial Intelligence & wide variety of interactive digital activities.
Revamped movie theaters, seating, and in-theater dining.
Hybrid indoor/outdoor mall.
Addition of well-known hotels, restaurants, and on-site access to theme parks.
Integration and promotion of one-of-a-kind WOW experiences
Remix of traditional anchor stores to more current/in-demand ones (Target, Walmart, Gold’s Gym)
Wide range of pop-up events
And the top 5 malls that are still killing it, in respect to consumer appeal, traffic, inventiveness, and profitability:
Mall of America-Bloomington, MN (555 locations)
American Dream-East Rutherford, NJ (455 locations)
King of Prussia—King of Prussia, PA (450 locations)
South Coast Plaza-Costa Mesa, CA (280 locations), and
Aventura Mall—Aventura, FL (307 locations),
On a go-forward basis—do we expect this success to continue?
Despite inflation, high gas prices…people are still supporting and coming to the mall. Perhaps its due to the “pent-up” demand from the COVID lockdown, or more likely, the department stores and malls simply listened and responded to the direction dictated by the consumer and market.
And, here's what we expect to happen moving forward:
Lower-tiered malls and strips to go dark.
Current anchor tenants to disappear…being replaced by digital/interactive activities and lifestyle locations.
Malls to transform into mixed-use properties - commercial (retail), office, residential, and other uses.
Malls to focus on entertainment and educational/interactive activities.
Hybrid of indoor/outdoor malls.
More pop-up events.
Luxury malls will rule
So, what does this mean?
It’s complicated…but, then what isn’t in today’s world? At this point—we can only guess the success of the mall industry—although personally, I’m rooting for them. I miss those days of simply hanging out with friends and family at the local mall.
As a retailer, here’s a few ways you can pivot to survive the "American Retail Apocalypse:"
Invest in a professional website (if you haven’t yet) that offers both convenience, security, and a personalized customer experience.
Adopt an omnichannel customer strategy to provide a seamless shopping experience. This includes brick-and-mortar stores, websites, marketplace (e.g., Amazon, Etsy), mobile apps, social media, etc.
Offer new fulfillment methods: curbside pick-up, local delivery, contactless payment.
Include buy-now-pay-later (BNPL) options for your consumers.
Micro-retail locations (e.g., kiosk or a stall within a store) and pop-up shops.
Offer virtual experiences - yoga classes, makeup tutorials, cooking classes, etc.
Get involved in your neighborhood/local community
Capitalize on blockchain technology and offer crypto payment options
Figure out how to participate in the Metaverse and drive business back to your physical/online location
For more business tips, check out my other blogs. And email me at debbieg@bizmadeez.com for help with marketing and branding for your small business.