Malls may not be dead yet, but they are having to make extreme changes in this new era of declining retail
Following World War II and the rise of suburbia, one of the most iconic establishments that came about was the creation of the mall. ¬†And just as brick and mortar retail today is in a desperate fight to stay solvent and relevant against the rise of online shopping, similar battles took place back in the 1950’s and 60’s between small mom and pop retail stores and the rise of massive one stop shopping enterprises in a central location.
Perhaps the best example of this came from the television show Happy Days where Mr. Cunningham, who owned a small hardware store, was offered a chance to move it into a prime location in a mall that was being constructed in their town. ¬†In the end he refused to move from his location out of stubborn pride and the inability to adapt to the future, and in later episodes he ended up losing his store to dwindling sales and traffic because customers preferred shopping at the new mall.
Fast forward to 2017.
Changes in personal income growth coupled with the rise of the Smartphone and online shopping is now threatening to do to the mall what the mall did to businesses like Mr. Cunningham’s hardware store. ¬†In fact, people today demand low prices over quality, and convenience over the ‘experience’ of travelling somewhere to go shopping.
So in trying one last gambit to save the malls littered across the American landscape, these shopping centers are moving away from reliance upon legacy anchor chains such as Sears, Macy’s, and J.C. Pennys and instead are finding niche businesses that cater to experiences over products, and are hoping they can entice consumers who are willing to travel to their locations to get it.
As the retail industry churns in the Amazon era, American shopping malls are turning to a new generation of stores, food and entertainment offerings to make up for an exodus of department stores.
Prime mall real estate is increasingly going to players who began online and are graduating to brick-and-mortar, such as plus-size clothing label Eloquii, or stores selling niche items like candy and conflict-free diamonds.
In some cases, these retailers are taking space, literally, from exiting chains like Macy‚Äôs.
Other additions include the trendy burger restaurant Shake Shack, and Dave & Buster‚Äôs, whose video game and pro-sports viewing restaurants are emblematic of the ‚Äúexperiences, not stuff‚ÄĚ mantra now resonant among consumers. –¬†Shanghai Daily
Demographics are showing that the prime consumer generation is much more interested in paying for experiences over material goods, as seen by how few homes, cars, and ‘stuff’ millennials actually own… especially when upwards of 40% of them still live at home with their parents.
Thanks to the artificial booms of the 1980’s, 90’s, and early 2000’s, too much brick and mortar retail expansion took place that wasn’t prepared for the advent of the digital age, or the rise of a different type of consumer. ¬†And where the Amazon’s of the world can easily replace all buying needs that even now include grocery shopping, these online portals can’t duplicate real life experiences, and that is what many malls across the country are hoping to take advantage of.
Kenneth Schortgen Jr¬†is¬†a writer for¬†The Daily Economist,¬†Secretsofthefed.com,¬†Roguemoney.net, and¬†Viral Liberty, and hosts¬†the popular¬†youtube podcast¬†on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.