One of the pitfalls in maintaining a general gaze at the long-term trend toward e-commerce at the expense of "brick-and-mortar" stores lies in missing or overlooking other changes in the business environment. The weight of such changes can fall largely within the "brick-and-mortar" world, impacting some of its neighborhoods more than others. Not all change impacting commerce in 2013 stemmed from the internet. The fate of the indoor mall is a case in point. Taking into account the obvious impact of online purchases does not explain why stand-alone stores and outlets were doing so much better than the noisy, sterile malls.
Anticipating further detrimental impact on in-person transactions from increasing online purchases, Michael burden, a principal with Excess Space Retail Services, predicted after the Christmas season of 2013 that the retail sector would likely see an average decrease in overall retail square footage of between one-third and one-half within the next five to ten years. He cited fewer mall visits and less inventory needing to be stocked in the stores.[1] Less retail space not only includes smaller stores, but fewer as well. As regards store closings, the question of whether the indoor mall is to stand only as an artifact of an earlier society or a structure that can adapt to ever-changing societal mores begs for a definitive answer.
One
big shift in store closings underway already by 2014 stemmed from retailers shying away from
indoor malls, favoring instead outlet centers, outdoor malls, and stand-alone stores. "There's
no question that mall stores are closing quicker than the open air [variety],” David Birnbrey of The Shopping
Center Group said.[2] Although new retail construction
completions were at the time
at an all-time low, the supply of new outlet centers had picked up in recent quarters
according to Richard Ellis
of CD.[3] Meanwhile,
no new indoor malls were being constructed. Rick Caruso, founder and CEO of Caruso Affiliated, was
unaware of any indoor mall being built in
the U.S. since 2006.
"Any time you stop
building a product, that's usually the best indication that the customer
doesn't want it anymore," he said.[4] Sometimes
what is not done (or said) is more important than what the attention-getters are
doing (or saying).
What exactly lies behind the impending demise of the
shopping mall? E-commerce cannot be the whole story, for otherwise the outlets,
outdoor malls, and stand-alone stores would face an equally dismal prospect. Rick Caruso declared at the 2014 National Retail
Federation convention that at one point, the indoor mall “may have met the
developer's needs—and even for [a while], the consumer's needs—but it has
outlived its usefulness."[5] Without a major
reinvention, traditional malls would soon go extinct as though a species unwilling or unable
to adapt to rapidly accelerating climate change.
Unlike the sort of experience that coffee shops off, the amusements here at Mall of America in 2005 are only indirectly linked to the products. (Image Source: Jeremy Noble)
Specifically, mall retailers must figure out how to
get back in sync with people’s daily-life rhythms by creating a satisfying
atmosphere for customers to experience. Many coffee shops had already achieved
as much by offering wifi, good smells, particular styles of music (or none),
and comfort (e.g., nice chairs, no fear of getting kicked out for hanging out
too long, etc).[6] The comfort factor is subtle though significant nonetheless. Just weeks into
2014, news broke of yet another “mall
shooting.” Malls and schools were already becoming associated with guns and
death in the psyche of the general public. The managers of malls themselves and
the particular stores therein faced the daunting task of finding and
implementing novel experiences in line with a “modern-modern” society while facing
a stiff headwind manifesting as an increasingly bad reputation in the broader
society.
1. Krystina Gustafson, “A ‘Tsunami’ of Store Closings Expected to Hit Retail,”
CNBC.com, 22 January 2014.
2. Ibid.
3. Ibid.
4. Ibid.
5. Krystina Gustafson, “Without Rebirth, Malls Face Extinction: Developer,”
CNBC.com, 13 January 2014.
6. Interestingly, a Starbucks store manager approached me on one occasion as I was
setting up my laptop just after sitting down to demand that I buy something or
I’d have to leave. I pointed out that I had just arrived and was waiting for
the line to shorten, and that Starbucks’ policy permits people in the stores
without making a purchase, but he dismissed both points and continued to bark
his order as though I were an alien insect. I left rather than made the
purchase I had intended, and called Starbucks’ customer service to complain of
the manager who could not be wrong. After a bit of fake sympathy and
affirmation of the policy as I had understood it, the “customer service”
employee impotently said, “Unfortunately I cannot call that store manager to
correct him on the policy.” I mention this because I have not since felt as
comfortable surfing the net while enjoying a coffee in a Starbucks store. In
fact, I stopped going to Starbucks stores and not soon thereafter gave up
coffee as a regular drink because of its negative effects on the body (such as
hard stools, headaches, and a general sense of nervousness while on the drug).
