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Through a special arrangement, what follows is a summary of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.
An overstored environment, consumers conditioned for discounts, and Amazon.com have been cited as factors contributing to the death of American malls. But such a colossal and swift end to a ubiquitous and profitable format can, at least for the purposes of focusing future strategies, be lumped under one overarching cause: A massive shift in what consumers want from stores.
Our obsession with dead malls has resulted in too many retail players learning the wrong lessons from the format’s decline. Instead, we should be asking what meaningful insights — not just doomsday scenarios — we can glean from the demise of enclosed malls.
Is the death of the mall in America the end of the mall? No, it’s the end of cookie-cutter and strictly mall-based store growth. Chain store rollouts simply don’t work anymore. Malls will survive but not in the traditional sense. They will be community gathering places first, and places for commerce second.
Can retail’s obsession with comps end? Few physical stores can rake in the kind of profits once possible in the heyday of the mall. Yet, companies hold on to the same expectations for growth and store profits. It’s time to combine online with offline sales and end the two-channel binary. The lesson: fewer but better stores, with a focus on using brand experiences inside the physical store to drive online sales.
Is it time to stop opening new stores? To remain relevant in the lives of consumers, retailers must continue to open new stores, but what constitutes a new store needs reexamination. Stores need more versatility to adapt to tech innovations and shifting consumer demands — something between a pop-up and a massive, capital intensive permanent structure that costs millions, not to mention takes years to plan. More seasonal flexibility is required.
Do real estate location choices doom retail centers? “Location, location, location” doesn’t hold anymore. It’s about creating destinations that are worth the drive. Commerce centers need to adopt the mindset of the concert promoter and hire people who understand promotion and how to create places that play vital roles in people’s lives. It’s not about managing real estate space, but drawing in crowds.