The Future of Shopping Malls
Shopping malls were once just places for shopping. People streamed in with their shopping lists and scattered out of with their shopping bags. Besides the food court and the occasional bench, these unimaginative malls offered little for consumers to do. But consumers still shopped at the mall because, until recently, they had little other choice.
The advent of ecommerce, to which I will later return, is giving consumers an alternative. Unsurprisingly, less people are visiting malls to fulfill their shopping needs. From 2010 to 2013, American malls have experienced a fifty percent decline in traffic. Over the past decade, sales for US department stores have plummeted from $87.46 billion to $60.65 billion, and sales per square foot have dropped by twenty four percent. As a result, many major department stores are scaling back. JC Penny announced its plans to close over 130 stores across the country; Macy’s will close 68 stores; Kmart and Sears will close 150 stores by 2017. Many more department stores are following suit, shifting their weight from their physical to their online platforms.
These “Store Closing” signs plastered across the walls of department stores are also signs of trouble for specialty stores and boutiques. Department stores gather traffic for neighboring specialty stores as people visit malls intending to visit the department stores and only then stop by boutiques. As these big stores close down, owners are also struggling to find tenants to replace them. Indeed, a study by Green Street Advisors projects that fifteen percent of malls will disappear in the next decade.
This is unfortunate for the tens of thousands of employees who will lose their jobs. It is unfortunate for those in small towns who will be constricted in their shopping means. It is unfortunate for urban shoppers who must now travel far in fetch of their next open mall. Vicki Howard, author of ‘From Main Street to Mall’, noted in the ‘Penn Press’ that it is a also a loss of “valuable community space for meeting up with friends and family, taking part in charity or school events, selling Girl Scout cookies, or getting a picture taken with Santa at Christmas.” What explains the shopping mall graveyards sprawling across our states?
One major cause of the decline of shopping malls is the rising popularity of online shopping. Nearly seventy percent of Americans shop online at least once every month. Online shopping has many perks. You can escape the bustling crowd and the uncooperative salesclerk, as you shop from the comfort of your home (or classroom). Queues by the cash register are a problem of the past. You have clear access to an array of sizes, colors and styles of goods to choose from as these virtual malls transcend borders to get you what you want. As online stores don’t need to rent a space or hire as many employees, they can afford to give you better deals. You can compare prices across stores with a click of a button. Also, online shopping grants you the feeling of buying a present for yourself as you await the delivery and unravel the package - the element of surprise extant as you discover how your purchase looks like in reality.
Does this mean the end for the American shopping mall is upon us? A look at the most successful malls of today can give us a glimmer of hope. Take the Mall of America in Minnesota for example. Here you can ride a flight simulator for an aerial tour of America’s greatest sites, feel your adrenaline levels rise at its SMAAASH virtual reality gaming center, laugh in its comedy clubs, play golf at the miniature golf course, or throw your wedding at its Chapel of Love. An example across the border is the West Edmonton Mall in Canada. Here you can ride the world’s largest indoor triple-loop roller coaster, or play at the world’s largest indoor water park. The mall also has a petting zoo, an indoor lake with live sea lions, a life-size replica of the Santa Maria and more. The Dubai Mall is yet another example. Besides being home to 1,200 retail stores and an assortment of cultural cuisines, the mall hosts the Dubai Aquarium and Discovery Center, flight simulators, a children-sized city called KidZania in which kids can play grown up, dancing fountains that put on daily performances with light and music, and more.
What do all these malls have in common? Besides being extraordinary, these shopping malls are not just malls for shopping. They transcend the competition against ecommerce because they sell what no online store can provide. They sell experience. To survive, lagging American malls must do the same. Rather than bestow eighty percent of their space to retail stores, malls should dedicate more space for entertainment and leisure. That means having stylish cafes sprawled between stores, allowing shoppers to unwind from shopping. That means opening quality cinemas, sit-down restaurants, galleries, spas, play areas for kids, or even fitness centers. Aesthetics and architecture also contribute to experience. Lush greenery, artworks, high ceilings and grand windows create an open airy atmosphere. Employee-customer interactions are another integral ingredient for positive customer experience. A research titled “Discovering ‘WOW’ – A Study of Great Retail Shopping Experiences in North America” surveyed 1,006 North Americans shoppers and found that the top two most important great shopping elements were employees who were “very polite or courteous” and employees who were “very familiar with the products the store carried”. Thus malls should heed on hiring employees that can connect with customers on a personal level and on training employees to understand their products. “We forget that’s where we build the business: getting to know a little bit about the gal going to her wedding or the guy who just lost 50 pounds,” Bob Phibbs, CEO of The Retail Doctor noted in ‘Earnshaw’s’. “The world might not give a damn about a person’s life but, for three minutes, make your customer feel like your store does,” he advocates.
Another common theme among extraordinary malls like those mentioned above is diversity. Consumers are showing symptoms of “mall malaise” – a sickness with the standardization of chain stores. Malls across the region are like clones, each hosting the same layout and the same chain stores (Macy’s, Sears, Bed Bath & Beyond). Millennials have grown sick of this standardization and want to wash their tongues from the taste of corporate blandness. Oliver Mark, founder of Bodega, noted that, “The mall has become a negative term in youth fashion as evidenced by the term ‘mall-core’—slang for lower tier, unhip brands.” Youth are developing a penchant for personalized hip products. Thus, rather than searching at generic malls, they find unique products that match their fashion palate in online stores. The above extraordinary malls, however, present a variety of stores from global chains to local shops, from department stores to specialty stores, from the high end to the low-tiered brands, and from fast food restaurants to healthy juice bars. Recognizing the more international composition of consumers in our globalized world today, these malls also offer shops and restaurants of a range of cultures. Turns out, “one size fits all” truly fits none. These malls also embrace diverse architecture, breaking out of the cookie-cutter concrete block form. The Wafi Mall in the UAE, for example, takes on the form of an Egyptian Pyramid with hieroglyphics inscribed on its columns and walls, and a giant statue of Ramses in its courtyard. The Forum Shops at Caesars in Las Vegas, USA also grants consumers a unique shopping experience on the streets of ancient Rome, with beautiful Roman architecture, grand sculptures, and a replica of the Trevi fountain, all under a purple-pink painted sky.
Many of these malls act as quasi-community centers. Vicki Howard, author of ‘From Main Street to Mall’ remarks that “the decline of shopping mall culture in America parallels a diminishment of civic life and public culture as people choose to shop from the privacy of their own home”. Extraordinary malls, however, cultivate public and, by extension, shopping, culture through numerous community-wide events. They host science fairs, fashion shows, guest panel discussion on current issues, performances, birthday parties, computer workshops and more. For example, the Mall of America is hosting a Maddie Ziegler book signing, a Walk to Cure Juvenile Arthritis, and a session by Sesame Street, teaching kindness to kids. Such events make them not merely malls, but epicenters of peoples’ social lives. This draws traffic and sustains loyalty. It invigorates both shopping culture and community life, at a time when both are declining.
Finally, these malls work synergistically with technology. Like their consumers, these malls are merging the physical and the digital. Consumers can order products online and pick them up in store. These physical stores can also be showcases for online products, as they allow consumers to feel, touch and try products on. Roxana Castillo, founder and owner of Kissy Kissy, says in ‘Earnshaw’s’, “Brands have a great opportunity to bridge the gap between online and brick-and-mortar shopping in creative, fun and interesting ways that benefit the overall shopping experience of the consumer.” These malls explore such avenues, experiment with shopping apps, have interactive websites, and reach out to consumers through social media, informing them on special events and upcoming sales. Some stores are even experimenting with Bluetooth Low Energy appliances, also known as Beacon, that track smartphones and analyze your shopping habits, allowing it to give you personalized recommendations, coupons, and info on discounts. For example, as you approach a certain store, it will notify you of promotions in store for you.
If American malls are to survive, they must be centered on experience, offer diversity, and work synergistically with technology. The examples of extraordinary malls mentioned above do that. As a result, they are not only popular regional malls, but also new global tourist attractions. For example, in 2012, Dubai Malls received 65 million visitors. That is almost twice more than the number of visitors to the Eiffel Tower and Niagara Falls combined. Yes, many malls are threatened by online shopping. But this provides us the opportunity to reimagine what a mall could be and to rebuild it into something better than it ever was to begin with.