Over the last five years, there’s been no shortage of millennial think pieces addressing the way we live, navigate, and see ourselves in the world. And, honestly, this write up may fall right into that category, too. In fact, this will be the first piece in a little series I do touching on how the internet and our shifting behaviors have affected three areas, in particular: retail, shopping malls, casual dining, and renting vs. ownership.
Today, we address the rapidly changing retail and shopping mall spaces
Companies that have spent billions, in the last 60+ years, establishing physical footprints around the US are now hustling hard to establish a digital footprint and a cool brand that’ll enable them to stay afloat.
The shopping mall as we know it was created in the 1950s and has evolved and grown drastically up until the mid-2000s. Today, 1,070 malls are operating in America, a country which boasts more retail square footage per capita than any other nation – by far. Nearly 1/3 of those malls are on the brink of closure with lessening foot traffic, low sales, and reduced occupancy rates. In 2016 alone, mall traffic went down another 13%.
If anything, the advent of the internet has led the way to the molding and shifting of millennial habits that now puts some of our oldest industries in the positions they’re in today. While Amazon continues to skyrocket and companies like Walmart tag themselves into the game (i.e., acquiring Jet.com), brick and mortar retailers are finding themselves in a rapid downward spiral.
Take a look at some of the closures from this year alone:
|Store||Stores Closing||Bankruptcy (Y/N)|
|Payless Shoe Source||400||Y|
|Sears||40% of stores||Not yet…|
|American Apparel||All locations (100)||Y|
|Abercrombie & Fitch||60||N|
|Bebe||All locations (175)||N|
|BCBG Max Azria||120||Y|
|Radio Shack||From 7300 stores to 70||N|
|Wet Seal||All remaining locations (171)||Y|
Although this paints a rather morbid picture, it’s important to note that with time, things change. We’re on the precipice of seeing total commitments to the online retail space and more experiential, in-store shopping. Because of this, branding is more important than ever, and the neutralizer that the internet somewhat presents itself to be will drive companies to unveil their why more to the public. We’ll continue to see more content, more cross partnerships, and more social engagement/activity. Think of Home Depot’s online DIY series or Ben & Jerry’s words on the Black Lives Matter movement. This is just the beginning…
It’s interesting that in a time of retail brick and mortar closures, companies should look no further than to TJ Maxx and Marshalls who are seeing record sales because their bargain style businesses have naturally created the desired experience for their customers. Like thrift culture, the ability to unearth clothing that’s cool, fits, and doesn’t break the bank can be exciting.
A couple of other shifts
Companies will have to make more pick up points and may downsize to providing strategic locations for customer service and for events they get accustomed to hosting more of – in an effort to shape their brand. And, as Amazon has recently shown, historically digital companies will look to capitalize on the newly vacant spaces their brick and mortar counterparts have left open.
It’ll be interesting to see who fairs better – the old school businesses jumping deeper into the world of the internet or the new school, internet companies trying their hand at physical locations.