Recently, Sears announced they were closing 66 more stores to bring its Sears and Kmart stores back to profitability.
One of those stores is in Asheboro, attached to the Randolph Mall. Most malls still have what is considered an anchor store, a department store like Sears, aimed to draw people to the mall and its smaller stores. But, more and more we hear of these department stores closing. In fact, in 2017, over 3,500 stores will close its doors, ranging from department stores to middle of the mall stores.
But, does an anchor stores mean the downfall of an entire mall? Can malls still succeed and profit against online shopping?
QUESTION: Are we seeing the death of malls?
PROCESS: To verify this claim, we reached out to retail experts with The Integer Group and Retail Concepts and pulled a research study from Fung Global Retail & Technology.
The Executive Vice President of Digital of The Integer Group scoffed at the idea of “the death of malls.”
“That feels like a bit dramatic,” said Morgan McAlenney.
But, the mall landscape is changing. The first US mall was built in 1956 and acted as a commercial shopping center complete with a day care, library and post office. Strip malls and what we now know as the traditional, enclosed mall soon followed.
The number of malls doubled from 1970 to 1980. In the 1980s, teen spending increased 42 percent. A decade late, mall popularity peaked, with the largest mall in the US, The Mall of America, opening in 1992.
Now, there’s 1,200 malls, but only 20 percent of them see 72 percent of all mall sales. Retail experts think in the digital age, there’s simply too many.
“Consumers need a reason to go somewhere now because everything is just a click away. Before the reason was just community,” said McAlenney. “Some of the entertainment value can just be in the interior design.”
That’s not to say all malls are failing. The top ten malls in America saw a 20 percent increase in sales since 2012. Why? Retail experts say malls that succeed offer “experiences” instead of just a sale on jeans.
Bal Harbour Shops in Florida, listed as one the most successful malls, has an open-air concept and is known for luxury items.
The Forum shops in Las Vegas? Spiral staircases, talking statutes, with stores options ranging from Gucci to H&M.
Ala Moana Center in Florida has a giant stage built in the ground level for performances.
Outlet malls and strip malls are doing extremely well. Since 2012, 41 outlet centers have opened in the US and another 57 new outlets or expansions are set to open by 2018.
Alyson Anderson, partner at retail consulting firm Retail Concepts, explained traditional malls pushed people to seek discounts.
“Many of the anchor stores survive on sale after sale and have trained people to never pay full price which leads to a customer who only comes to the mall for one of these fake sales and not to just browse and shop as they once did,” said Anderson.
And many outlet malls and strip malls offer sit down restaurants, high end products, and sometimes even a place to exercise or a pet groomer.
Anderson explained malls should look to become a “destination” instead of just a place to shop.
“Adding green space, interesting exercise options, bowling alleys, co-working and meeting space, dining, and other fun things will help.”
Online shopping helped to drive traffic away from traditional malls. But, a Pew Research study, found more than 64 percent of Americans still prefer making purchases at physical stores.
VERIFY: So, we can verify, not all malls are dying, that’s false, but traditionally designed ones are struggling to keep up.
Fung Global Retail & Technology
Morgan McAlenney, EVP, Digital, The Integer Group
Alyson Anderson, Partner, Retail Concepts
Pew Research Center