All over the country, we hear talk of the “retail apocalypse.” Brands that once thrived, from Wet Seal to Borders, have closed their doors for good. Generations-long Staples like Sears, Macy’s, Sam’s Club, and JC Penny continue to shutter stores nationwide to avoid bankruptcy.
These once powerful chains have buckled from competition against online retailers. In many cases it’s impossible to match the lower prices and convenience of Amazon and other online shops.
The retail apocalypse officially reigned in during 2016 when major retailers closed thousands of stores across the country. But the seeds were sown long before that year. Brick and mortar stores have been feeling the pressure increasing for a long time along with the rising popularity of online shopping. In fact, The Guardian reports that half of all U.S. malls will close by 2023.
But this is not reason to despair and lament this American institution! Malls won’t die out entirely, and the strongest ones can still thrive. There is an appeal to seeing, touching, and trying on products in person that cannot be replicated online. Malls can either fail, or instead accept that they must adapt to changing climate.
Here are five different steps a mall can take to survive and thrive as Gen X and Millennials inherit the earth:
Focus on High End Purchases
With the rise of apparel orders direct from Asia, it’s not realistic for malls to undercut clothing prices from digital brands. Instead, malls should not focus on apparel to the extent they may have 20 years ago, and instead concentrate on high-end purchases.
But malls are not just for the wealthy! Consumers will rarely purchase items online that exceed $1,000. This is especially true for furniture, making home furnishings stores a great choice to lease spaces for. Similarly, fine jewelry like engagement rings is rarely purchased online. High-end specialty stores, such as a shop offering gifts made of reclaimed driftwood in California’s Pacific Mall, are a possibility as well. Bargain shopping shouldn’t be a major segment (although should not be ruled out entirely).
Offer Experience-Based Alternatives
While Millennials, now the largest generation, prefer to buy many things online, they also prefer to spend money on experiences over material purchases. How does this factor into shopping malls, designed to house retail shopping?
The key is entertainment. Shoppers still love malls that can provide meeting spaces that offer a great ambience with lots to do. The modern mall would be smart to include such amenities as full service restaurants, cafes, gyms, spas, bowling alleys and children’s rides.
Instead of more retail space in bad quality malls, we should make the best use of mall space we do already have and not expand just for the sake of it. Malls can be renovated to be more modern and fun to visit and offer good quality merchandise and experiences that can’t be found online. Beauty stores like Sephora tend to do well for this reason also- why would a woman spend $35 on foundation before trying it on??
Adapt With A Strong Digital Presence
The modern mall can thrive by embracing technology, not fearing it. It would be wise to craft a great, mobile-responsive website with an intuitive design that is frequently updated with mall news. The key is interesting content, making shoppers want to like, comment and share with friends via social.
Social media strategy is vital to a thriving modern business, and there are lots of possibilities for out of the box thinkers. By posting a selfie in front of their favorite store, shoppers at Alabama’s Midtown Village Mall have the chance to win a $500 voucher for that store. Offering contests, online coupons, and attractive photos may increase user engagement, translating to traffic and sales! Social media also presents the unique opportunity for targeting user interests, demographics and search habits. Users can be shown relevant offers tailored to them, such as showing engagement rings to young couples who have searched for them.
Malls are even going beyond social media and creating digital spaces for entertainment and apps for convenience. Users can check for parking spaces through their phones, use an interactive VR map of mall stores, and watch their 3-D printed goods created in real time. Malls are also beginning to use video screens and smart kiosks for an entertaining experience (think Blade Runner). SocialWall's technology lets users post a special hashtag for the chance to get featured on their video screens!
Offer Everyday Staples
Drug stores inside high traffic malls often do very well. This is because people are unlikely to purchase personal items, from tissues to face wash, over the Internet. Customers do not plan ahead for items like this, usually buying them in the moment they are needed. This could be seen as “cross merchandising” for the rest of the mall, meaning that if necessities are put in front of their eyes, customers will purchase them even if they went in for something different.
Hence the reason we it was mentioned earlier to not rule out bargain shopping entirely- a dollar store can be a great asset in the mall! In a down economy, dollar stores are practically recession-proof. Despite small profit margins, dollar stores thrive on volume and attract steady streams of customers.