After America’s most popular department store Macy’s announced that it would shut down 100 stores across the country, we knew that it was a sign that shopping malls are being killed by online shopping (Peterson, 2017). Shoppers who once spent their hours in stores trying on products and queuing in the line to pay, are now shopping online comparing prices among the competitors and choosing the most ideal time to deliver at their homes. Shopping online is not only convenient and accessible 24/7, but it also provides more options to the consumers and it is much more timesaving. According to Ram (2017), nowadays consumers are much more into shopping for experiences. Millenials have shifted their ways of spending to dining out and traveling. Furthermore, millenials are more driven by the experiences that will make the best social media content (Thompson, 2017). All in all, this group noticed how time is a luxury and prefer to order products online. Malls and retail stores need to wake up soon and realize that in order to stay relevant and grow, they need to adapt and change their strategies.
So will malls be able to overcome this trend and continue to survive? There are several things malls can do to strengthen their position in the retail industry:
- Setting up a diverse tenant mix: the once occupied spaces in malls could now be replaced with entertainments, learning zones or food hotspots (Schaefer, 2016). By housing fitness studios, medical offices, beaty salons and grocery stores in the mall, many consumers will find there are more values added in going to a mall that will contribute to their experiences.
- Creating a ‘click & collect’ concept: in order to make shopping more convenient for customers, malls could start using the ‘click and collect’ concept. This way, customers could purchase products online and then collect it later at the mall. According to ICSC (2015), consumers who participate in click and collect shopping, they tend to buy additional goods that were not part of their original purchase once they hit the store.
- Rolling out mobile apps: malls could start rolling out mobile apps, or upgrading their current apps to be more interactive and customer-focused. For instance, shoppers could use their location and find real-time parking lot spaces on the app, real-time navigations to find certain stores, finding their customer’s loyalty on the app and much more. The app could also personalize offerings and recommendations to the consumers, which in return would likely stimulate consumers to purchase more in the mall or on the app.
With these action points, malls could certainly step up their game and combat the current crisis they are in. I strongly believe that malls would not fade away entirely if they start providing more diversity of products and services within their malls and start embracing technology. Sometimes you would find me hours in a mall because they just have so much to offer: from sitting in a Ferris wheel to joining 2-hours art classes to eating at delicious restaurants. Of course, many malls (especially older and traditional ones) still have to catch up with these ideas and it will take some years before they could fully implement it. Lastly, what are your thoughts regarding malls becoming obsolete? Do you think they will disappear in the future or they will rejuvenate?
Bibliography
Peterson, H., 2017. Macy’s may shut down even more stores. [Online]
Available at: https://www.businessinsider.nl/macys-might-shut-down-more-stores-2017-5/?international=true&r=US
[Accessed 24 September 2017].
Ram, S., 2017. Meeting millennials where they shop: Shaping the future of shopping malls. [Online]
Available at: http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/meeting-millennials-where-they-shop-shaping-the-future-of-shopping-malls
[Accessed 25 September 2017].
Schaefer, S., 2016. How Malls Will Survive In The Age Of Amazon. [Online]
Available at: https://www.forbes.com/sites/steveschaefer/2016/07/08/can-malls-stay-relevant-in-the-age-of-amazon/#30dbda2330b2
[Accessed 25 September 2017].
The International Council of Shopping Centers (ICSC), 2016. A Whopping 91 Percent Of Holiday Shoppers Made Purchases In A Physical Store, According To New ICSC Holiday Consumer Purchasing Trends Study. [Online]
Available at: http://www.prnewswire.com/news-releases/a-whopping-91-percent-of-holiday-shoppers-made-purchases-in-a-physical-store-according-to-new-icsc-holiday-consumer-purchasing-trends-study-300202004.html
[Accessed 26 September 2017].
Thompson, D., 2017. What in the World Is Causing the Retail Meltdown of 2017?. [Online]
Available at: https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/
[Accessed 25 September 2017].
Hi Xian,
I believe malls will certainly not disappear. Some types of malls will indeed need to strange their strategies in order to survive. I would like to add something that malls can do to strengthen their position in the retail industry: create space for pop up stores. In the Netherlands the popularity of pop up stores is increasing. I believe malls should do this because pop up stores are promoted as a unique retail experience and an exclusive showcase of the brand story. This is exactly what shoppers want nowadays!
In your blog you are talking about grocery stores in malls, but don’t you think consumers will also let their groceries be delivered at home in the future too?
Hi Anneline, thank you for your comment! Indeed, I also agree that pop up stores would be a good idea for malls to strengthen their position and as an active shopper I can definitely relate to that. I read many articles regarding buying groceries online and have it delivered at home. I believe it will be a popular method in the future, however, it will not entirely dominate the market. Grocery deliveries is perfect for elderlies, parents who don’t have much time in hand to shop at a physical store or any busy person who would find this valuable. However, there will be a large group of consumers who still want to physically see each product they buy to check the quality or texture, or consumers who need that one thing he or she forgot to buy and need it as soon as possible. All in all, physical grocery stores will not disappear anytime soon despite that online groceries are starting to crawl its way here
Interesting post Xian, I think that malls are definitely facing a crisis as innovation in online shopping is reducing the need for individuals to travel to the mall. I agree that malls will not entirely disappear, however i think they need to change their focus from simply offering the product, to creating a more complete shopping experience by making it ‘enjoyable’ to go to a store, so that they can add more benefit than simply selling the product. Possibly by personalizing shopping and using more innovative products such as augmented reality, to show how clothes fit you without needing to try them on first.
Hi Shaffy, thank you for your comment! I do agree too, if stores start personalising our shopping experience in stores would also be a good solution to combat the online shopping industry.
Hi Xian! Thank you for your interesting post. I can certainly relate to that. I worked as a sales advisor for more than four years at Tommy Hilfiger in Rotterdam. So, I know there is happing a lot in the retail industry. I’m convinced that retail stores and malls will still exist in a couple of years, but a lot of stores are probably going out of business. In my opinion, there will always be consumers who would like to feel, experience and see the product in real life. I think that this will also depend on the sort of product. For example, wash machines are goods that you will order online, since it is almost impossible to buy them in store and bring them home. Mostly, a wash machine is a product what you probably need right now, because your old one broke. So, you probably won’t wait too long and order it online soon. Other products, like luxury goods are products that people want to see in real life. Besides that, people want to experience the whole process of buying this good. A good example is a Chanel bag.
According to an article of Retail Trends (2017), the retail stores are disappearing due to the higher educated CEOs. The real entrepreneurs are out of business and more scientifically educated people are taking over. They argue that owning a retail firm is more than just know how you should do it. Therefore, it would be helpful for the continuity of the retail stores to have more entrepreneurial CEOs and managers.
Source:
Retail Trends (2017). ‘Retail verdwijnt langzaam uit de genen’. Retrieved on September 27, 2017 from https://retailtrends.nl/news/39516/retail-verdwijnt-langzaam-uit-de-genen
Hi Shanice, thank you for your comment! I agree with your points too, I do believe that there will always be a part of consumers that want to experience the whole buying process, which online shopping cannot replace. The service received when buying luxury products or the feeling of finding the perfect gift for your dear ones is just irreplaceable. Furthermore, thanks for the article referral! Indeed, having more entrepreneurial CEOs and managers would definitely help boost malls into coming up with more catchy or attractive strategies.