Reports indicate that malls across America are closing at an alarming rate, and several of the stores we’ve all come to know and love may soon be available solely via a computer’s address bar. Macy’s, for instance, a global retail powerhouse with upwards of $27 billion in sales annually, will close the doors of hundreds of its stores in the next few years. It’s not the only anchor store that’s cutting its losses, however. Sources claim JCPenney and Sears will also be boarding up several of their locations due, simply, to lack of sales.
In fact, according to a report by Business Insider, almost 25 percent of America’s nearly 1,300 shopping malls are at risk of losing a large department store. The closing of these anchor stores spells trouble for most malls, as records show that when they leave a region, it is uncannily difficult to find a suitable replacement store. With many of these giant retail locations covering more than 100,000 square feet, it’s not hard to see why, and when no replacement is found, the mall’s finances take a huge hit. Howard Davidowitz, chairman of a large retail consulting firm in New York City, claims that these store closures and the sharp drop in mall sales that often follows could also be devastating for communities.
“The communities wither away, and they never come back.”
With many American malls providing thousands of jobs for citizens in host cities, decreased sales and reduced customer traffic means more layoffs, and eventually, a less-than-healthy economy. Additionally, reports seem to indicate that large-scale mall closures lead to an increase in crime. In Akron, Ohio, for instance, records show a homeless man was imprisoned after he was discovered living inside of a vacant store, a man was burned beyond recognition after unsuccessfully trying to swipe copper wire, and the body of a murder victim was found behind one of the mall’s boarded-up stores.
According to experts, the reason behind the death of America’s mall scene has everything to do with accessibility. In a nutshell, consumers are far more at ease shopping from behind a computer than anywhere else. Author Robin Lewis, a man with over 40 years of experience in retail operations consulting, describes the new conundrum of remote shopping rather succinctly.
“All of a sudden, the consumer now has every single retail store throughout the world a key tap away.”
Records show that, since 2006, no new malls have been constructed. Lewis even predicts that about half of all national malls will be closed within the next decade.
According to analysts, Amazon, one of the world’s largest online shopping platforms, is allegedly one of the biggest contributors to the decline of the American mall. Reports indicate that almost every time malls seem to experience a large-scale significant financial loss, the company founded by mega-billionaire Jeff Bezos experiences substantial gains. With the addition of user-friendly services like Prime and Alexa, the e-commerce behemoth doesn’t appear to have any intentions of slowing down.
Sources indicate that American malls haven’t completely given up hope for a comeback, however. According to Mark Slusher, senior vice president of Thalhimer Realty Partners, upper resource management is working on a plan to “create a new experience” that will attract people to the more personable atmosphere physical shopping offers. Included in that plan, according to Slusher, will be new attractions like theaters, trampoline parks, laser tag, and high-end restaurants. He indicates that, in theory, the more a consumer can experience in real life, the less inclined they will be to shop from the internet.
Records do seem to support this assertion, as a recent report claims that the few malls that are surviving in the new e-commerce-dominated market all seem to offer an experience that focuses on engaging the customer first and foremost.
As malls across America look to return to the “golden age” of shopping, they’ll hope to implement strategies to compete with an ever growing online retail market.
[Featured Image by Stephen Maturen/Stringer/Getty Images]