Retail Malls are being tested, and their survival is at stake. Retail Malls Change or Die.
Metcalf South was the mall of my youth where I watched the dishwasher with the glass front door wash dishes, Santa arrive by helicopter and where my parents took me to buy every pair of jeans and shoes.
Now this once thriving mall on 45 acres in suburbia Kansas City is dark. It is listed on the website, DeadMalls.com with hundreds more. Few states have been spared a closing retail mall.
How could such a vibrant central shopping center to a community fail?
Greg Lutje, partner at Samuels Yoelin Kantor LLP a Commercial Real Estate attorney joined me to discuss the changing landscape facing retail malls everywhere.
In researching the topic, there are many opinions and factors have contributed. Is it:
- Over built retail, simply more places to buy than demand?
- Decline in numbers of the Middle Class?
- Technology; the internet?
- Online retailers, have they replaced the traditional mall?
- Have the consumer wants changed?
- People are moving from Suburbs to Urban centers?
What used to be a single place to research and purchase clothing and goods has fallen victim to shoppers access to instant information on their phones. The consumer is armed with more information than the best educated sales person ever had in the mall of yesterday.
Consumers have the data, and access to many different retail vendors online to chose from. If the consumer wants to confirm the online data, they can seek out a retail outlet closest to their location and haggle with retailer over competitor price and make a purchase.
Mall owners who continue to operate status quo are closed. The foot traffic is not there, and consequently, the retailers are not leasing space in the traditional mall.
Q: What does the customer want?
A: More than a pair of jeans in a different size.
Not all malls are closed or forgotten. Some continue to thrive. What are the successful malls doing to remain relevant?
Successful Mall owners have created an “Experiences” for shoppers.
What is a “Mall Experience”?
The new mall experience is a lifestyle experience, not just a place to purchase merchandise.
The experience is a chance to:
- Walk outdoors on wide pedestrian friendly sidewalks
- Have dinner
- Grab a coffee or dessert
- Work out at the gym
- Catch a movie.
The successful suburban mall now has store entrances face the outside. This is different than the older model where store entrances were accessible only through the interior passageways of the mall.
In urban centers, where baby boomers and millennials are moving, the mall is going vertical same as the multifamily buildings the urban dwellers live in.
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