As Retail Industry Reels, Malls Look to Reinvent Shopping Experience (cont.)
Repurposing some space is giving both big retailers and moms-and pops exposure to new consumer markets. The rise of pop-up shops like The Market @ Macy’s renting spaces at department stores gives brands and new companies a rental space to sell their products at established retailers. It allows Macy’s to use space more efficiently, attract new customers, and expose small businesses to the department store’s customers without a long-term commitment. Rentals are monthly, rates are based on location and the initial launch of the turnkey operation will take place in Boston, Detroit, New York, Las Vegas, Los Angeles, Seattle, San Francisco, San Antonio, Pittsburgh, and Fort Lauderdale. The strategy is expected to be a magnet for younger and more social media savvy consumers who are likely to promote their products, Forbes reports.
Debt, digital retailing, and too many stores continue to be a problem for retailers, but Alix Partners LLP global co-heads of retail consulting Joel Bines and David Bassuk write in an April 13 New York Times op-ed that the industry’s issues are being addressed. “Retail has been in a constant state of renewal since the earliest days of commerce. Artisans were disrupted by merchants, who were disrupted by bazaars and spice-route traders. Pushcarts disrupted stand-alone stores. The Sears Roebuck catalog of 1893 disrupted the first era of brick-and-mortar retail. Malls disrupted the town square; superstores and category-killers disrupted the local five-and-dime. And now, off-price, dollar stores, fast-fashion and online players are shaking up the industry. Through it all, retail has survived,” Bines and Bassuk write.
All is not gloom and doom with online competition. Although Amazon collected more than 40 cents of every dollar spent online last year, just 8.9 percent of retail sales in the United States were made online. Additionally, 91.1 percent of the $5.7 trillion consumers spent at retailers were at physical locations. Bankruptcies and store closings wiping away retail’s overcapacity problem, reduction of debt levels, and a growing economy may be “a recipe for a retail renaissance” Bines and Bassuk write. Innovation will be difficult but the writers see the “experiential” stores appealing to the “shoppertainment” mall experience and “local” retail that favors curated offerings. “Don’t bet against retail; the destruction it’s going through now is, as in the past, of the creative variety,” Bines and Bassuk write.
To bring America’s hundreds of dead malls back to life, reporter Leanna Garfield writes in Business Insider that empty mall space is being transformed to meet new community and consumer needs and priorities. They include art galleries, indoor farms, grocery stores, classrooms, party space, libraries, medical clinics, fitness centers, offices and apartments. Entertainment options include fashion shows, theaters, bars and restaurants, laser tag and more.
Malls once spelled the death of mom-and-pop stores before the behemoths faced their own demise. Perhaps both can work together to revitalize communities and the retail industry in new ways.