If malls could talk, they’d say ‘meow’
Thriving shopping centres have defied the prophets of doom
The wise in every culture leave behind proverbs that offer valuable life and business lessons. An ancient proverb comes to mind: “A cat has nine lives. For three he plays, for three he strays, and for the last three he stays.” Cats are believed to have nine lives largely because of their flexibility and agility, and their uncanny sense of balance, which enables them to land on their feet every time.
This is not a lesson in zoology, but the proverb is loaded with lessons for the retail industry.
Tales of the death of retail are highly exaggerated. Many people thought that the age of Amazon would result in a freefall for brick-and-mortar retail. Surprisingly, though, retail has shown the same righting reflex as the cat.
Research by the International Council of Shopping Centers (ICSC) shows that while e-commerce sales are growing at a healthy 85% year on year, in-store brick-and-mortar sales still enjoy an eye-popping 86% market share, bringing in about $4.5-trillion (R67trillion) across US retailers.
Even at home, notwithstanding a weak economy, rising unemployment and lower consumer confidence, retail sales still rose 1.1% year on year in August 2019 after a 2% increase in July, according to Stats SA.
The fears that online would cannibalise brick and mortar have fortunately proven to be unfounded. The reality seems to be that they are developing a symbiotic relationship. There is a convergence of online and generic shopping.
For example, premium retailers such as Yuppiechef are providing showrooms that allow consumers to touch and feel the products before they place an online order. Local e-commerce giant Takealot also has a physical store at Wonderboom Junction.
This omni-channel existence is in line with international trends. US casual men’s apparel company Untuckit went from an online presence in 2011 to 80 stores in eight years and now aims to have 100 stores by 2022. In fact, opening a physical store increases traffic to the retailer’s website. ICSC’s research also shows that closing physical stores causes a drop in online traffic by as much as 15%.
The benefit is even stronger, the report says, for emerging brands, which see at least some boost after opening at least one new store in a specific market. This is one of the interesting dichotomies of the current retail model in which all retail touch points are showing some growth, with brick and mortar anchoring the sales process.
Omni-channel is the glue that creates the “stickiness” from the first impressions to the eventual point of sale. Nearly 75% of multichannel retailers are more profitable than their pure-play counterparts.
What’s also interesting in data gathered from the recent upgrades to the Centurion Mall is that malls actually perform quite well in terms of traffic if you can offer amenities, experiences and entertainment to enhance the shopping experience. Where a lot of anchors have closed down or where there is room for expansion, the trend is towards remodelling for a more experiential-type environment.
Shopping centres are witnessing a growing trend in which they become a living space where the community plays sports, trains or discovers new culinary experiences. Together with innovative entertainment, pause areas and work spaces, the mall becomes the epicentre of social culture.
These cater to the shifting preferences of consumers as demographics start to skew younger. Shoppers today are looking for more than just what’s available on a website. They want an experience that a screen will never match. Furthermore, the
Malls perform well in terms of traffic if you can offer amenities, experiences and entertainment
definition of anchor tenants has changed over the years and malls see a diverse range, from fitness centres to upscale restaurants, that play the role of anchor tenants perfectly.
Younger consumers place a high priority on experiences, preferring to spend their money on them rather than on material things. Although two generations have grown up digitally, they still value and enjoy the experience of shopping in the in-store physical environment.
It is kind of counter-intuitive. If you look at the younger demographic, which is fed on a diet of data, this generation is actually growing up to like malls and is no longer confined to virtual spaces.
So, changing environments to respond to what the younger generations are looking for speaks volumes about the agility of mall owners to change at the rate of culture.
From the time the first enclosed shopping centre, Southdale Center, opened in Edina, Minnesota, in 1956, malls, like the proverbial cat, have played and strayed.
As the revival of malls continues, it is yet to be seen what malls will look like in the future. From the inception of malls in the 1960s as people moved to the suburbs, to experiences and entertainment ready-made for the millennials to like and share, malls have evolved to stay connected with their core audiences.
Like the cat with nine lives, malls will somehow find a way to parachute down to safety.