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There has been much hubbub of late about the demise of an American institution–the beloved shopping mall. There’s even a site called deadmalls.com that offers open casket views of some hangout places of yesteryear. YouTube offers The Dead Mall Series in which the host conducts tours through mostly empty monoliths of concrete–a play by play of morbidity and melancholy.
But if shopping malls could talk, they’d channel their inner-Twain and say:
“The reports of my death have been greatly exaggerated.”
Despite doomsday predictions of 20-25 percent of malls closing in the next five years (due to the rise in online shopping), industry statistics from the National Council of Real Estate Investment Fiduciaries (also known as NCREIF) indicate that the net number of malls in the US has never declined–only increased or held steady, with occupancy rates remaining at a healthy 92 percent.
But what about that shopping center near you where you could hold court in an empty food court?
No one said there aren’t plenty of dying malls. But the U.S. shopping mall industry (1200-plus malls) as a whole isn’t dying.
It’s changing.
Out with the old, in with the new. Just like office buildings. Or football stadiums.
In an exclusive interview with Brian Harper, CEO of Rouse Properties (one of the fastest growing mall developers in the United States), I learned strategies for successfully adapting to a rapidly changing retail shopping environment.
These four lessons lie within for anyone trying to thrive amidst a changing industry:
1. Experiences still matter.
Yes, online shopping is growing in leaps and bounds.
But people will always want experiences.
Amazon didn’t buy Whole Foods just because it’s hard to ship iceberg lettuce to your door. Harper knows this and makes sure his company sweats the details of the physical shopping experience–what sounds to pipe into their malls, what levels of music, what scents, what visual mixture is most eye appealing.
No matter who your customer is, who is threatening to take them away from you, or what you sell, delivering a great customer experience is what keeps them coming back.
We tend to lose sight of this with all the shiny balls of irrelevant innovation or seemingly pragmatic cost cutting measures that slowly erode the customer experience until the frog has been boiled.
2. Listen to the customer. Tailor the offering. Repeat.
Harper quickly pointed out that the most important strategy in his changing industry is understanding that every retail location is different. His team wants no two malls looking the same and they carefully listen to local consumers and tastes to create the best offerings for that location.
The CEO described one mall location outside of Eugene, Oregon that was 80 percent vacant with the star tenant being a batting cage. The mall was getting stomped by a strong regional mall only a few miles away. After adding a strong grocery anchor and hot food properties like Panera and Chipotle, the mall experienced a rebirth–because Harper and his team understood what the location required.
The company revitalized a Carlsbad, California mall that sits two miles from the Pacific ocean by bringing in what the area lacked and molding the redesign to be a mirror image of coastal California.
Still other regions are thriving through an interesting mixed use concept where residents can live, work, and play with shopping, dining, entertainment, living, and working spaces all in one place.
Not your father’s mall.
But listening to the customer and tailoring solutions to segments within never goes out of style.
3. Know the difference between change and crisis.
Harper and his Rouse Properties team could easily panic amidst the prophecies being foretold about their industry, engaging in over-reactive knee jerk executions. But instead, see numbers one and two on this list. They know experiences will always matter and if they listen to changing needs and tailor accordingly, full-on crises become fully healthy change.
4. Embrace, not evade, your biggest threat.
Some reports indicate that by 2030 online sales will have more than doubled from its current approximate ten percent of total retail sales.
Maybe, maybe not. For certain though, brick and mortar barons can’t bury their heads in the sand and assume the online threat won’t influence their world. So Harper and his team fully embrace the omnichannel reality and most certainly account for the role of cell phones in the shopping experience in their malls.
Embracing, not evading. Being creative, not cringing. Are you doing the same with whatever hairy beast threat you’re facing?
The bottom line is that there’s more to the bottom line of what’s being reported on regarding the future of these Cathedrals of Consumption. So borrow from the land of kiosks and Cinnabons and roll with the changes, before changes roll over you.
This article by Scott Mautz also appeared on Inc.com. To read more Inc. articles by Scott Mautz, click here.
Hi Admin, Thanks a lot for sharing such an important article, in fact I was looking for this since long. I hope like me many other readers will be benefitted reading this article.
Thanks! Much more to come!
Scott