Death of Malls: What does the future hold for America’s shopping centers?

FILE - In this Thursday, Nov. 26, 2015, file photo, J.C. Penney General Manager Bridie Clinkscales hands out sales papers to Thanksgiving Day shoppers as they line up outside of the store at Eastdale Mall in Montgomery, Ala. (Mickey Welsh/The Montgomery Advertiser via AP, File)

BIRMINGHAM, Ala. (WIAT) – Thousands of malls and mall-based stores across the country have closed their doors in recent years.  The massive buildings are either being left to deteriorate, or they are being transformed into wellness centers, schools, and churches.

“A real sign of the times is that we’re not seeing lawyers offices opening up storefronts in abandoned space in malls,” explained Bob Robicheaux a professor of marketing at UAB who is also on the board of directors for the Alabama Retail Association.  Robicheaux said, the question is–whether or not these new tenants can afford to pay the normal leasing fees.

Some have coined the phenomenon, The Retail Apocalypse.

“Birmingham is not immune to the problems,” explained Robicheaux.  “We have centers, we have strip malls, and we have independent parcels of land that have been vacant for far too long.  The commercial real estate business, not just the development business of it, but the commercial leasing agents are struggling to satisfy the desires to get tenants who can generate revenue for them.  So we’re not a whole lot better off, but we’re certainly not a whole lot worse off than most areas of the country.”

We asked around–and most people told us they don’t go to the malls much anymore.

“I like online,” said Tyrone Theus.  “I can just lay back and shop on my phone.  The only time I go to the mall is if I need a pair of shoes or something fast and I can’t wait for shipping.”

The internet is definitely part of the mall-killing problem.  However, experts tell us, it’s not quite as significant as you might think.

“Online shopping is really only about 9% or 10% of total retail sales,” said Kristy Reynolds, a Bruno Professor of Marketing and Marketing Department Head at the University of Alabama.  “There’s somebody shopping in stores.  It’s just a lot different.”However, the internet–and the new generation of shoppers that use it–does have an impact. For one, price comparisons are just a click away.

“Transparency is great for the consumer,” said Robicheaux, “because any time we can increase competition, that’s good for the consumer.  It’s hard for the seller to make a profit when a customer can shop around and find, ‘Oh I can have this car shipped to me from Atlanta delivered to a dealership here for less than the dealer here.”

It also speaks to our culture.

“They just don’t have a lot of free time,” said Robicheaux.  “If it’s convenient and it can save them 30 minutes, they’re all for that.”

Robicheaux explained that’s why some lifestyle centers, like the Summit, have seen a lot of success when other malls were floundering.

“It’s built for people who want to go to certain destinations.  They have a list that they want to cover and they can do that more efficiently by going door to door with their automobiles.”

According to Robicheaux and Reynolds, retail and malls aren’t dead.  There are some shopping centers that are adapting to weather the storm.  High-end malls are also doing well.

“They have a unique attraction to customers who are somewhat price-insensitive,” said Robicheaux.  “They have more time and those stores can offer brands that they can’t buy online.”

The Riverchase Galleria is also boasting 99 percent occupancy right now, according to Mike White who is the Galleria’s General Manager.

“I think we’ve done a really good job of adapting.  We don’t just have retail, and we’re always trying to move toward more of an experiential place,” he said.

The concept of offering shoppers something in addition to merchandise is important to a mall’s survival.  Quality customer service and community involvement can be major factors in a shopping center’s success.

“The ones that have compelling reasons for people to come and give experiences and have stores that have exciting merchandise–those malls aren’t dead at all,” said Reynolds.

The Galleria is bringing the first Alabama-based Dave and Busters to their building.  White said, that’s just the beginning of what they hope to accomplish.

“You’ll see this property evolve into more of an entertainment district,” he said. “You could possibly see a microbrewery on site.”  White also talked about possible tenants like the Breakout games, and incorporating more green space.

“We have a great partnership with the city of Hoover and they’re exploring everything they can to maybe bring this into being ‘downtown’ Hoover,” said White.

 

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