What's the future of malls?

As Black Friday arrives, reports suggest that folks will be spending with less gusto at the mall than in past years, as they fret about tightening credit, massive layoffs and shrinking retirement funds. And with more and more people turning to online shopping for its convenience and selection, it prompts the question: Is the mall dead?

Last year was the first time in 50 years that a new indoor mall didn't open somewhere in the United States, according to Georgia Tech professor Ellen Dunham-Jones, co-author of the book "Retrofitting Suburbia," as cited in a recent Newsweek article.

This current economic slump definitely isn't helping to fill shops and to attract merchants. According to the article, nearly one-fifth of the country's largest regional malls today are failing, Dunham-Jones says, and the International Council of Shopping Centers says a record 150,000 retail outlets will close this year.

Recent reports show that retailers around Milwaukee also are closing stores at a rapid rate. A New York-based real estate analyst released a report that shows nearly a 2% increase in the vacancy rate in storefronts in the Milwaukee area in the second quarter, according to WISN.com.

So how is it that the American mall - the most quintessential of American institutions - is in its dying throes?

According to an AP/AOL News poll taken in December 2006, seven in 10 said they would use the Internet for Christmas shopping as much or more as in past years, while 25% would rely on it less.

But why? I think it has a lot to do with the youth pushing the drive to online usage. And in an era when we're constantly on the go, many busy people, like me, turn to online resources because it's seemingly easier to compare prices and to make quick purchases.

But online shopping doesn't necessarily cannibalize in-store sales, so why aren't shoppers heading to the malls as frequently? Well, there's the obvious reason: the economy. I believe this economic slump is going to cause a great transition in the needs and expectations of average Americans. With lighter wallets and heavier burdens, we inevitably will change our shopping habits and will begin to make do with less.

Developers also are adjusting to the times. According to Newsweek, they're trying to win back reluctant shoppers with lifestyle centers, retail hubs that boast apartments, parks and boardwalks, which blend shopping seamlessly into everyday living.

One example is the Bayshore Town Center, which is laid out to resemble Main Street America with a faux village made up of a town square and home-like spaces filled with retail and dining options. There, you don't just shop. The center also flourishes with nighttime entertainment and yearround events. Because of this, such un-malls are the type that could survive the economic hard times and could trump the online market.

While Black Friday still offers plenty of sales and bargains, if Americans continue toward a quieter, more restrained way of life, it might not be long before the typical American mall becomes obsolete.

Originally published here.

Comments

[Mark]

I work at an outdoor mall in Raleigh (northhillsraleigh.com) and it's quite far from being dead. The un-mall is certainly a hugely popular destination - at least where I live/work. I certainly like it a whole lot more than a place like Brookfield Square or Mayfair.