Malls Are Now The Dying Retail Businesses

STREET TALK
By Mickey Howley
WVMSA Director

There’s a retailing change going on and the pandemic has rapidly increased it. It looks like the thing that really put the hurt on Main Streets back in the 1960s is finally getting its moment of reckoning, the shopping mall. Of course, not every place was big enough to have a real mall, so in small places, especially remote places, the mall effect of killing retail downtowns was slower. But still there.
But now malls are the dying retail. That was already happening with big box stores and online shopping, but the pandemic has warp speeded that in to the next galaxy. That is because malls are anchored by big department stores and those big department stores are going fast into oblivion.
Big box stores like Walmart, focusing on price and not so much status or quality, have damaged the malls as a whole. Those mall anchoring department stores catering to wealthier customers have failed, too. In addition to Sears and JC Penney, higher-end stores like Barneys New York, Lord & Taylor and Neiman Marcus have all filed for bankruptcy in the past two years.
E-commerce has increase by 45 percent this year. Online has taken off and Amazon rules. Jeff Bezos got divorced and he’s still the wealthiest person on the planet. His ex is the second richest woman on the planet. He started by selling books, I still get books from them, but who really reads anymore, it is so passé.  Books are not what is making Jeff rich.
As more Americans came online and as social media platforms rose in popularity, brands started establishing direct relationships online and through their own stores, which chipped away at their reliance on department stores for finding customers.
Brands that sell apparel and cosmetics, which are key product categories for many department store chains, are accelerating a trend to sell more goods directly to shoppers through their own stores and websites rather than through department store chains. This direct connection gives brands, whether they’re established or new startups, more control over how their goods are displayed, more information about who their customers are, and often better profit margins.
Nike, for example, stopped selling through department stores Belk and Dillard’s earlier this year and is no longer available at the online retailer, Zappos. Under Armour announced it would cut its wholesale partners in North America by 2,000 to 3,000 stores.
There is no silver bullet for U.S. department stores to immediately start thriving again, so the best many can do is simply try to adapt and survive. The malls they anchor will be cast away.
Macy’s executives have also said the company plans to test smaller stores that aren’t attached to malls in an effort to unhitch their destiny from those struggling regional malls built for a weakening American middle class.
E-commerce puts the hurt on Main Streets as well. Here’s what malls did that Main Streets also do for the human condition, and that e-commerce can’t do, which is provide a place for social interaction.
What small Main Streets have to their advantage is not only the social possibilities, but ease of travel. However, with the pandemic going stronger than ever now, all retail except e-commerce is in a real jam.