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What Does the Future Hold for Retail Shopping Malls?

What Does the Future Hold for Retail Shopping Malls?

More than 3000 attendees from the ShopTalk conference came to talk about the health of  retail shopping in response to recent declining quarterly sales by a number of box stores, including Macy’s, Target, and Kohl’s.  These stores are seeing the need to cater to online shoppers and those individuals looking for deals at discount shopping outlets. Some analysts speculated that Amazon could supplant Macy’s during the next year as the lead seller of apparel and other goods.

Steve Lowy, co-CEO of Westfield Group, which operates 34 shopping centers in major cities like London and New York, said “Amazon is having a massive impact…We understand the need to change and adapt.”  He said that retail shopping centers have to invest more time on technology and test new initiatives at  shopping centers in order to meet consumer demand.  Westfield is testing the idea of a “searchable” mall where shoppers can purchase products directly online from Westfield’s website, and buy 4 million products from its 250 retailers. In London, customers can use a new app at the mall to order food at the local eateries and to guide shoppers on the latest store products and sales throughout the mall.

Some trends were highlighted at the ShopTalk conference in a recent AP story:

  • The physical store is not dead, it just needs to change. Other retail stores like Target are also testing new technological innovations in their box stores. Retailers are starting to share data once considered confidential about their customer’s shopping habits, to fine tune their marketing strategies.
  • Major retailers are becoming distribution hubs. Macy’s started shipping goods to customer’s homes a few years ago, and many other retailers have followed their lead. A quarter of Target stores now ship products to shopper’s homes and are working to speed deliveries.
  • Millennials are losing their desire for name brands. This is causing problems for department stores, since much of its floor space is devoted to name brand products. Online companies, like the $400 million business Revolve, have tapped into this trend, and focus on more hip “micro-brands” that are not widely available.
  • The re-commerce economy is booming. Increasing numbers of shoppers are buying and reselling their purchases online through websites like Tradesy. The CEO of Tradesy, Tracy Dinunzio said that 88 percent of customers, check her website to see the resale value of items then go out and buy and resell them online. Macy’s is recapturing this revenue by  teaming up with thredUP, an online consignment store, to allow its customers to get Macy’s gift cards based on the value of items they trade in.

Source: Associated Press, “Physical Stores Get Major Retooling,” and “Westfield co-CEO Talks about How He’s Adapting to Change,” by Anne D’Innocenzio, May, 2016.

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