{"id":6253,"date":"2021-10-29T13:22:57","date_gmt":"2021-10-29T13:22:57","guid":{"rendered":"https:\/\/www.tellermate.com\/us\/?p=6902"},"modified":"2021-10-29T13:25:33","modified_gmt":"2021-10-29T13:25:33","slug":"little-shops-of-horrors","status":"publish","type":"post","link":"https:\/\/www.tellermate.com\/ca-en\/news-and-resources\/little-shops-of-horrors\/","title":{"rendered":"Little Shops of Horrors?"},"content":{"rendered":"
\"Rolling

Rolling Acres Mall in Akron, Ohio. Photo Credit: Seph Lawless, 2015.<\/p><\/div>\n

We\u2019re nearing the end of spooky season, but at hundreds of malls in the US, it\u2019s always like this. For nearly quarter of the 1,000+ malls in America, a permanent spooky season is on the horizon.<\/p>\n

There is a phenomenon behind abandoned mall photos. Perhaps it\u2019s the juxtaposition of an area that was once lively and bustling now sitting dormant and having succumb to the elements. Just in the United States, nearly 25 percent of traditional shopping malls<\/a> were expected to close by 2022, and these are pre-pandemic numbers.<\/p>\n

YouTuber Dan Bell has\u00a0nearly 600k subscribers to his channel where\u00a0he posts his\u00a0\u201cDead Mall Series.\u201d<\/a>\u00a0Perhaps some of the creepier videos\u00a0are the malls that are half dead, but still have a handful of shoppers and stores open. The malls sit nearly abandoned and boarded up\u00a0except for\u00a0a few stores, yet the traditional mall instrumental music\u00a0still\u00a0plays,\u00a0and the lights are\u00a0either on or flickering.\u00a0The comments are an\u00a0eclectic\u00a0mix of\u00a0people feeling true nostalgia for these spaces and others saying the dead mall videos are soothing.<\/p>\n

Regardless of how malls look the present, they all had a similar fall. While there is always the debate that the internet is replacing malls, with the internet, many still have value and great opportunities for retailers. Let\u2019s look at ways mall stores can both innovate and capture the past to stay alive.<\/p>\n

The Times They Are a-Changin\u2019<\/strong><\/h2>\n

I have fond memories of a shopping mall. My first mall memory? Standing in line to buy Beanie Babies. However, the days of electric apple roll-on glitter from Bath and Body Works, a mall pretzel and a pound of candy from the Sweet Factory are long gone.<\/p>\n

It would be hard to find a parent that would drop their\u00a013-year-old and friends off at a suburban\u00a0American\u00a0mall today and say, \u201cHere\u2019s $10, I\u2019ll be back at 3, meet me outside the food court!\u201d Safety concerns have changed drastically over the years, and malls are one of the hardest hit places.\u00a0Couple that with changes in consumer behavior and the traditional business model of a mall has been turned on its head. They need to do more to attract and retain retailers than ever before.<\/p>\n

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Food Court at White Flint Mall in Maryland. Photo Credit: J.S. Graboyes, 2014<\/p><\/div>\n

Market Correction<\/strong><\/h2>\n

If we were to ask a magic 8 ball in 1995 about the future of malls, we could likely have gotten a, \u201cReply hazy, try again,\u201d or an, \u201cOutlook not so good.\u201d But would we have believed it?<\/p>\n

Between 1956 and 2005, 1,500 malls were built in the US. The post-war 1950s economic boom of the middle class and Eisenhower’s Federal Aid Highway Act lead to a rise of suburbs and access to a new life outside of city centers. A Time Magazine article<\/a> from 2017 estimated that there is roughly 26 sq. ft. of retail space for every person in the US, compared to 2.5 sq. ft. per\u00a0person\u00a0in Europe.\u00a0It isn\u2019t\u00a0surprising that small-town malls have struggled to keep\u00a0retailers when\u00a0a sustainable population of shoppers isn\u2019t there,\u00a0and possibly never was.<\/p>\n

In the article, consumer trends analysts suggest that the US is\u00a0simply\u00a0over retailed.\u00a0For example, Macy\u2019s plans to close 125 stores by 2023. Of those stores, 60 percent of them are within 10 miles of another Macy\u2019s.<\/p>\n

The in-<\/strong>store experience<\/strong><\/h2>\n

\"\"<\/p>\n

Many retailers are focused on fast fashion and maximizing the \u2018basket\u2019 of each shopper, but there is a greater experience to be had. When I think of an interactive mall experience, I think of a few things. There’s photos with Santa and the Easter Bunny, mall fashion shows and one that’s a bit more unconventional: Club Libby Lu. I don\u2019t think of malls as just a hub where I can buy things, going to the mall is a day out \u2013 an experience.<\/p>\n

A 2000s makeover experience, Club Libby Lu, captured the experience factor well before its time. What was unique was that many of the stores were a store within a store, but almost like a popup inside of anchor stores such as McRae\u2019s, Proffitt\u2019s and Parisian, which were part of the Saks Fifth Avenue portfolio. The experience targeted pre-teen girls and featured makeovers, costumes, fairy dust and a potion bar. Guests were known as VIPs (Very Important Princesses) in the store, and their day would cost anywhere from $25-$60.<\/p>\n

The\u00a0VIP experience sadly ended<\/a> with the recession and all stores were closed by early 2009. Although there was a lot of critique of the business, overall was a success story of its era. What was different about Club Libby Lu was its location inside of a department store, which gave it a wider audience and the ability utilize the brand power of larger department stores. We see more of these pop-up\/concession stands with the like of Kohls, Next, John Lewis, and more.<\/p>\n

The store within a store concept has also proven beneficial to\u00a0JcPenney\u00a0through their Sephora partnership. The partnership ultimately proved to be more beneficial to the department store than the cosmetics chain,\u00a0but it\u00a0undoubtedly\u00a0offered a temporary revival for the\u00a0JcPenney\u00a0brand. In\u00a0late\u00a02020, Sephora announced they would be leaving\u00a0JcPenney\u00a0for the same concept at Kohl\u2019s.<\/p>\n

Being creative with the in-store experience<\/a> pays off. Nike, a leader in the retail world, has a basketball court, treadmills and technology-enhanced athletic experiences that make no profit for the business. They know that they can sell goods through ecommerce, but building a flagship store around experience becomes an attraction and adds more power to the brand.<\/p>\n

In the Dan Bell YouTube series, of the malls that were barely hanging on with just a few stores, at least one store is an experience such as an arcade, laser tag, mini golf or a remote-control car track. Malls also present unique opportunities for attractions such as escape rooms, axe throwing and rage rooms.<\/p>\n

New Technology<\/strong><\/h2>\n

The reality is, owning a\u00a0brick-and-mortar\u00a0business, whether\u00a0one\u00a0location or 1,000 locations,\u00a0has been scary the past two years. In addition to people describing the future of the retail industry with phrases that could be seen on a magic 8 ball,\u00a0payment technology is changing. There a new electronic payment methods using just your mobile phone, but also new ways to handle your cash.<\/p>\n

In the year 2021, when many predicted we would have flying cars, many stores are still counting cash by hand and have yet to modernize their cash management. They are likely keeping an unnecessary amount of cash in-store, and armored car pickups and deposits are not built around their actual cash flow and needs. This is an easy area to see large savings that can be reinvested into the business.<\/p>\n

This can be automated through technology that you can get as part of your CIT packages, or direct from manufacturers like Tellermate. Recyclers, smart safes<\/a>, self-counting cash drawers<\/a> and desktop cash counters<\/a> provide a variety of benefits that you wouldn\u2019t expect. You can reduce overtime, improve business intelligence, and even cut your carbon footprint.<\/p>\n

\"\"

Jamestown Mall in Florissant, Missouri. Photo Credit: Seph Lawless, 2015<\/p><\/div>\n

Closing Time? <\/strong><\/h2>\n

There are malls that will thrive in the future and there are malls that will close. Due to retailers overstretching their property portfolios and changes in consumer behavior, retailers are moving out of malls. Closures of anchor stores such as Sears, Service Merchandise, Lord & Taylor in the US and Debenhams in the UK have all lead to declining confidence in the mall format. It\u2019s hard to attract a new anchor tenant when the existing one has left due to financial decline or overhead expenses. As a mall loses anchor retailers and footfall drops, it\u2019s difficult for them to attract new retailers and to regain their reputation as prime real estate. Smaller retailers know that no matter how great their store is, it is hard to bring traffic to a dead mall. This adds a level of complexity to a retailer managing its property portfolio as they need to monitor the activity of their neighbors and adapt accordingly.<\/p>\n

Learning from past mistakes<\/strong><\/h2>\n

In 2017, an 800,000 square foot mall had not been built since 2014. From 2002-2009, 37 were built.\u00a0It seems like property groups and investors in the US have figured out that traditional indoor malls are not the way of the future, but the realization came too late.<\/p>\n

Commercial real estate services firm Green Street Advisors classifies grades US malls with the ratings of A++ to D-, based on sales per square foot. Of 1,000 malls in the US, 380 are C- or below.\u00a0According to Green Street Advisors<\/a>, the malls most at risk are the B, C and D rated malls. The 125 stores Macy’s will close are mostly in malls with B-D ratings. Macy\u2019s CEO Jeff Gennette said that 65 percent of their stores are in\u00a0 A category malls, and he believes those stores and the A malls will stay and stand the test of time.<\/p>\n

CBL Properties owns 83 malls and power centers in the United States, mostly in the Southeast.\u00a0They\u00a0added a pop-up model to their lease offerings in 2017<\/a>. By 2018, they had converted 10 merchants into long-term lease agreements. Stores can test out the mall format or offer a limited time in-person experience. This benefits both the mall, retailers and customers. With commercial property management ultimately footing the bill for empty stores, retailers can look for opportunities like these to make a mall store work for them.<\/p>\n

Property groups and investors are realizing that the property boom during the nineties is not the way of the future. Due to the over retailing of the US, mall stores can best suit themselves through pop-up experiences and keeping locations in malls that have experience-based retailers. By having a clear view of the future, keeping close tabs on moves of anchor tenants and future-proofing store models, there is a path for some stores and experiences to thrive in malls, even those that are struggling.<\/p>\n

Tellermate helps retailers increase efficiency, reduce shrink and save valuable time in cash management. Learn how we’ve helped Rack Room improve their cash management and save hours each week.<\/p>\n","protected":false},"excerpt":{"rendered":"

We\u2019re nearing the end of spooky season, but at hundreds…<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[3,73,74,80,76],"tags":[],"class_list":["post-6253","post","type-post","status-publish","format-standard","hentry","category-blog","category-customer-experience","category-efficiency-improvement","category-real-time-cash-management","category-retail-technology"],"acf":[],"yoast_head":"\nLittle Shops of Horrors? - Tellermate Canadian English<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tellermate.com\/ca-en\/news-and-resources\/little-shops-of-horrors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Little Shops of Horrors? 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