Sunday 4 September 2016

The Death Of Shopping Centres As We Know Them

A mall in the US has just announced a new key tenant. It is the Ford Motor Company, and they are not selling cars. Ford has taken over the ex department store space to locate one of its business hubs. The former retail space will become an office and this change in use is being echoed in other shopping centres across America.

Those other shopping centres are transforming parts of their complexes to accommodation and lifestyle experiences like health centres. Forbes magazine says this is part of an adjustment in consumer behaviour - a move from shopping to more experience based activities. Consumers still want to congregate and socialise but not just for pure shopping. The most obvious demonstration of this trend is in ready to eat food although there are other "entertainment" options and this would appear to be a rich source of speculation for retail centre designers and entrepreneurs generally.

So, a mall that accommodates offices, hotels, entertainment, and also allows you to buy a shirt or cosmetics, has more relevance than a mass of shops. Clearly this wasn't the plan when these malls were built so there is plenty to play out here although consumers do appear to be sending a clear message - give me a good reason to congregate, enhance the experience, and I will join the party, but pure shopping doesn't do it anymore.

The mall in the US that inspired this story is in Detroit. The two storey department store that Ford is taking over was a Lord & Taylor site and has been vacant for some time. Other anchor department stores operate in the mall although a Saks Fifth Avenue store was recently demolished to make way for restaurants.

Consumers are looking for a variety of stimuli from their retailing destinations and it will be important for retail centres to have the flexibility to adjust. Does this mean that shopping centres will be based more around smaller independent and flexible retailers in the future? Hell, we’ve been doing that for decades at QVM although the transition in malls doesn’t exclude smaller size chain operations and that is still a bone of contention at our market.

By Greg Smith