America has had a long-standing love affair with the shopping mall. As the way we shop changes every day, it is interesting to note the changes that this icon of American culture has gone through in the past several decades, and where it is headed now. The threat posed by the Internet and increasing closures of big stores is raising speculation about the death of the mall. I think it’s not so much a death as much as it is a rebirth. The physical store is not dying, just merely adapting to the changing times. Whether it is High Street, 5th Avenue, or the suburban mall, they are all going through a transformation.
What is a shopping mall? A shopping mall is a fully enclosed structure composed of department stores, restaurants, movie theaters, and more. One of the first shopping malls was built in Michigan in 1954 – The Northland Center Mall in Southfield. Victor Gruen (known as the ‘father of the shopping mall’) designed it as an all-encompassing space in the suburbs where families would have access to shopping, entertainment, as well as a chance to connect with the community.
The shiny new parking lot and charming cars make for an ideal image of aspiration and community in the post-war era. In a recent series that NPR did on the evolution of the shopping mall, an argument was made for how the growth of the shopping mall adapted to the automobile, especially in the case of Detroit, since the automobile industry developed the city. Instead of always having to go into the city (where parking is not always that convenient), people drove out to a mall near their suburban homes.
Since we are a company based in Seattle, it’s only fair to take a moment and indulge in the history of the Northgate Mall, one of the first regional shopping malls. This image from 1961 shows the labyrinth of highways and civilization that exists around it.
The nationwide highway and freeway system was sanctioned under President Eisenhower’s regime, making transportation even easier and more convenient. Between the 1950s and early 2000s, over 1500 malls were constructed. The fall of the economy saw the fall of the shopping mall as well. It was no longer sustainable to build these behemoths.
Today, we know this type of shopping as destination commerce or single channel retailing. Shoppers go to a physical location in order to make a purchase. The seller is in control here as the physical store is the only point of access for product discovery and browsing. The rise of the Internet is a major contributor to skepticism about the shopping mall’s future. Increased connectivity through smart phones and related devices has made commerce pervasive. Now, every interaction with a consumer in the physical world or online, is an opportunity to inform, educate and sell products. The consumer is no longer dependent on the physical store, but businesses reach out to them.
In this new era of shopping, the consumer is in control. We can discover products through infinite channels – online, in-store, on social networks, through social shopping sites, interactive storefronts etc. The shopping mall is not a longer a place that just facilitates the distribution of goods. It is a place that is expected to deliver superior shopping experiences. The experience has to be compelling and beat the convenience of just placing an order online on the way back from work, or lounging around at home on the weekends. Millennials are always connected. They need the right kind of motivation to go out and visit the shopping mall.
One of the ways for businesses to provide this motivation is by delivering a consistent experience across the infinite channels that consumers use to connect with them. If the offers and promotions are well-coordinated, it builds a relationship of trust. Say a consumer shows interest in a product while browsing online but doesn’t buy it right then. If that same consumer is in the vicinity of a physical store location and gets a push notification (with permission) about the availability of the product in the store, they would be motivated to go ahead and complete the purchase, my point being that the in-store experience has to offer something superior and memorable.
The closing of physical locations of big name stores like JC Penny and others is surely concerning. But it doesn’t necessarily indicate the death of the shopping mall. We have seen a re-allocation of resources and how department store chains like Nordstrom and Macy’s are adopting the infinite channel approach and focusing on making the shopping experience more satisfying. For instance, Nordstrom features their top pinned products from Pinterest in physical stores. This kind of consistency makes the experience of browsing more fun and engaging.
While it is easy to feel nostalgic about the romanticism that is attached to these pictures, it is important to acknowledge that the change is happening and we are living through it. The physical store is going through a rebirth. What it promises is more convenience, more delightful experiences for the consumer, a higher amount of relevancy, personalization, and “wow” factor. In subsequent posts, we will cover these exciting changes that are shaping the future of shopping and redefining the physical store.