We can easily agree by Consensus that Amazon has been quite successful in its quest for world domination. In the process, it has created a paradigm shift in the way we shop. Nowadays people prefer to shop for everything online as they get a greater Convenience and Variety. So the question arises is what does this mass Migration to the Online Markets mean to the traditional malls?
The Conundrum: Acquisition Spree
With Amazon’s acquisition of Whole Foods Market, Wal-Mart’s Acquisition of Flipkart and the Toys”R”us shutting its shops it clearly states that if malls don’t reinvent themselves at the earliest then they would have to face the inevitable doom.
Will Malls Extinguish – Early Signs?
According to Credit Suisse, there are around 1,100 malls operating in the US and around a quarter run the risk of closing down over the next five years. Other reports suggest that the number may be even higher.
More Stores have closed in the US than ever. (Over 6,700 stores in 2017 alone.) The question arises what can the Malls do to survive? While Technology indeed has brought Disruption to the segment and Convenience to the Buyers what it can never fulfill is the “Experience”
Due to Rapid Urbanization coupled with exponential growth in population, there’s a dire need of places where people can socialize. It’s high time that the Malls be the Social Sanctuaries they represent themselves off. So the Question arises what can the malls do to survive?
The Road Ahead – How Can Malls Survive?
Traditional Malls need to invest in services which create experiences. People are getting busier by day and malls need to be that one place where one can forget all their responsibilities and Relax. Only a few Malls have started to tread in the Path. The Dubai Mall leads the way in this aspect with a myriad of activities on offer to give the visitors a lifetime experience. They can act as a pop-up space for E-commerce websites. Malls can host Concerts, Matches etc. They can redefine themselves as hyper Curated shops which are personalized for every Customer. Traditional Malls need to understand the pulse of the people along with a smart use of technology to attract masses. For e.g. – They can set up VR centers or conduct one-off events in which VR can be implemented. Additionally, Malls also need to build alternative sources of income to support their lease earnings. They need to make more use of Digital Media, hoardings etc.
It is expected that high end shops would still prevail among the mass Migration because that it is the only segment which hasn’t been tapped or would be tapped into by the E-commerce websites because they take pride in selling the items to the customers in person and the Customer to thinks and analyses a lot before making a decision which would affect him/her significantly. So we can expect in the future that Malls only have these high-end goods store.
Presently Traditional Malls are the kernel of retail economies but they need to revamp their structure from being Push Oriented based on the 4Ps- Product, Price, Promotion, Placement to a Pull oriented Structured based on 4Es- Experiences, Exchange, Evangelism, Everyplace. Their Success depends solely on how fast they can actually unlearn the Age old Methods and implement the radical ideas. If they take their own sweet time, maybe Malls would join the ranks of landlines as something that is outdated and insignificant.