Shopping Switch from Malls to Main Street
When you visit a shopping mall these days, you see few customers. Reasons for the lack of foot traffic include the growth in online shopping (projected by Statista to reach $347 billion in the United States in 2015) and the unsustainable amount of retail square footage per person. Mostly, however, the lack is because "malls are boring," explains Pam Danziger, luxury-market expert (unitymarketingonline.com).
Retailing is an industry in which "too big to fail" does not apply. "The big-box experience is beginning to show fatigue," says Danziger. Trends of specific mall-anchor stores shopped in the past three months by VALS™ (VALS™/GfK MRI fall studies) explain why JC Penney, Sears, and even Macy's, are closing stores in efforts to find the right balance between revenue (sales) and operating costs (brick-and-mortar facilities). Even Target and Wal-Mart—big-box, nonanchor stores—show declines in foot traffic.
The most active US shoppers—Innovators and Achievers—are less inclined to visit a mall anchor or other mall retailer now than they were previously. The decline among Innovators is particularly striking because Innovators make more financial transaction annually than does any other consumer group. Innovators are also the most likely consumers to "increasingly demand the special services and the products that only local, small businesses can provide," says Danziger. Innovators are more likely than other consumers to support the buy-local movement and to dine at white-tablecloth restaurants—a Main Street feature that drives foot traffic.
As more upscale shoppers defect to Main Street and more mainstream shoppers (Believers and Strivers) visit shopping-mall anchors such as Macy's, the merchandise mix will continue to shift away from items that attract Innovators to items that show the highest sell through. The change will exacerbate the shift from malls to Main Street. For luxury retailers (such as Saks Fifth Avenue and Neiman Marcus) hoping to offset declining store traffic with increasing online sales, websites' design should appeal to Innovators; currently they do not. For anchor stores that are neither high- nor low-end retailers, the future does not look promising. Although big-box shoppers will always exist, sales volume per square foot will likely need to increase to offset the decrease in high-profit customers.