THE FUTURE OF SHOPPING MALLS? (JUNE 2022)
The Future of Malls?
I am an introverted extrovert. While lounging on the sofa I long to be out and about, and then while doing that, I crave my ‘me time’ on a couch. Of course if it was our Presidents couch I might never leave it!
The idea of going to a shopping mall has always generated anxiety, and researching if these establishments will exist in the future sparked curiosity for me.
Of course for the businesses that have shops in malls, or the owners of the buildings themselves, ‘curiosity’ is not an apt description of what their feelings might be, and the anxiety that comes with the question ‘will my business exist in the future?’.
I have heard in more than one instance that ‘shopping’ is, and will always remain an extension of a customer’s lifestyle. That is a rather bold ‘statement’ given the data available on the sector post lockdown, added with the expedited uptake of online shopping.
I believe the more important question is what will the ‘Future Customer’ be? Will the fact that malls are still more expensive and less convenient today than online shops lead to the ultimate demise of malls, and with that all the jobs and businesses they house? Whatever your opinion is I have yet to find a person who disagrees with the belief that the ‘sector’ needs to evolve if those big bulky buildings with huge parking lots are to have a place in the future or not.
The bad news is already written on the wall, malls are in decline, and many more are expected to close before the end of this decade. E-commerce is projected (depending on which report you read and the country you focus on) to account for about a third of retail sales by the year 2030. That is really soon! Can you imagine losing 1/3 of your business for an indefinite period of time, not just a few months because of a pandemic! My personal opinion (right now) is by the year 2040, e-shopping and e-services will be close to 65% of the pie.
What will this baby be like?
A good place to start focusing on is ‘omnichannel retailing’. The ‘Future Customer’ will have fleeting loyalty, and almost exclusively purchase through multiple channels, always searching for better prices, more convenience and a custom and more enjoyable experience. We can see this trend unfolding already with purchases via websites, emails, e-catalogues, call centres, social media, cellphones, home and office appliances and even gaming consoles. Remember that the Internet of Things (IoT) does not wait for you to go buy milk or a new ink cartridge, the device itself orders for you. In the future ‘shopping’ will not only be done by humans… think about that for a moment, and while you are doing that don’t forget about the Metaverse, or the next generation internet with your avatar, a version of you that explicitly wants to avoid leaving your couch and would rather go without a product or service if it means having to get into a car and seeing other flesh and blood humans!
The ‘Future Shopping Mall’ will need to have a presence in all these ‘channels’ and make provisions for engagement at whatever level they can to support their tenants and the customers who want their services. How this is achieved is the next important question. It will require the owners of malls in the near future to become ‘E-property Owners’. This means not only ensuring tenants have power, water, waste removal, a rental bill and some marketing support: it means the owner will also need to gather data and help their tenants use that information to customize their services, educating and supporting them all the way to success.
Now, if you are an owner or management of a mall reading this, and feeling all this sounds to exhausting or overwhelming for you, you will know exactly what you are up against, because the ‘Future Shopper’ feels the same way about your parking lot.
What to do? It is time for a 15 year plan. Decide: are you going to work on increasing foot traffic, or increasing spend with the customers that remain? Or do you become a hybrid and also cater for ‘e-foot traffic’? During the pandemic this was a decision many retailers had to tackle, including tenent anchors in malls, the majority of whom had made little provision for online customer needs. The fact is shoppers today are visiting less, and when they do, they try to purchase a stock pile to avoid another visit again so soon. This is an awful mindset or psyche to have to tackle for brick and mortar businesses. So, let’s get to the part of this article I hope to be most helpful, some constructive points made as a Business and Environmental Technologist.
Go into ‘adapt’ mode!
Your business will not go away totally, but you are going to take a huge knock in revenue, and at the same time have to spend vast amounts of capital within the next 3 to 5 years. Rework your tenent mix and put all ideas on the table and don’t disregard the concept of becoming ‘green’ (self-power, water and waste systems). Your mall must become an ethical and sustainable business very soon!
Go one step further, and sooner. Consider flexible rental / lease contracts. Some of your competitors will deploy hybrid rental models and even share risk, making the owner of the mall a ‘business partner’ of sorts. Of course, every coin has two sides (with exception to Bitcoin), and tenants need to evolve too. This will require ‘encouragement’ by you to get tenants to act, creating opportunities for collaboration, supporting one another’s invested interests.
There is a technology divide and gap which needs to be closed. Malls have not yet begun to tap the potential of technology. Research and be innovative. Together set out on a path of discovery, but as the mall you must take the lead in obtaining, tracking and processing data for your tenants to use. A simple loyalty card and touch screen information board are not enough anymore. Oh, and before I forget, I suggest you set up electrical charging points for the future car. If you think shopping malls have a challenge… think about all those petrol station owners!
Physical and online evolution must take place simultaneously. A website or App is not enough. You must go further, broker brand exclusivity deals and ensure incentives are offered when using your platforms to compete against larger e-comm brokers like Amazon or Alibaba. The ‘Future Shopping Mall’ will need to become a destination, value centre and a spot for innovation. They must have natural spaces and gardens, spots to be social and work. Consider pets. Your mall must be a transport hub, offer food, beauty, entertainment, health, medical, education, onsite repairs. It must be an area for ‘personal connection’ in a way the Metaverse can never achieve. Think about gyms, sports, casinos, theatres, museums and grand book shops. Your décor, look and feel, will need to change more frequently than the seasons.
“The Future Mall’ could be a micro city on its own, including accommodation, conference and meeting facilities. Then go one step further and have Police, Postal and Government services onsite right next door to the Future Bank. Many of your services, stores and experiences will need to run 24/7, so add some couches, encourage people not to go home.
Time for a little salt on this cookie. You will probably need to change some of your own ‘people’ in your management and operational team, because many will not be equipped and some might not even be interested in the concept of ‘The Future Mall’. Once you have your Change Champions ready, you must cast your vision outwards, looking to the future horizon, considering future trends: e-money, the circular and subscription economy. What influence will Automation have? Think about AI and Blockchain. What will future entertainment and sports be? What will be an important ‘social experience’ and memory in the future, and can you provide the environment for these to be made?
Good Luck! You got this!
Jean-Pierre Murray-Kline at Tencent Headquarters in Shenzhen, a Chinese multinational technology and entertainment conglomerate and holding company, one of the highest grossing multimedia companies in the World.
‘A Future Thinker’
The Business and Environmental Technologist.
Jean-Pierre Murray-Kline is an entrepreneur who runs several online businesses. He is a published Author who researches, consults and facilitates strategy sessions about the most important matters affecting our generation and the changes to technology, business and the environment.
- Digital Architect & Scenario Planning.
- Online Marketing
- Keynote Talks
But wait, there is MORE!
Who is Jean-Pierre Murray-Kline?
Jean-Pierre is a South African Serial Entrepreneur, Published Author and Change Champion who has worked in over 300 types of industries in some capacity or another. His own online businesses have generated millions of Rands and involved sectors including Law, Web & App Development, Events & Entertainment, Property, Technical Services, Media and Tourism.
He has travelled to over 50 cities World-Wide, and is extremely active as a Business and Environmental Technologist.
Jean-Pierre is often asked to be a Guest Speaker on any variety of the many subjects he continuously studies and writes about.
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