Malls to go out of business?
In another sign that the Internet is changing everything we’ve come to know, offline shopping may be delivering a death knell to malls and large box stores.
This from Jeff Jordan (@jeff_jordan), a partner at Andreessen Horowitz, a leading venture capital firm, in a post entitled, ‘Why Malls are Getting Mauled,’ shares:
A report from Co-Star observes that there are more than 200 malls with over 250,000 square feet that have vacancy rates of 35 percent or higher, a “clear marker for shopping center distress.” These malls are becoming ghost towns. They are not viable now, and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online. (emphasis added)
Having grown up in rural America, I enjoy walking through the downtown Seattle stores at Christmas time to see all the decorations and the kids in line to sit on Santa’s lap.
This year, the crowds have been markedly smaller. A couple weeks ago I asked a clerk at Nordstrom’s how they were going to sell all the inventory in the men’s department. He conceded with the small number of shoppers that day, it would be tough.
Yesterday evening, Mrs. RLHB and I stopped at a downtown watering hole after doing a little shopping (I spent all of $9). The bartender, talking to some folks a couple barstools down who work in downtown stores, mentioned that other down store workers called Christmas sales ‘tepid’ at best.
My first thought was that the economy was still hurting stores. But Mrs. RLHB reminded me that we had any number of boxes stacked by the front door — Christmas presents we bought as well presents our kids bought so they’d be here when they got home.
When I tweeted word of Horowitz post on the decline of offline shopping lawyers from Ireland, the UK, Canada, and here in the States said they did all of their Christmas shopping online.
Newspapers, shopping, music, being tethered to an office, and more. What’s next to be changed forever by the Internet?
If I am a lawyer or law firm, I start letting my mind run wild as to what could possibly change. Could you be made irrelevant as a result of your failure to connect and engage with people through social media?
Stranger things have happened. 11 years ago the general consensus was that people would not buy online en masse and that Amazon would go bankrupt.
Online stores and malls felt comfortable going with the mainstream. How do they feel today?