Last year marked the implosion of bricks-and-mortar retail, with many stores closing and some retail chains going under entirely. It was all but universally acknowledged that the U.S. consumer’s shopping behavior had reached a major inflection point, with online shopping and sales becoming the method of choice.
But what happens to malls and stores in the digital age? What’s their future? It’s very likely to be the reinvention of bricks and mortar, rather than death. After all, retail sales still occur in stores. According to Curbed, while 10,000 stores closed last year, 14,000 opened.
Sporting organizations and teams are also going to have to adapt to the rapidly approaching digital age, especially in the post-coronavirus world where many of the games and matches won’t be possible to attend in quite the same way as they once were – or at least for the foreseeable future. It’s up to attractions in a digital world to fill the void left by our traditional pastimes in the ‘real world’ – eSports will experience a significant boom, as will online betting sites. Everything from going to work to going to the movies will change, so it will be interesting to see what becomes the new normal.
Business leadership throughout the retail sector is grappling with the new reality. Here’s how it looks.
The Mall: Foregrounding Destination
Where stores go, so goes their mega-expression: the American mall. Over the next 5 years, 20%-25% of malls in the U.S. are expected to close.
But that doesn’t mean that new ones aren’t opening. In fact, across the U.S., expensive and expansive new malls are opening. Many are designed to be aesthetic delights and function as destinations, such as a northern California mall designed by the Italian architect Renzo Piano.
They’re opening partly because the mall is transitioning from a purely shopping experience to one that serves multiple functions.
Increasingly, malls are sites of leisure activities that can’t be found online, such as eating, going to the movies, obtaining haircuts and manicures, and visiting the gym. The malls of decades past also offered food, of course, but the food courts tended to be adjuncts to an afternoon of shopping. The new malls offer every function of downtowns past, with or without retail shopping.
Many new malls are, in fact, erasing the distinctions between the municipality and retail space. Some new malls contain all or some of the local municipal offices, such as the library, the government offices, and the public senior center. Others are part of or adjacent to local infrastructure: harbors, transit hubs, and tourist attractions.
Malls are increasingly becoming hubs where municipal and other services are located, as well as shopping.
Malls are also increasingly becoming “museumed” – a term that seems to combine their aesthetic appeal and status as destination events. While the mall of old might have been serviceable for middle American shopping, the new malls tend to be upscale, with designer architecture and landscaping meant to encourage walking, lingering, and sitting, whether shopping is involved or not. People might visit the mall on a Saturday as they go to a museum: for visual splendor, people watching, and a cappuccino.
The Store: Augmented Retail
And what about the U.S. bricks-and-mortar store, whether in a mall or standing alone? Well, many observers think the future of stores specifically is “augmented retail,” a blend of the physical with the digital.
Stores are likely going to increase the use of digital methods as part of their services and display. Customers might use voice-activated assistants, for example, or be treated to holographs displaying merchandise that changes according to their preferences.
But many observers also point out that people still like to shop in physical spaces. While 70% of high-end purchases are influenced by online window shopping according to the New York Times, for example, 75% of sales happen in bricks-and-mortar stores.
Stores are also drawing potential customers in with events – even stores whose presence is primarily digital.
So, in short, physical retail continues. It’s just transforming and becoming simultaneously more digital and more insistently a physical destination.