The world is changing, and it’s changing fast. Internet was popularized in the late 1990s, standardized at the beginning of the 21st century, and now almost mandatory in 2015. I conduct my banking, shopping, socializing, gaming, and information seeking almost solely online. Removing my internet at this stage would completely destroy my way of life. So I pose this shopping-specific question: Will the power of internet completely replace malls in the not-so-distant future? And if so, is there a prediction when this will happen? Let’s analyze (source)!
10% of sales are online 15% of malls are 10-40% vacant 2% of malls have gone bust and 4% are gravely in danger 80% of US shopping malls are considered healthy (dropped from 94% in 2006)
According to those numbers, shopping malls seem to have taken a small hit, but are otherwise, “A-ok”. But what about in 10, 20, or even 30 years?
Before we analyze this, let’s consider the news from the largest US online retailer, Amazon.com (source):
“Online retailer Amazon.com will open a physical location in downtown Manhattan in an attempt to further compete with brick-and-mortar stores such as Barns and Noble”
Why would Amazon do this? There must be money in brick-and-mortar stores, right?
Let’s dig further and get some actual statistical information – Let’s get Down 2 the Numbers (source):
Forecasts suggest from 2012 to 2018:
Total store numbers will fall by 22%
Share of online retail will rise from 12.7% to 21.5%
Ouch! From these stats, it’s quite apparent that online spending will continue to increase, and thus, negatively affect shopping centres.
It’s my opinion, that in order to survive, shopping malls will need some form of incentive. Whether its location, ambiance, or a unique attraction, people will need an enticing reason to continue traveling to shopping centers. Only time will tell what those reasons are.
MPS Verdict = Online shopping grows. Shopping malls shrink. Both continue to exist!