Malls may be changing, but they are hardly dying, writes Motley Fool contributor Travis Hoium. On the contrary, malls are benefiting from the very retail revolution that was supposed to replace them.
Malls are reinventing themselves, embracing innovative new retailers, becoming showrooms for brands, and adding on new uses, Hoium observes in an article titled Why Malls Are Thriving in an Era of E-Commerce.
“The death of retail and malls in general has been predicted for more than a decade, but, in reality, malls are a great place to reach customers”
The numbers tell the story, says Hoium, citing figures from Reis showing that mall vacancy rates are unchanged from what they were a year ago and that they remain significantly below their peak of 11.1 percent in third-quarter 2011. Rents, meanwhile, have risen.
“Vacancies and rents aren't improving quickly, but they're steady, and that's notable at a time when former stalwarts like Sears, JCPenney and Macy’s are shutting down millions of square feet in malls across the country,” Hoium writes. “While anchor locations are struggling, vibrant innovations are taking place inside malls.”
Malls are ideal showcases for retail brands and for online concepts wishing to grab the attention of potential customers.
“The death of retail and malls in general has been predicted for more than a decade, but, in reality, malls are a great place to reach customers,” Hoium writes. “A mall is a central location where thousands of customers can be exposed to a brand and experience products in person. That's valuable to lots of retailers, and the fact that we're seeing online retailers become tenants at malls shows that the Internet isn't going to kill the mall after all.”
By Edmund Mander