According to a June report from Credit Suisse, 8,640 stores will close in the US this year, and Westfield, owner of 35 such centres in the US and UK is no exception, the Business of Fashion reports.
“The word 'mall' is a dated word,” co-CEO Steven Lowy told BoF. “It’s been lost in the vernacular.” In order to reinvigorate the mall, making the word relevant once more, Westfield’s new strategy hypothesises that despite e-commerce disrupting retail, humans still want to interact.
The result, then is a new kind of shopping mall, based around the idea of becoming a community hub, with restaurants, gyms, and cinemas that offer an immediate benefit that the internet cannot.
“Changing consumer behaviours, attitudes and technologies have drastically altered expectations for a shopping experience, and we are facing this trend head-on by transforming our mall assets into community hubs, with varied offers that service each of our communities’ specific whole-of-life needs and aspirations,” Sky Fisher, head of strategy at QIC Global real estate told the publication.
Similarly, mall owners and brands have had to reassess the purpose of a brick-and-mortar presence. Lowy is prepared. “We all just need to evolve and not really care if the store is a store or a showroom,” he said. “We’ve just got to do what the consumer wants.”
But this has required mall operators like Westfield to scale down operations and double down on its highest performing assets. “Ten years ago, Westfield had 69 shopping centres in the United States, today we have 33 and two in the UK. We probably will have quite a bit less over the coming years,” Lowy said.
The word Amazon is never far away from discussions of retail disruption. However, the effect has been particularly acute in the US, where a recent Forbes article noted that America is absurdly over-built with retail space.
In May, a report from JJL, contested that claim, arguing that retail space is “under-repurposed” to account for changing trends and to serve people the food and entertainment that – once pit stops and distractions – are now the reason to go in many cases.
In a story about Bluewater shopping centre in Kent UK by the FT, retail consultant Richard Hyman noted that the challenges for malls are indicative of a “fundamental structural change” in retail, which will be “painful and it is going to last for some years”, he added.
Sourced from Fortune, Business of Fashion, Forbes, Financial Times; additional content by WARC staff