In this episode of Brick & Data:
- The Mall is Not Dead (so they say)
- Holiday experience and convenience
- Is Amazon’s 2nd HQ coming to your city?
Revenge of the Malls!
From the Fung Global Retail Tech report:
- Malls are still relevant, but the US is over-malled and overstored. Increased competition from e-commerce, a lack of differentiated product, and a consumer base that is searching for value and craving experiences are forcing malls to transform in terms of format and offerings.
- Department stores, which have traditionally served as mall anchors, have seen sales fall by 40% since 2000. These stores used to serve as one-stop shops for the entire family, but what was once a strength—mainstream appeal—is now causing trouble for some retailers. Already this year, 251 department store closures have been announced, and more are expected.
- In the 1990s and early 2000s, consumer preferences shifted toward specialty retailers, which are now ubiquitous. Off-price and fast-fashion retailers that offer lower prices are thriving.
- Store closures and bankruptcies have accelerated in 2017, in part due to the challenges that malls are facing. As of mid-May, the number of announced major US store closures this year was already nearly double the number of closures announced in all of 2016, and 10 major US retailers had already filed for bankruptcy.
- The good news for mall owners and retailers is that although consumers are shopping differently, they are still shopping. Retail sales were up 4.5% year over year in April and more than 90% of purchases are still made in physical stores.
Holiday Experience and Convenience
The four top trends from NRF’s Holiday Planning Playbook:
- More online wishlists – NRF’s survey indicates that notes and wish lists might be transitioning to the digital stage. According to the NRF, 63% of shoppers would like to use online wish lists to help organize their gift purchases, although only a quarter of respondents currently use online wish lists. That being said, 47% of respondents said they will look in physical stores to find the perfect gift.
- Transparent return policies and reviews – Transparency is key for retailers heading into the holiday shopping season. Not only do customers want transparent and generous return policies, but many of them will be taking into consideration customer reviews (whether good or bad) before they buy a product.
- Personalized recommendations and purchase guides – Over half of the survey’s respondents (54%) used a retailer’s recommendations when making their lists last year and that same percentage started researching for their holiday gifts in October.
- Convenience – Almost all (90%) of the NRF’s respondents admitted that some aspect of their experience convinced them to make purchases that they were otherwise hesitant about, with the majority (64%) citing free shipping as the catalyst for their purchase, while half cited limited-time sales or promotions and 33% named buy online, pickup in store capabilities.
Is Amazon’s 2nd HQ Coming to Your City?
In its proposal, Amazon said it’s looking for a city of more than 1 million people with an international airport, mass transit, quality higher education, an educated workforce and a solid business climate.
This of course has lead to each city representative trampling over each other to get their city on the list.
“New York City has the most innovative and diverse tech sector in the nation,” said Anthony Hogrebe, a spokesman for the New York City Economic Development Corp.
Boston Mayor Martin Walsh immediately jumped into the ring, too. “If Amazon wants an East Coast headquarters, I don’t see any city better in America than Boston, Massachusetts,” he said.
In its request for proposals, the company wasn’t shy about asking states and cities to cough up incentives — from donated land to breaks on taxes and fees to relocation subsidies.
Amazon said it was seeking proposals by Oct. 19 and would select the location next year.
Did you know we will be at Shop.org in LA this September 25-27? We will be recording live! Come see us. If you haven’t yet registered, be sure to use code ‘BRICK10’ to get 10% off your registration.