I tried to write a post before Christmas about the demise of retail. I had noticed, while trying to do Christmas shopping especially in bookshops, there is just less variety in retail stores than I remember compared with several years ago.
The large chain bookstore in town is display fewer books but has diversified into games, toys and stationary. Also two of the specialty bookstores in town have closed in the past year. I expect that online shopping is really hurting bookstores but the one remaining specialty bookstore is thriving. They are providing good service and products that people want to buy.
Anyway, I've just seen this article in the New York Times about the death of malls. It's an interesting read although the article doesn't really reach any useful conclusions. It's the sort of article where BuzzFeed would've just given it the headline "13 sad reasons that malls are dying in America" and simply shown the depressing photos of decaying malls.
“It’s depressing,” Jill Kalata, 46, said as she tried on a few of the last sneakers for sale at the Athlete’s Foot, scheduled to close in a few weeks. “This place used to be packed. And Christmas, the lines were out the door. Now I’m surprised anything is still open.”
I would agree that retail is struggling but I don't think the death of malls is looming upon us just yet. There are definitely problems that the industry will need to address if it is to come back. Malls are seeing a downturn for several reasons:
- difficult business climate in general, following the property bubble and global financial crisis starting in 2007
- increased competition from online retailers such as Amazon
- significant retail competition causing some dated malls to suffer
Are physical retailers going to buckle under the pressure from the internet in the same way that the music industry has? Or are they going to provide a compelling advantage over online shopping?
This doesn't really seem like a systemic problem to me yet, but I expect online competition will only increase. I'm not optimistic that retailers and mall owners know how to handle disruptive competition from the internet.