By: Darrin Duber-Smith
The age of the enclosed regional mall has long been over with construction peaking in the late 1980's, a trend that began well before the age of e-commerce. This is not to say that they will disappear altogether, but only six large malls were built in the U.S. between 2006 and 2015. By comparison, a total of 54 were built during the previous decade, which means that the trajectory is clearly trending towards extinction. But has the impending the death of the shopping mall been greatly exaggerated?
Methinks, yes. Places that consolidate different retailer brands (malls) will always be around, and new construction will always be favored over old facilities. And despite the fact that only one major mall is currently under construction in the U.S., it is highly unlikely that the "mall" concept will die out entirely. Rather, many smaller, multi-use developments continue to open, especially in areas undergoing gentrification. New shopping centers are still emerging, and old locations continue to be demolished to make way for the new. It does appear that the mega-mall's final days are indeed upon us, but smaller format retail projects are still alive and well. For certain, there are far too many brick-and-mortar locations right now, and several struggling brands will disappear over the next few years. But a quick look at Amazon's recent foray into opening physical locations tells us all we need to know. Brick and mortar is alive and well.
Discussion: What percentage of retail sales are e-commerce versus brick-and-mortar? What is the e-commerce growth rate? Why do you think Amazon is opening physical locations?
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