Whether its entire chains going under like Toys-R-Us or still-treading-water chains that are just closing lots of stores, the online shopping experience is crushing location-based retail. And for the most part I say – good riddance! For consumers this is pretty obviously a good thing.
But it got me thinking about the retail spaces I see vacant now. I drive by an old Toys-R-Us location pretty regularly. I see a closed-down Sears. There’s opportunity there.
Obviously any real estate is opportunity in some sense, but I was thinking about what you could do with those spaces that would require a minimal level of conversion. Sure, you could bulldoze the whole thing and build an apartment complex, but what could you do with those spaces mostly as-is?
There are many, many businesses that will be location-based for the foreseeable future. Consider a modern American mall. If the one in your town is anything like the ones near me (I’m from New Jersey, the Land of Malls) then it’s probably 75% filled with exactly the kinds of retail chains that online shopping is crushing. But that doesn’t have to be the case!
There are two categories of businesses that I almost never see in a mall, but they strike me as obvious choices. One category is businesses that sell items you want to try first. Take mattresses, for example. While lots of people buy cheap mattresses online, as soon as you get to the more expensive price points people really want to lay on one and make sure it’s comfortable before committing to the expense (or hassle of navigating even a free return policy). As a result, mattress stores are still very ubiquitous, but I never see them at a mall, even though the space is certainly sufficient. Maybe it’s an issue of price point – mall real estate could well be much more expensive than that lot on the interstate, but if malls are failing, surely eventually the price will equalize. Guitar (and other instrument) stores strike me as another like this – my musician friends often tell me that they wouldn’t buy an expensive instrument that they couldn’t play first. And so on.
The other category, of course, is services. You can’t order a haircut online. Amazon can’t deliver you braces (yet). Many dentists are in professional office parks – but would they see more traffic in a mall? (Currently – probably not. But malls at their historical height of popularity?)
I’ve also thought about ways traditional retail providers could keep up with the online shopping surge. Imagine traditional retail spaces not as stores, but as showrooms. You go to a clothing or makeup store and you can try on whatever you want, but if you like a product you just scan its tag with a convenient app on your smart phone, and it’s added to your Amazon cart. No transactions are made in the store – Amazon handles all fulfillment. The result is that customers can still try on clothes, see what makeup actually looks like on their skin tone, find out what that bath product actually smells like, etc., but stores don’t have to handle transactions, they have probably a tenth or less of the inventory management headache (they only have to re-order damaged product or samples that run out, not constantly re-stocking sold items) and thus need less space overall (or the same amount of space could hold a much greater variety of products for display). Theft would be far less of a concern – it’s easier to spot shoplifters when in theory no product should be leaving the store, even legitimately. And no cash on-site means far less potential for robberies as well (although malls inherently provide more safety in that respect as well).
So imagine a mall for the 21st century. You walk in and there are a variety of services on display – barber shops and dentists, massage parlors and painting studios. Fun things like Escape Rooms or even mini-movie-theaters. Mattress stores, guitar stores, and other things like it. Plus a dozen or more small retail showrooms for jewelry, makeup, candles, what have you – all with the app-based setup.
And of course, always the food court.