The Demise of the Regional Shopping Mall in America
The malls fought back. Their owners built more enclosed, climate-controlled malls. They added more movies and restaurants. They introduced ice skating rinks, games, arcades, clowns, rides, entertainment, and an endless succession of promotions. Ultimately, their efforts were to no avail. These additions simply stalled the inevitable. The changes in the way people spent their time were irrevocably in play.
Mall survival dictated a host of new ideas. Marquees with words like “Discount”, “Power”, “Outlet”, and “Destination” began to appear. Some of those that were well-run are still around today. However, the traditional regional shopping mall was already on its way to the mall graveyard. But I’m getting ahead of myself.
In the early 1990s, mall owners tried a new approach. It became clear to most of them that the American landscape had enough regional shopping malls. Their focus shifted from creating new regional shopping malls to remodeling and expanding the older ones. The owners believed that if they freshened up the stock and added more shops, they could reverse the changes in the consumers’ buying habits. Not only did the new approach fail, but the mall owners’ woes were expanded by a new series of problems.
Mall owners began to have difficulty finding national credit tenants for their new stores. Many national multi-store companies stopped increasing the number of their stores. In fact, many began decreasing the number of their stores. To attract new lessees, mall owners offered financial concessions that further weakened their position.
During the early 1990s, Wall Street investment bankers saw the mergers and acquisitions business as an excellent money making opportunity. They built staff in this area and encouraged such business. Record numbers of companies began to acquire or merge with other companies. The result was that fewer national credit stores were available to mall owners. This fact added to the already difficult time owners were having finding lessees.
The 1980s and 1990s brought new competition to the mall stores. The destination-to stores emerged. Destination-to stores were the result of consumers wanting better time management for their shopping needs. The destination-to stores were stand-alone stores with names like Costco and Office Depot. This was new competition for the regional shopping malls. Malls began to lose customers to the destination-to stand-alone stores.
The return of the mail-order catalog business added more new competition. The re-emergence of the mail-order catalog business was a response to the consumers’ reallocation of their time and desire for convenience, cost, and focus. Dell Computer, Victoria’s Secret, and many other companies grew by leaps and bounds as their products began to sell away from the traditional regional shopping malls.
The 1980s through the early 2000s saw the personal computer become a part of the American household. The dramatic growth of the personal computer was the final straw that brought about the end of regional shopping malls.
Each year, the retail stores had record sales of personal computers. Unhappily, this was not good news. These were cannibalistic sales. The more personal computers the retail stores sold, the more people had access to the Internet. The more people who used the Internet, the more people began to direct their spending activity away from the retail stores.
