OAKLAND, Calif. (KTVU) - A proposed merger between two mall giants—Simon and Taubman—fell apart due to the negative impact of coronavirus on business. That is a dark omen for the nation's dwindling number of shopping malls.
Coronavirus provides endangered malls with a choice: evolve or die.
Shopping malls devastated the nation's downtown shopping areas in the 1960s and 1970s. The decline began with the coming of superstores from Walmart to Costco to other so-called big box and megastores in the 70s and 80s. Amazon's online retailing is doing further damage to all of them.
Coresight Research, a worldwide marketing research firm, expects that as many as 25,000 stores will close this year, 50 to 60 percent of which are in shopping malls.
"It's a glum picture. But. I also think that the role of the mall will change and that I think is part of what's interesting. COVID has just accelerated all of that," said the company's founder and CEO Deborah Weinswig.
The pandemic may also turn out to be an efficient mall killer.
Green Street Advisors, another marketing consultancy says that of the 1,000 remaining U.S. malls, 380 are likely to fail. Though many analysts project that that would take another decade. However, consultant Jan Kniffen, a former high ranking department store executive, says that will likely happen by the end of next year if malls don't evolve fast.
"And so, we've seen a significant acceleration in buy online and pick-up in-store, eCommerce, omnichannel, live streaming. All necessary components, if you will, to a wonderful retail kind of experience. It's called 'BOPUM,' buy online, pick-up in mall," said Weinswig.
Indeed, many malls, such as San Mateo's 66-year-old Hillsdale Shopping Center, are evolving.
It just released a 36-page survey of what customers would like to see.
"If the shopping center isn't gonna be exactly what it is today, what would you envision?" said Hillsdale Shopping Center's David Bohannon II.
Consumer preferences include more dining, more open space, a park, a community theater, and housing where a train station already exists; all the while remaining a mall.
"It is an extraordinary opportunity to address the future and continue to serve our customers and our community," said Bohannon. In fact, Alameda's South Shore Center is looking at 1,200 housing units. Richmond's Hilltop Mall is doing the same.
These days, nearly everyone hungers for the days we can all go where we want and when we want, including the mall.
"You cannot replace the social experience that occurs in a gathering place," said Bohannon. For many malls, evolution is their top priority.