Indoor malls face extinction as streets become “the number one retail location”, according to retailers and developers at the NRF confernece in New York.
Speaking at the conference on Sunday, Rick Caruso, founder and chief executive of Caruso Affiliated, said: “Within ten to fifteen years the typical US mall, unless completely reinvented, will be a historical anachronism.”
The fact that no fully enclosed indoor malls have opened in the US since 2006 is an “indication the customer doesn’t want it anymore”, Caruso claimed. “Is the mall a compelling place for retailers to go? It’s not going to be if the customer doesn’t want to go there,” he said in Sunday’s keynote panel debate.
Caruso went on to claim that while there’s “not a lot of future growth” for indoor malls post-recession and in an era of increased ecommerce, “streets are the number one retail location”.
Blake Nordstrom, president of US fashion retailer Nordstrom, agreed with Caruso that shops with street fronts are best placed to maximise sales. “An urban environment when done right has a level of energy, excitement and choice. The customer gravitates towards that and looks for that rich experience,” he said.
Offering a first rate experience in-store is even more important as a growing number of shoppers embrace m-commerce, according to Nordstrom. “The customer has such terrific choices today literally at her fingertips with handhelds,” he said. He added shops must respond by giving customers compelling reasons to shop in physical locations.
Caruso said retailers must “expand their vision of who they are and what they do” and must make their stores “part of the fabric of everyday life” for shoppers.
The shopping centre developer claimed the traditional model of retail development has been completely upended as retailers, developers, and community members partner to create vibrant gathering places. “Shopping serves the need for community and relaxation. Physical retail is crucial for fulfilling the need for connection and community,” Caruso said.
Candace Nelson, founder of Sprinkles Cupcakes, says physical stores need to create hospitable feel. “In that short period of time the customer feels pampered and cared for,” she said.
Fashion designer Rebecca Minkoff agreed that “customers love the human interaction, and for that reason they’re so much more loyal”. Minkoff added that shoppers are looking for “direction and guidance” and bricks-and-mortar stores can provide that “two way communication”.
Retailers must also make sure they “give customers a VIP celebrity feel”, Minkoff advised.
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