Big brands have been struggling to vie with e-commerce companies for years, and even established, cherished businesses like Target, Macy’s and JCPenney are facing increasing challenges. It was already hard enough to compete with the ease of online shopping, and then the pandemic accelerated that trend as people made more and more purchases from home.
So what’s the future of shopping centers? And if you run a brick-and-mortar business, how can you adapt to changing consumer demands?
Experts have been predicting the demise of shopping centers for a long time now, but the COVID-19 pandemic may have put the final nail in the coffin. Many mall retailers are drowning in debt as the pandemic forced them to close their doors for months – or forever. More than 12,000 retail stores permanently closed in 2020, according to the National League of Cities. By April 2021, the number of small businesses that were open was down by more than 33% from January 2020.
Some retailers have bounced back, but it isn’t hard to see that the traditional shopping model isn’t what it was during the heyday of shopping malls in the 1980s, ’90s and early 2000s. Coresight Research estimates that 25% of U.S. malls will close by 2025. Here are just a few of the reasons why shopping centers are becoming obsolete.
Online shopping is easier than visiting a store, especially if you’re searching for an item that’s difficult to find. Even if you can’t determine the exact product name and brand of what you’re looking for, it’s typically simple to find similar products through online stores. This often makes online purchases more cost-effective and easier than traditional in-store purchases. Add in the fact that you’re not spending money on gas or risking your health by being among crowds, and online purchases become even more appealing.
Online shopping gets businesses in front of highly targeted audiences, so it’s not surprising that Facebook, Instagram, Twitter and Pinterest all now have an e-commerce aspect. For example, let’s say someone is searching Pinterest for birthday party ideas. Thousands of pins will pop up, and many of these socially shared pictures link back to an online retail store. On top of businesses getting search-driven sales, users who have shared one of these Pinterest pictures in the first place could convert into customers in the future. Plus, as products go viral on social media and online reviews guide people toward purchases, the shopping experience becomes inherently more social even without shopping in person.
One of the reasons a shopper might prefer to visit a store in person is the customer service – which is why many e-retailers have tapped live chats for their online stores. Representatives are online to interact with customers and answer questions about a particular product or other concerns without needing to be face-to-face. Many online businesses also have FAQs pages where consumers can quickly get general questions answered. Customer knowledge systems allow people to find out exactly what they need without
Brick-and-mortar stores that have successfully survived the shift to e-commerce did so by adapting. Instead of resisting this change, these companies found ways to integrate their online and offline stores and create a seamless experience for shoppers. Let’s look at some strategies to embrace e-commerce in your business.
You’ll want to develop an e-commerce brand that both complements your existing brand and sets you apart from competitors in the online space. Make sure your company’s message is consistent both in stores and on your e-commerce website. Align your product offerings while also considering which items might attract customers more as online-only or in-store-only exclusives. Continually study the trends in consumers’ online purchase habits, and be ready to adjust accordingly.
One of the advantages of having both brick-and-mortar and e-commerce aspects to your business is that you can provide multiple fulfillment options. For instance, when customers purchase a product on your website, they can either have it shipped to their home or pick it up at your store. You can also offer curbside pickup as an added convenience. You’re fulfilling an online order but reminding customers you have a physical location too.
You can use one comprehensive software suite to manage all components of your business even as you expand into online sales. Our review of the Oracle NetSuite CRM gives a great example of such a system. In addition to its traditional CRM features, there are enterprise resource planning tools, a CPQ (configure, price, quote) module and a web portal you can personalize for customers. It has everything you need to manage both traditional sales and e-commerce.
Social media is a great way to build relationships with your customers and expose them to your products. Start by identifying which channel your target audience is using; if none of your customers are on TikTok, there’s no reason you need to be either. Once you determine the best platform, you can set up an account and begin connecting with potential customers and eventually direct them to your online and offline offerings. Don’t be discouraged if you don’t see immediate results; social media is a long game, and it takes time to build an audience. Learn more about developing an e-commerce marketing strategy.
Could the predicted demise of malls be overstated? Before the pandemic hastened their death, some experts argued in The Wall Street Journal and elsewhere that such fears were indeed exaggerated. Plenty of consumers still enjoy aspects of both online and in-person shopping, so the two options may continue to coexist or merge to create an omnichannel experience.
If you run a mall-based store, here are a few ways you can help it thrive:
Brick-and-mortar stores such as Costco have competed with e-commerce giants like Amazon by offering unique member services and giving customers the option to buy items online and pick them up in person.
E-commerce has permanently changed the way consumers shop, and shopping malls are not what they once were. But there is still hope for mall-based and brick-and-mortar retailers. By merging the benefits of online and in-store shopping, you can create a unique experience your customers won’t forget. Get started today by checking out the best e-commerce platforms.
Sudeep Banerjee contributed to the writing and reporting in this article.