Can the Dying Mall Culture be saved with Omnichannel Retailing?

With social media outlets such as Tumblr and Instagram encouraging creative and innovative style and design expressions, people are now rather choosing the uncommon over the deja-vu, when shopping. Searching for niche boutiques and discovering trendy neighbourhoods is now a norm, especially, among the younger trench of the market. And as a natural consequence, the mall culture is suffering. The sector, which witnessed a flourishing era in the 1990s is now losing its luster. Aside from that, it is also obvious that e-commerce websites are offering many substitutes and a great added value over traditional retail outlets, which is making physical spaces inside malls look less attractive and their presence less relevant.

Year 2007 marked the first time since the 1950s, that a new mall wasn’t built in the United States, and between 2007 and 2009, 400 of America's 4000 biggest malls permanently closed. The reason behind this set-back in the mall expansion and even the dying signs of this business comes in several forms:


According to Bloomberg, teen centric brands such as Aeropostale and American Eagle Outfitters are significantly decreasing their retail presence to around 14 to 28 percent of their current stance concentrating on smaller spaces and compensating this decrease through digital presence. Naturally, with such big retailers backing out from mall space, the latter will greatly suffer because of lack of occupancy and deteriorating relevance of presence. Most of the price touch-points of such brands is relatively low and sizes are standardized, making them perfect candidates for e-commerce success.

Digital World

Instead of taking inspiration from window displays, as was the case traditionally in the peak of the malls' popularity, most inspiration is now taken from blogs and digital outlets, especially, when talking with the teenagers. Therefore, the option to shop introduced in several social media outlets and blogs made e-commerce all the more relevant with endless options, just a click away. The mall has become a gathering place but still, is it exciting or profitable enough just as that?

Failure to innovate

There was little to no difference in the way malls have evolved over the years. Spaces have been kept the same with retail expansions based on retailers' own strategies and outlooks. Food courts have been also a main focal point in any mall’s architecture, although the type of food has evolved over the years, however, the concept has remained the same with the presence of individual stand-alone restaurants. The target market of shopping malls has been trenched between families, teenagers and boomers in their golden age. The big trench of the market that malls have failed to cope with is teenagers. Malls used to be a hanging zone where friends meet, shop and eat. However, nowadays, teenage behaviour has changed giving the digital world a much bigger importance. Teenagers have become in the loop of the latest trends and are presented with very wide options online that they might consider the mall dull and outdated. Therefore the Omni-channel experience essential to bridge the gap nowadays between digital and physical outlets is missing in the shopping malls, making it practically impossible to innovate in the current marketplace.

Hope for revival

Even though the situation looks gloomy for the future of malls, there is still hope for revival. Companies such as Westfield based in San Fransisco, are trying to incorporate and converge digital shoppers with physical retail. Therefore, giving retail spaces a complete makeover is the answer for such revival and innovation. The customer must be given a reason to leave the easiness of his couch and computer in order to go to a physical store and perform his shopping.

Another company innovating in retail spaces is Seattle-based Hointer, mainly innovating in inventory management and storage giving the retailer the option to display only one item and through an integrated scanning system be able to provide the customer with the size and color according to their requests. Adding to that, cash registers will no longer be present with transactions, which can be effectuated through tablets held by shop assistants.

The case of Gap

Gap, for instance, is working in the right direction in incorporating the digital world with it retail outlets. The first step taken in doing so is equipping their staff in store, with mobile devices that are able to track inventory and stock to directly answer any doubt a client in store might have. This feature also allows direct shipping through e-commerce in case any item is not available in stores. This gives the opportunity for Gap to capture the client entering its stores across different mediums, insuring his/her satisfaction.

Another bridging point, which created a big difference for Gap is to fill the gap between a flagship store such as the one on 5th avenue in New York, and a smaller store in a suburban store, is the online world. It has created for the brand a unified experience through offering the option to shop the same collections and colours which are much more abundant in flagship stores than in regular smaller stores. This unified experience solidifies the brand’s image and strength in the consumer’s attitude.

Along with this new strategy, Gap has also accessible Wifi at its store fronts, which enables visitors to easily access those new features. Also during the busy holiday season Gap introduced a wish list option on its e-commerce platforms all across its brands like Banana Republic and Old Navy, allowing the shopper to gift the whole family from its different brand extensions. Those wish lists can be also shared across social media as an extra feature which makes shopping for gifts a sure bet.

This new strategy is, in fact, contributing in reflecting a positive financial result for Gap Inc. 

According to Fashionbi database report on Gap Inc. Financials, the total income and gross profit are at a steady increase from year to year, which proves that this strategy is turning out to be effective and very profitable.

Whether a brand is ready to innovate in its retail environment and incorporate it digitally is no longer a matter of choice. It has rather become an indispensable need, which completes the customer’s omni-channel experience and reinforces the brand’s image.

Need an effective Omni-channel strategy to drive your brand's growth with effective offline and online incorporations? With combined budget = lesser investment = maximum returns? Read on Fashionbi's Omni-channel retailing #1 and Omni-channel retailing #2 marketing researches.

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