Retail Sales is on the Upswing, Then Why are the Malls Dying?

Monthly statistics from the US Census show that U.S. retail sales are consistently growing at a modest rate, yet shopping mall vacancies and closures are the highest in the last seven years (WSJ 2018). Experts blame the downturn in shopping malls on e-commerce, but online sales account for only 10% of US retail sales – the remaining 90% occur in brick-and-mortar stores. Yet, another conjecture blames ‘shopper boredom,’  but that runs counter to the popularity of open-air, lifestyle centers. 

In a guest column on RetailOperationsInsights.com, Profs. Rosenbaum, Ramirez, and El-Manstrly propose and test another hypothesis – shopper concern for personal security in enclosed malls. Videos of people in dangerous situations, trapped in enclosed spaces – malls, airports, movie theaters, are frequently on news broadcasts, trending on internet websites and social media – have a chilling effect. leading to shopper’s avoidance of enclosed shopping malls.

They tested their hypothesis empirically, with groups of 150 shoppers watching three short videos of a typical mall journey, one without any shoppers present, second with few shoppers and third with many shoppers. Neural activity of 450 shoppers was measured using the EMOTIV Epoc+ 14 Channel Mobile EEG device on six cognitive metrics – engagement, excitement, focus, interest, relaxation, and stress.

Their results show that shopped viewing a shopping experience with many people present lead to increased stress, lower excitement, decreased focus which induces place avoidance. What can mall owners and their retail clients do to address this issue? Can use of color, open spaces, glass ceilings/domes in enclosed malls attenuate the fear consumers experience? What role do security symbols (prominent signs of alternate/multiple exits, bag checks at entrances) and third-party certification play in lowering anxiety associated with a mall visit?

This post is an adaptation of RetailOperationsInsights.com Guest Column, “The Politically Incorrect Reason to Explain the Death of Enclosed Malls: It’s The People,” October 1, 2018.

This entry was posted in Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Privacy and Identity Theft Issues, Uncategorized and tagged , , , . Bookmark the permalink.

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