Is Digital Commerce the Key to Saving Shopping Malls?

February 5, 2016         By: Steven Anderson

The idea that digital commerce might be the key to saving them is almost like suggesting that cyanide is the cure for prostate cancer; that which should be fatal is somehow a potential saving grace instead is almost ludicrous.

Some are advancing the notion that digital commerce might save shopping malls, and the idea isn’t all that crazy.

Occupancy rates are on the decline, foot traffic is following, and all roads seem to be leading away from the mall. Some are advocating a change in mall design, making it less about retail and more about experiences like food courts, night clubs and amusement venues.

That’s not out of line, but a new philosophy is making some sense: using mall space as a means to give online retailers an opportunity to build in the real world without requiring a full-time physical operation. Occupancy rates actually saw a slight uptick in the fourth quarter of 2014, reaching a level that hadn’t been seen in the United States since somewhere around 1987.

Essentially, the online retailers are using brick-and-mortar operations as a supplement to online operations, part of a larger growth strategy.

Showrooming has long been a problem for brick-and-mortar operations, but it’s an advantage online retailers need.

By offering a physical space, there’s a place for customers to interact with goods hands-on before making purchases. Showrooms, small shops and the like allow that physical connection with products businesses need to affect growth, and if people interact with a product in a store, ask questions, then go home and buy it online later, that’s still a sale for the store, regardless of when or how.

It’s almost an inevitable offshoot of the omnichannel experience, and one that’s increasingly necessary for stores to take advantage of.

Whether this will be enough to turn the mall around or not is unclear, but it might. Couple it on with a change in overall mall shopping to focus on experience rather than retail and those giant shopping venues might still have a place in our economy. A different place, maybe even a lesser place, but a place nonetheless.