If there’s one thing that online shopping, with or without mobile payments, has fundamentally altered, it’s brick-and-mortar shopping. This is especially true for shopping malls, which have fallen out of vogue in recent years and left a whole lot of empty concrete shells dotting the landscape. A new report from CoStar, though, suggests that the malls that survived the dead mall upturn of recent years are starting to find new footing.
The CoStar data showed that stores that dealt in general retail or apparel—in other words, the ones most likely to be hit by Amazon—have been lowering their average lease period. The average in 2007 was six years, but now, that’s down to 4.5 years.
Bad news, one might think, but there’s an upside to this: non-traditional tenant leases have increased to an average of 5.6 years. In fact, one of the biggest new moves is taking place in the one place mall owners never wanted to see movement: the anchor store. While major stores are often fleeing mall space, leaving massive heaps of abandoned space behind, a whole new class of merchant is moving in. Movie theaters are making a play for mall space, as are bowling alleys, entertainment centers, and discount chains. Mall space is now on average a 50 / 50 split between traditional and non-traditional tenants, the report concludes.
Some doubt the long-term effectiveness of such a measure, however. Mikey Vu, retail consultant with Bain & Co., noted that this “business model hasn’t been proven out,” and further noting that “I don’t think anybody knows how to do it extremely efficiently to generate profit margins.
To which I say, of course not. This is a brand new business model in a lot of ways. Yet knowing what we know so far, and with “dead mall” content popping up all over, finding a better way to put the mall to use isn’t a half-bad idea. We’ve seen this happen already, somewhat, and giving people more access to experiences at the mall level should go a long way toward drawing customers back.
Naturally, mobile payments can be a big help here as well; whether it’s brick-and-mortar or strictly online, they’re the payments tool that bridges the gap most effectively.