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Brunell: Malls that entertain may survive

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Published: December 3, 2019, 6:02am

Preliminary sales trends from Small Business Saturday show a continuing increase in smartphone purchases even among shoppers patronizing local merchants.

According to the Associated Press, Adobe Analytics said sales via smartphone made up over 40 percent of all e-commerce revenue on Nov. 30. That is up 22 percent from a year ago. Shoppers spent $3.6 billion buying online from small businesses that day.

Small Business Saturday was started in 2010 by American Express to encourage people to shop at small retailers’ stores. It was purposefully sandwiched between Black Friday and Cyber Monday — the busiest time of the Christmas shopping season.

Adobe reported overall online sales are up 18 percent from 2018 and holiday season sales are on track to grow nearly 15 percent. Small businesses should benefit. They captured $68.2 billion in online sales in November.

Interestingly, people are not just sitting at their desk or laptop computers ordering electronically. With mobile phones, they can purchase from anywhere — even while in stores comparing prices.

The fact is brick-and-mortar retailers, whether located on Main Street, in strip malls or giant shopping centers, remain in a fight for survival.

Scott Webb, CEO of Avionos, a company which helps merchants deal with digital buying, believes even though smaller retailers have “the advantage of knowing their customers really well they’re fighting an uphill battle against changing customer expectations.”

“Certainly breadth of selection across categories is where Amazon has an unparalleled advantage from an e-commerce standpoint,” Webb told Supply Chain Brain, an online website.

WolfStreet.com, which focuses on the behind-the-scenes retail trends, finds department stores, such as Macy’s, are experiencing double-digit growth in e-commerce sales even though overall sales are flat.

Macy’s, which will close its downtown Seattle store early next year, is fighting to keep stores in shopping malls open as well. 

Softplay.com believes malls need to transform into what it calls “retail-tainment” centers to combat the surging growth of e-commerce. The idea is to enhance the entertainment experience so that shoppers will now have more reasons to visit a mall than to simply shop.

The concept is simple: make malls places where bowling
alleys, movie theaters, miniature
golf courses, skating rinks, amusement rides and video gaming centers are located. Fitness and aquatic centers, medical and dental offices, and grocery stores can also co-locate for one-stop convenience.

Softplay found that no matter how important retailer online divisions have become, they can’t replace all the business these stores could do at their physical locations. “People still want to have interactive and social experiences — something that is hard to replicate fully online.”

Many shoppers still like to try on clothes, find in-store sales and return merchandise without the inconvenience and delays of sending products back. Sometimes it is as simple as driving to the mall to exchange a birthday present without going through the shipping hassle and delays.

Softplay believes the “retail-tainment” is attractive to millennials. They are currently the largest generation in the U.S., according to Pew research. Millennials often have smaller comparative budgets than their parents and grandparents did at their ages. Their jobs are statistically lower paying, and much of what income they do have goes toward paying off student loans and rent.

“Because their budgets are stretched so thin, many millennials are choosy about how they spend their money. This makes them less apt to simply browse a shopping mall for fun or buying something they like on impulse,” Softplay concludes. “Retail-tainment” offers new opportunities.

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