There are over 3,750 enclosed malls and strip centres of more than 40,000 square feet in Canada. Almost all of them have been built since 1960 and this number does not include free standing “big box stores”, membership retailers such as Costco, or mega-grocery stores. It is a mistake to think that consumers bought cars to get to these locations. These shopping destinations were built to meet the demands of an increasingly automobile-centric population.
In theory, these locations were meant to provide an increasing variety of shopping choices with lots of convenient parking. In reality, malls have helped reduce the variety of shopper choice to a comparatively small number of national brands that do not vary very much from one shopping centre to another. It is not unusual for one fashion retailer to have several banners, many that share much of the same merchandise and all in the same mall. I was once told by an executive of the currently restructuring Aldo Group that 80% of the merchandise in its five+ banners was identical and that each banner was differentiated by only 20% of its collection.
There may be acres of parking, but unless you are either a very early shopper or very lucky, you will be stuck in parking-lot hell in a tight spot that is half a kilometre from the mall entrance. Very few parking spaces provide shoppers with vaunted curb-side access. I often wonder why someone thinks it is ok to walk five hundred meters across a dangerous parking lot but not enjoy a 500 metre walk along a nicely lit shopping street?
Coresight Research has suggested that 25% of malls could close within the next five years.
COVID-19 has dramatically accelerated the growth of e-commerce. In the US, May on-line sales were US $82.5 billion, an increase of 77% year-over-year. It was expected that it would take four to six years to get to that level. More than a third of consumers shop on-line on a weekly basis, an increase of 28% over pre-Coronavirus shopping habits. https://www.forbes.com/sites/johnkoetsier/2020/06/12/covid-19-accelerated-e-commerce-growth-4-to-6-years/#7719b717600f
As at September 14, twenty-seven national retailers in the US had declared bankruptcy in 2020. For the full list visit https://www.retaildive.com/news/the-running-list-of-2020-retail-bankruptcies/571159/ . A visit to the web site (https://cansumer.ca/stores-closing-in-canada/) will give you a run down of Canadian store closures which include multi-banner retailers Reitmans and Aldo.
So why do I think there is opportunity for convenient neighbourhood shopping given that retail malls and centres are struggling, E-commerce has seen four to six years growth in six months, and that there have been multiple store closings and bankruptcies? There are many reasons:
“While BOPIS was a niche delivery option pre-pandemic, it is fast becoming the delivery method of choice as consumers become more familiar with the ease, convenience and experience.”Taylor Schreiner, Director, Adobe Digital Insights
LONDON, United Kingdom — Today’s consumers are used to getting what they want — when and where they want it. Convenience is key, and in terms of shopping that often means local in tandem with online shopping. Given that many people still like to touch, feel and try fashion items before they buy, the industry is well placed to benefit from this theme. We expect fashion retailers to ramp up their presence in neighbourhoods and new districts beyond traditional commercial zones, with stores that reflect the local community and focus on service and experience.From State of Fashion 2020 by McKinsey & Company and Business of Fashion
I think that the trends are there. Neighbourhood retail will make a comeback but it will take time and effort. Of course, I have opinions on what I consider some of the keys to success. In the meantime I hope this little film may whet your appetite. Link The perfect high street – Film
The same reminders: Shop local, support local businesses, buy from local farms, and support local artisans and manufacturers. As always, wear face masks as required, wash your hands, practice social distancing, hydrate, and exercise.
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