In the old days of “just a decade ago,” the mall was a major focal point for shopping. Today, more people are shopping online rather than heading to the shops — and that’s a major problem. Malls have seen a significant decline in their foot traffic and operations, but they are evolving.
With the explosion of e-commerce, and the way consumers have permanently altered their shopping habits, will there be a space for malls in the future? Or will these become yet another relic of the economic past? Let’s take a look.
The Problem of the Mall
The mall used to be a “one stop shop” when families needed to do a lot of shopping. But that leads to overhead, too. Mall shops often paid exorbitant rent to take advantage of the foot traffic that malls brought in. Presently, airport malls are doing better than regular malls for this very reason: they have a captive audience that malls no longer have.
Airport malls have a draw. But regular brick-and-mortar malls don’t. Most people aren’t going to be visiting a mall because everything they can get, they can get online. Amazon is making it possible for people to get one-day or two-day deliveries of most goods, and many people wouldn’t be able to schedule a trip to the mall immediately regardless.
One of the big problems with the “mall” as a concept as many of them were recreational destinations in and of themselves. People would mark off a day to take the family to the mall, or make plans to meet friends there. The mall as a social and family venue no longer exists; it’s no longer a place where people will hang out, eat, and shop. This is especially true as the economy tightens, and the allure of spending an entire day spending money wanes.
So what can malls do to remain relevant?
Health Clinics Are Moving In
Surprisingly, the answer for malls may very well be health clinics. While clothing stores have decline by 10% since 2017, medical clinics have increased by 60%. Health clinics are growing in number, with a lot of spending happening in specialty clinics. Health clinics can move into malls and maintain a number of related offices, such as opening a laboratory next to a diagnostic center.
Since malls have open space, and clinics need that space, it seems like a natural pairing. And since people need to go to the doctor, it can increase foot traffic for the rest of the mall, much like airports do. And while there may be significant rental costs associated with a mall, clinics are used to paying exorbitant rental costs, including the costs related to their build outs.
This is part of something that’s now known as “medtail” growth: growing medical retail centers that are a blend between the two industries. Rather than strictly providing medical services, they also provide medical products, much like optometrists provide glasses. This growing sector is likely to continue to expand.
As the Clinics Move In, Big Stores Move Out
Before, malls used to be the bastions of stores like J.C. Penney’s, Sears, and Kohl’s. With these brands suffering (and many brands moving to e-commerce), very large spaces are left empty.
What malls are going to do with these large, connected buildings remains to be seen. The most popular attractions in malls today tend to be theaters, because they’re still something that people regularly go to, but even the theater industry is now suffering.
Not Just Clinics
It’s not just direct, medical clinics that are moving into malls. It’s also medically-related devices, such as accessibility devices. Malls are increasingly selling things like hearing aids and related products.
With the generation that is familiar with malls aging, it’s perhaps sensible that the stores within it age as well. Malls are likely something that’s going to be seen as a nostalgic relic of the past regardless; there’s no longer a need for immense shopping marketplaces when the online marketplace has taken its place.
But those with an eye on finance may want to take an interest in the growing medtail industry, which is a niche that’s likely to remain very successful. Medical spending in America is only going up, with people living longer, more fulfilling lives.
Regards,
Ethan Warrick
Editor
Wealth Authority
