Thanks to online retail and changing shopping patterns, mall rats may soon become an endangered species. The Great American Mall has shaped our culture, and the generation that grew up hanging out there, in profound ways. But malls have been coming under increasing pressure from Amazon and other online companies for some time now:
A report from Co-Star observes that there are more than 200 malls with over 250,000 square feet that have vacancy rates of 35 percent or higher, a “clear marker for shopping center distress.” These malls are becoming ghost towns. They are not viable now and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.
It was only a matter of time before malls starting sharing the pain of the brick and mortar retail outlets they house. The real estate market has been slow to adjust to this new reality, and the amount of commercial real estate built for retail has continued to grow even as demand has declined.Meanwhile, enterprising retailers who can effectively exploit the possibilities of online shopping are thriving and their numbers growing. And what’s bad news for malls and other bricks-and-mortar retailers is great news for greens. Online retail cuts out a lot of physical travel (a lot less driving to and from the mall) and replaces it with more targeted flows of information and distribution. E-commerce is a part of a new economy that prioritizes moving information instead of meat, allowing the economy to grow even as greenhouse gas emissions decline.A generation ago, malls were the hot new thing; now they seem a little passé. Two generations ago teenagers hung out downtown or cruised the streets. In the last generation they hung out at the mall. What the future holds, nobody knows — except that one way or another teenagers will continue to do things their parents wish they wouldn’t.