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Last year, The UBS Group (NYSE: UBS) reported that some 80,000 retail stores were on target to close in the U.S. by 2026 in what some are calling a “retail apocalypse.” That's nearly 9% of the remaining department stores that had previously survived a significant loss of foot traffic and years of economic decline.
Globally, there’s been a dramatic increase in store closures, with retail declining from 18% to more than 27% in just a short amount of time. This number, fueled by social distancing restrictions and the lack of interest in public gatherings, began accelerating at the onset of the Covid-19 pandemic with a lack of certainty on the rise.
Experts expect e-commerce to continue driving store closures, citing that online sales have increased more than 50% for major big-box retailers.
Coresight Research predicts that roughly a quarter of all operating stores will completely close in the next 3 to 5 years. And while some media outlets don’t believe this will really happen, they do believe that some 250 malls will become mixed-use facilities — places for shopping, entertainment, health and wellness.
Since July 2021, Cushman & Wakefield PLC (NYSE: CWK) reports that more than 700 anchor stores have vacated local malls. While some have closed for good, department stores, such as Macy’s (NYSE: M), have actually pumped breaks on their previous plans to close their doors completely. Instead, many have learned that moving to areas away from the mall would send their sales soaring and are now opening doors elsewhere.
In 2019, the U.S. saw a record year in bankruptcies, with more than 9,832 cases of total retail failure. In 2020, more than 8,700 stores were shuttered. This does not include the many mom-and-pop locations that have earned their place among the communities they served.
In 2021, there’s been somewhat of a stalemate in some cases. While similar records have been met, we’re seeing a turnaround in numbers with businesses expanding and locations staying put. Most of this comes on the tail of modernization, the adoption and advancement of technology, whereas most companies transformed existing models to appeal to the at-home community.
Curbside pickup, store-to-home deliveries — and even Instacart — have all become reasons that stores like Walmart (NYSE: WMT) and Target (NYSE: TGT) remain untouched and why stores like Dicks Sporting Goods (NYSE: DKS) and Family Dollar (NASDAQ: DLTR) have seen recent expansion, despite economic chaos and global restrictions. Of course, receiving stimulus checks, bonuses for new hires and an uptick in pay for some may have turned this around for the better.
And, then, there’s what’s not being talked about, there’s what these numbers are not saying about retail — and that is that people are plain tired of being at home. They want an excuse to get out and escape the bond of cabin fever. People crave socialization. They want to step away from the screens. They want to stop paying more for things online — to the point they’re starting to de-prioritize convenience.
It’s human nature. We want the thrill of an adventure. We want to meet other people. We want to smell the air. We want to make new memories. And we want to indulge in new experiences.
Major Hubs for Experiences and Entertainment
Malls are set to become major hubs for experiences and entertainment.
Across North America — in cities both large and small — residents complain that the world is no longer what it used to be, and there is nothing positive for their children, nothing worthwhile for the youth.
Many reminisce of a time where weekly nights out meant family fun and entertainment with something they could do together. But, unfortunately, these types of businesses have literally dried up. And many will point out a rise in crime in places where children no longer have anything to keep themselves occupied. They simply have nothing to do.
Where are the arcades? The skating rinks… the bowling alleys? There aren’t even movie theaters in many cases — just worn-down playgrounds that everybody’s scared to use.
“Experiential retail runs the gamut but could soon include movie theaters, bowling alleys, trampoline parks, arcades and food-and-beverage venues,” explains The Business Journals. Although it’s been hit hard with concerns of spreading the virus, reluctance against experiential retail is starting to wear off.
Places like Allied E-Sports (NASDAQ: AESE) and Dave & Buster’s (NASDAQ: PLAY) bring people back to the mall by the numbers. E-sports arenas allow us to continue our digital experience in a more social setting. Escape rooms allow us to work as a team — leaving the screen behind and embracing something just a bit more hands-on.
The Simon Property Group (NYSE: SPG) recently welcomed Amazon (NASDAQ: AMZN) within its walls, with the online marketplace taking over brick-and-mortar, moving into old malls with its warehousing, fulfillment and distribution centers. This is expected to bring back the desire for instant gratification, as people opt-in for same-day deliveries and hour-by-hour.
Will these new alliances help our malls and shopping centers return to their former glory? The truth is, they probably will not. But, they most certainly could.
The challenge to bring people back to the mall depends on how the dead space will be filled. They’ll need to be consistent and provide shoppers with a more tailored experience. Unique features mean families will stay longer and spend more dollars on the things that matter.
It’s All About Being Unique
Dining options beyond the traditional food court experience could include more diverse options for eating and dining. Galleries could feature local art and aesthetics. Climbing walls could promote an alternative to regular exercise.
Flight schools and simulations, Karate and yoga, interactive exhibits and displays, cosmic golfing and ping pong… People are shopping; people are playing. And they want to socialize.
Mom’s want to be able to drop off their teens without fearing they will walk in the front door and sneak out the back. They want to shop and run errands while experiencing a moment of in-person retail therapy.
It’s inexpensive to walk around, to converse and see new things despite the weather.
Little ones can play together as new moms set up playdates. Kids can visit play centers while single parents shop for birthdays and Christmas.
Because they have a lot to benefit from foot traffic, Laser Tag Zone has done a lot of research on what makes a successful shopping center and provide the following statistics on their website:
- 74% of shoppers state that entertainment facilities influence their decision on where to shop, while 90% of shoppers agreed that having facilities to entertain children or spend some time relaxing while shopping is important.
- 60% of shoppers agreed that centers with play facilities show they are child friendly, family-focused, and a real asset to the community.
- 60% of shoppers agreed that play centers genuinely cater to their shoppers and understand their needs and the market, as they visit at least once a week — 45% use the facilities for entertainment, and 82% of those shoppers make additional purchases such as coffee, drinks and food.
- Most shoppers believe that having the entertainment facility next to a cafe provides the perfect spot for parents to sit and relax with a cup of coffee or snack while watching their children socialize, release energy and have fun altogether.
We’ve been out of the habit for so long, what’s going to get us back to the mall? What’s going to keep us there as we rediscover everything new that these malls can soon offer?
Ericsson is Calling for the Never-Ending Shopping Mall in the Everyspace Plaza
Last month, Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC), a Swedish multinational telecommunications company and the leading provider of 5G network equipment in the U.S., released their 10 Hot Consumer Trends 2030 report, which takes a closer look at how shopping malls will ultimately be digitally enhanced to offer hybrid consumer experiences.
Although many consumers are expressing a sense of digital overload while being cooped up in the home, Ericsson suggests another way that futurism could rekindle commerce and cause shoppers to return to the mall en masse.
Since Facebook’s name changed to Meta Inc. (NASDAQ: FB) in October, everyone has been talking about the multiverse, a place where anything is possible – and, according to Ericsson, “a place that can be programmed and adapted to an almost infinite number of in-person activities.”
The company points out that in 2021 leading players in tech are moving towards initiatives that will one day merge a networked reality with enhanced, real-time experiences. The Walt Disney Company (NYSE: DIS), for one, announced incorporating video capture points at locations across the park to provide visitors with hybrid video and photo opportunities, as they board rides with their favorite Disney characters.
The Kalahari Resorts and Convention Centers are another one, who’s already integrating digital experiences into the real world. On National Waterpark Day 2021, Kalahari Resorts in the Poconos introduced a new virtual reality (VR) experience that encouraged its riders to wear waterproof VR goggles when using the waterslide, thereby emulating the excitement one gets when running away from a tyrannosaurus rex.
It’s important to note due to the success of such integrations, Kalahari Resorts are now implementing VR rooms, 7-D theaters, underwater AR adventures and VR water slides at each of its locations.
Walmart Inc. (WMT: NYSE) is another company currently mapping out its entry into the metaverse. Cedar Fair Entertainment (NYSE:FUN) is adding eSports.
Ultimately, big business will begin developing location and connectivity-enabled technologies that blur the lines between intelligence and creativity while uniquely shaping and improving the way of commerce forever.
These connected, next generation encounters are pursuant to adoption but expected to be integrated into existing shopping experiences by 2030 and will sooner, rather than later, drive consumer behavior to achieve new heights for commerce, customer support and entertainment.
People that Rent Vs. People That Own
In August, Pew Research put out a report breaking down U.S. living arrangements prior to the pandemic. The company acknowledged the country’s recent eviction ban and that many of these numbers may have since changed. But, despite any discrepancies, these numbers still paint a clear picture of how many people were renting versus how many were homeowners.
According to the report, 36% of the nation’s 122.8 million households were renters in 2019, which included a population that was 51.8% “white,” 20.3% “black,” 19.7% Hispanic and 5.4% Asian. Renters under the age of 35 were far more likely to rent than other age groups. In fact, two-thirds (65.9%) of them actually lived in rentals.
Pew Research points out that many businesses don’t own their properties either. And, this leads to another key point of interest.
Renters are allowed to make fewer decisions than they’d like to believe. In particular, they’re unable to make certain decisions about the property where they live. Specifically, they’re not allowed to make certain decisions pertaining to long-term use of the property or renovations that would ultimately alter their stay.
Similarly, homeowners are responsible for any and all expenses related to their properties. Some of these include taxes, insurance, maintenance and upkeep. At the end of the day, there’s little wiggle room for upgrades and essentials.
Starting in 2022, the UK will require all new homes and buildings to install electric car chargers in a move to go fully electric by 2030. As superpowers compete, other countries may soon follow suit. And even if they don’t, the U.S. alone has plans to incentivize electric.
For those that can’t charge at home, there has to be another option — someplace one can go to fully charge their electric vehicle — and that leads us to yet another problem on the way to blissful living.
What’s Wrong With Today’s Electric Charge Stations?
There’s plenty wrong with today’s electric chargers. Much of this comes from the properties they’ve been installed on and the lack of understanding toward EV.
For one, it’s not a simple “in and out” thing. You can’t expect an EV to be charged in under 10 minutes. For this, most drivers will charge when they need to rest, when they can focus on work and when they’re ready to play. Properties that understand this can take full advantage of going electric.
Too many properties expect instant electrification. Not only that but drivers may be forced to back into stations making it very difficult, in some cases, to even connect to a line.
Not all stations provide universal ports. And, because of this, not installing a charger because there’s competition around the corner can be another primary concern for drivers left without a power source with few options available nearby.
Some stations disregard the elements. They show a lack of concern where flooding and possible electrocution can occur. They don’t understand that 600-watt copper lines don’t mix well in a battle against mother nature. And, no one wants to die for a short trip to the office.
While there is a lack of knowledge when it comes to electric, sometimes we have no choice but to install stations where most convenient for the business or landowner, whether for the purpose of electrification or for the availability of space. This, however, doesn’t always translate to convenience for the user.
Not only that, but drivers don’t want to sit in a parking lot for up to an hour — especially in areas they don’t feel too safe.
How can NPEV Save the Day?
Non-parasitic electric vehicle (NPEV) chargers are hydrogen-powered solutions, free from the grid and easily installed anywhere a car can park. Unlike Tesla (NASDAQ: TSLA) EV chargers, they’re universal and easily removed without property owners incurring outrageous costs. Property owners will do no digging, there are no transformers to worry about, and there’s very little-to-no risk of electrocution whatsoever.
(As a side note: Most electric charge points are anchored into the ground by wiring, which can be expensive if removed and dangerous if not handled appropriately).
They’re 100% carbon-neutral with zero emissions or harmful gasses.
Not only can they be placed just about anywhere, but they can also be positioned for convenience based on a vehicle's make and model. Entire rows of a parking lot can be powered for EV. They also require little maintenance, but even so, servicing will be maintained by the NPEV provider.
As tax credits roll out and more people adopt electric vehicles, there will be an even greater need for charging units across the country. Businesses that adopt NPEVs will have a significant advantage, especially those that can offer entertainment, space for business activities, shopping, and fitness.
While it sounds like a long stretch, the reality is that people will need something to do while charging their vehicles. Providing drivers with convenience, we can drive foot traffic back into malls and shopping centers. We can invite them to experience new things or invite them in to “do their thing.”
Even Amazon will find a bit of convenience as they roll out their EV trucks and expand robotaxi services throughout North America.
The Ontario Tech University (OTU) has teamed up with Worksport Ltd. (NASDAQ: WKSP)(NASDAQ: WKSPW) and Terravis Energy to introduce NPEV to the world. Many have been calling for an alternative sustainable fuel system, such as the NPEV, for some time now. And they’ll finally be brought into fruition this spring.
When will we see a great awakening at the malls and shopping centers across North America? With Covid variants such as Omicron creeping about, there’s really no telling. But as malls begin adding these dynamics to their shopping experiences, we as consumers should begin seeing traffic pick up shortly!