A report from Credit Suisse finds at least one in five U.S. shopping malls will go out of business within the next five years, because of the growth in online sales. LSU Marketing Professor Dr. Dan Rice says retail sector is not dying but certain retailers in these malls are really hurting.
“Sears and K-Mart have had their problems for over a decade with not really communicating with consumers, as you start to get that drop in desire to go to these stores, it also hurts the other stores that are there.”
The report estimates over 8,600 stores will close in 2017. Rice says with a decline in interest of the anchor stores, or big department stores, there is less foot traffic to other small stores in the mall and that’s hurting small stores in a mall.
“It’s really maybe attracting the right types of stores into the mall, the stores that you can’t really get the experience otherwise, and whether they can do that or not remains to be seen.”
Rice says online shopping is growing faster than ever. But he says attracting shoppers to physical stores is still possible, as retail sales are higher than ever.
“If a company is really good at what they do and offers a compelling reason to bring you into a physical store, then you can be successful with both.”