Issue No. 38: Top 99 in eCommerce Design, The Death of Malls

A LAST WORD: MALL’S WEREN’T KILLED, THEY HURT THEMSELVES

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I recall the very early days of attempting to position a menswear startup in department stores. While the company is having much success, today, yesteryear’s distribution was a different story. Anchor stores like Nordstrom, Sak’s, and Macy’s operated within the confines of legacy inventory systems that made it nearly impossible for fresh, upstart brands to run an omnichanneloperation. While the brand did eventually pierce the department store scene, it wasn’t without its logistical and marketing difficulties.

A department store purchasing $1M of your inventory was a young brand’s goal but, back then. It would give you the cashflow to grow like the pre-IPO brands of old. But you needed five to seven years of brand traction. This combination of aging technology and distributorship politics all but eliminated many of the major brands of today from receiving their start in traditional department stores.

So, consumers went elsewhere. Bonobos’ Andy Dunn listed brands, many of whom were ignored by department stores in this emerging encyclopedia of digitally-native brands. While heritage-thinking harmed the department store ecosystem, external factors contributed. With the advent of Postmates, Instacart, and there top players in the on-demand mCommerce space, buying habits have altered over the years. In the essay, Brick and Mortar Experience Sucks, I explore the factors that undermine the remaining positives of department store retail.

The on-demand speed and efficiency of 90 minute deliveries to the home and office have been a consumer luxury that continues to evolve into a standard with each passing quarter. Not to mention, the worst technological advancement in recent years has been the chip-enabled credit card.

Originally invented to prevent in-store fraud, the card has actually increased online fraud. This, while slowing checkout processes to a halt. In the next few years, a reported 35% of all American malls will shutter. For the higher end malls like the L Brands-owned Easton Mall (Columbus, Ohio), innovative thinking will add to its shelf life and preserve the mall’s struggling anchors.

Why malls are dying: 

  1. Same-day delivery (i.e Postmates, etc)
  2. Young brands are seldom placed in department stores
  3. Improved eComm operations within young brands
  4. Chip-enabled cards hurt experiential shopping
  5. Fast-fashion is not just about the clothes, it’s about the more efficient, in-store discovery and checkout processes.

See more of the issue here.

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