The End of the Shopping Center: Postponed
NEW YORK (MainStreet) With the rise of ecommerce, who needs shopping centers or malls? Amazon will ship whatever we need right to our door maybe by even sending a cool little drone buzzing around our neighborhood one day. But with all of that one-click convenience, online shopping is projected to account for just 5-6% of consumer packaged goods sales in 2015, according to Nielsen.
Brick-and-mortar retailers are adapting their business models to reflect the consumer desire for a "physical place to congregate, connect and engage," Nielsen says. The research firm reports that shopping centers today are redefining themselves from strictly retail stops to "activity centers" woven into the social fabric of communities.
According to the 2014 State of the Shopping Center report, the number of large shopping centers grew by just 3% in the past year. But mammoth malls and sprawling shopping centers are yielding their popularity to so-called "community centers," featuring neighborhood-friendly services like dry cleaners and grocery stores. Today, community centers comprise nearly half (46%) of all retail developments as consumers continue to favor a shopping experience with a general mix of merchandise and convenience combined with restaurant and entertainment options.
Lifestyle centers -- upscale retail destinations with national specialty and entertainment offerings -- nearly doubled from a 9% share of the industry in 2008 to 15% in 2014. Such facilities offer a shopping experience integrated into the center of their communities.
The Nielsen report notes an example of such a development: The Headquarters in downtown San Diego. Just opened last year, it is located in the former headquarters of the San Diego Police Department.
"The historic character, gardens and plazas, in addition to trendy retailers and upscale restaurants, create a shopping experience that consumers can't get online," the Nielsen report says. "The center also blends into the downtown landscape, making it a key center of activity within the community."
Nielsen says consumers are drawn to these new lifestyle retail centers in part because of their newness, with a median year-opened date of 2006. That compares to traditional regional and super-regional malls that are much longer-in-the-tooth, with median year-opened dates between 1976 and 1981.
Written by Hal M. Bundrick for MainStreet