Online shopping just one challenge faced by malls these days

By Mark Guydish - [email protected] | October 15th, 2017 9:56 am

PLAINS TWP. — People love to blame online shopping for the decline of malls across America, but the seeds for this shakeout were planted long before Amazon became better known as a shopping website than as a river.

“We overbuilt retail tremendously in the United States in the last couple of decades,” said Larry Newman, executive director of the Diamond City Partnership, the steward of downtown Wilkes-Barre. “We just totally saturated the landscape with retail.”

Compared to other Western developed nations, the numbers are stark: When it comes to “gross leasable area” — the space available for rent by retail vendors — the United States has 40 percent more shopping space per capita than Canada, five times more than the United Kingdom, and 10 times more than Germany.

Inevitably, Newman noted, “There was going to be some cannibalization of the weaker outlets by the stronger ones, and that’s exactly what’s happened.”

The “cannibalization” started with malls. Shopping has always flourished when an area becomes the easiest place for the largest number of people to reach. In the olden days, that was a city’s downtown, where all the trolley lines came and where the most people lived.

“After World War II, as people started to suburbanize and more people got cars, that shifted to the locations on the outskirts of town, where more people could reach a shopping destination by auto,” Newman said.

Thus, malls became the marketing mecca.

The growth of the Wyoming Valley Mall in Plains Township had a big boost from timing. The mall opened in 1971. The next year, Hurricane Agnes hit, levees failed, and Luzerne County’s largest downtown — Wilkes-Barre — was flooded to near extinction.

For years of recovery, the high and dry Wyoming Valley Mall wasn’t just a place to shop, it was the only place to shop. A post-flood population exodus from the lower areas of the valley further eroded support for downtown business.

But malls weren’t at the top of the retail food chain when it came to cannibalization.

Did Amazon eat retail?

Clara Keese and Renee Sherell stood in the entrance of Payless Shoesource — with 7-month-old Tobias looking proud and a bit aloof in Sherell’s stroller — and acknowledged they don’t shop often in the Wyoming Valley Mall.

“We came to get out of the house,” Sherell said.

The mall as destination has faded, partly because the Great Recession cut deeply into many people’s expendable income, but also because the internet has changed shopping habits — in ways both obvious and subtle.

The obvious is glaring: To most, it’s spelled “A-M-A-Z-O-N,” a spot where the most people can be reached with the least effort.

The e-tail competition is vast, but Amazon remains the gold standard in defining the industry’s growth. data shows Amazon sales worldwide soared from $6.9 billion in 2004 to $136 billion in 2016.

In comparison, Sears — arguably the precursor to internet shopping thanks to its once-famous mail-order catalogs — had total sales of about $22 billion last year.

Big e-tailers have made customer convenience a big part of the deal, offering free shipping and — more recently — free returns by companies such as shoe giant Zappos. The new retail fitting room is your own home.

Newman noted that clothing is one of the hardest hit by e-commerce, a fact supported by data showing the apparel market now is the largest e-commerce category, outpacing the internet’s original success story (and Amazon’s starting point): books and video.

That’s bad news for traditional mall anchor stores.

“Those anchors traditionally were the main apparel sellers, and have for the most part fallen on really challenging times,” Newman said.

And what’s bad news for anchors can be worse news for the smaller stores in malls, which often depend on catching business from those who initially came to buy at the big lures.

The Schuylkill Mall might be a textbook example. It opened in 1980 anchored by Kmart, Sears and Hess. Hess went under in 1995, Kmart closed in 2014, and Sears shut down in 2015.

Smaller stores brought in as replacements failed as well, and the secondary shops shuttered. Earlier this year, all tenants were told be be out by the end of the summer.

Larry Newman, executive director of the Diamond City Partnership in Wilkes-Barre, says retail was tremendously overbuilt in the United States in the past few decades. (Sean McKeag | Times Leader file photo) Newman, executive director of the Diamond City Partnership in Wilkes-Barre, says retail was tremendously overbuilt in the United States in the past few decades. (Sean McKeag | Times Leader file photo)

By Mark Guydish

[email protected]