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Sunday, October 31, 2004

The History of Malls

Fortune magazine has come out with an excellent article chronicling the history of American malls and their future. Excerpts highlighting some interesting facts and observations:

America now has more shopping centers than high schools, for example—47,000 of them. The facilities attract more than 200 million shoppers each month, employ more than 17 million workers (about 12% of the nonfarm labor force), and generate nearly $2 trillion in annual sales (about three-quarters of the nation's retail activity, not counting cars and gasoline), plus another $84 billion in sales-tax revenue. A 2001 study by PricewaterhouseCoopers found that 19% of shopping malls were either dead or dying, a figure that won't surprise anyone who's seen the abandoned, weed-thicketed mall lots sprouting around America. Dead malls have become such a phenomenon that they're now the subject of websites, blogs, and urban reuse design competitions (finalists in one such program included proposals for a housing development, a women's prison, and a combination wetlands/wind farm).
"Eighty-five percent of the malls in America are more than 20 years old," says Paco Underhill, author of Call of the Mall and Why We Buy. "Many of them will meet their ultimate fate with Mr. Dynamite. And we've reached a critical mass in terms of population density and development density: Nobody is building malls in North America to serve a new audience; they're building malls to co-opt or steal somebody else's audience." Underhill thinks the mall will survive, but in a more complex form. "Many of the developers now want to be in the 'all' business, not the mall business," he says. "That means doing the hotel, the office block, and often the residential housing as part of an integrated community. It's a development process that's a better integration of public and private interests."
The other big challenge, of course, is the Internet. Several online retailers have made significant inroads, ranging from Amazon (which entered the 500 listings in 2001 at No. 492; it was No. 342 on the most recent list) to Apple's popular iTunes Music Store. The most successful model may be eBay, which is essentially the world's biggest mall. And more-exotic shopping technologies may be coming. One idea currently in development involves a special button on car radios that would allow drivers to send a "Buy now" signal for any product being advertised at a given moment. The signal would be sent to a satellite, which would in turn access the driver's preregistered payment and shipping information to complete the order. Virtual shopping technology will no doubt continue to evolve. But it's unlikely that cyberspace will ever completely supersede the mall, as some trend forecasters originally predicted, if only because most of us still like to see and touch much of what we buy. Besides, most people think going to the mall is fun, all the more so as malls have loaded up on entertainment features—you can't rappel down a climbing wall on the Internet.
Indeed a very interesting article about one of the pillar's of modern america's economy.
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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"