If you’re in the United States look to your left. Now, look to your right. Chances are you just saw some kind of retail store, more particularly a chain one. America may be the land of the free and the home of the brave. But, it is also the home of the over-retailed. We have 40 square feet of retail space per person, which is the highest of any other county. So how exactly did we become the advertisement-laden, shopping-mall mecca of the world?
Riholtz explained that trends with consumerism is a direct reflection of construction and that unfortunately consumer trends are ever-changing. Yet we are building permanent structures based around them such as shopping centers and retail destinations. According to Forbes, “since 1995, the number of shopping centers in the U.S. has grown by more than 23 percent and the total gross leasable area by almost 30 percent, while the population has grown by less than 14 percent.”
Consumer values have changed significantly since the nineties when many of the aforementioned shopping malls were erected. In previous decades, a sign of status was the accumulation of material items. While that is not an entirely antiquated notion, the ways to go about it have changed. Americans, especially the younger generations, value experiences over things. So when an assistant gets promoted from her current position to an executive, she is more likely to plan a weekend getaway to celebrate with friends or upgrade apartments than blowing a grand at a designer store.
The average American will not buy a product without price checking between multiple stores. The problem now is that more often than not, said item is cheaper to purchase online! Not a great sign for brick-and-mortar. Back in the day, consumers just went to the store and purchased without a second thought or click. Maintaining retail space comes at a cost therefore it makes sense why prices would be higher than online. This has led to “showrooming” where shoppers check out and discover new products but go complete the purchase online.
Malls and gargantuan shopping centers have been the hallmark of suburbia for the last few decades. This may have worked in the past but with the current retail landscape, it is more of a burden. Storefronts are closing to cut costs due to the changes in consumer shopping habits and values. Retailers are not doomed, but just need to figure out how to do business in this new age of consumerism.