Future Of Retail May See Less Indoor Malls, More Livestream Sales Events

The retail industry was hit hard during the COVID-19 Pandemic, as non-essential businesses big and small were forced to shut down all brick-and-mortar operations for months in an attempt to curb infections, and many were unable to recover even after reopening and enforcing social distancing guidelines. Now, with consumers more conscious than ever of where they shop, a traditional mainstay when it came to shopping is increasingly falling by the wayside—the indoor shopping mall.

According to a report from Jones Lang LaSalle, a property consultancy firm (via Reuters), vacancy rates in indoor shopping malls around the U.S. are increasing, leading mall operators to vacate some of the buildings they own and hand them back to creditors to pay down debts. Vacancy rates in indoor malls are predicted to peak at just under 9% this year, higher than the predicted 7.8% for outdoor shopping centers and 7% for “power centers,” or open-air shopping areas anchored by big-box retailers like Best Buy and Target.

Retailers and property owners are shifting their focus, with companies like Macy’s, Lululemon, Bed Bath and Beyond and more investing in open-air locations and smaller brick-and-mortar footprints overall, as shoppers change their habits in a post-COVID world. More comfort is found in these outdoor locations, and with more modestly-sized buildings, retailers may also be saving some money on their rents.

The move out of the mall and the larger storefront spaces also comes at the same time as another shift that is growing in popularity—live-streamed shopping events, which have taken the online shopping market by storm since the pandemic.

The Washington Post reports that a variety of retailers and brands have turned to these events, broadcast on websites, Facebook, Instagram and TikTok, after they generated an estimated $5.6 billion in sales last year, largely in part because of the pandemic.

Some live streams have included ones with Ree Drummond, who sold several of her “Pioneer Woman” products on a Walmart stream, as well as a fashion show for Abercrombie & Fitch’s Social Tourist line, which was a collaboration with TikTok influencers Dixie and Charli D’Amelio.

While a long-term future for the platform isn’t as certain, nearly one-third of Americans have started tuning in to these live streams, with almost half making a purchase before they come to an end.

“It’s a version of the Home Shopping Network, souped up for the modern age,” Ken Fenyo, president of advisory and research at Coresight said. “Live streams marry video interactivity and content—along with a little bit of the thrill of shopping in person.”