Your neighbourhood mall is likely seeing a major decline in revenues as an increasing number of consumers fill their shopping baskets with just the click of a mouse.
The decline is evident in indoor shopping centres that were once considered community hubs in many neighbourhoods in Canada and the U.S., says Doug Stephens, author of 鈥楻eengineering Retail.鈥�
In Toronto鈥檚 west end, the Kipling Queensway Mall has several vacant stores as it struggles to attract tenants.
In Oshawa, Ont., a former Target store at the 5 Points Mall is being redeveloped into a self-storage facility. And in Toronto鈥檚 Malvern Town Centre, which endured Zellers and Target closures, lost its No Frills anchor last month, leaving behind a 70,000-sq. ft. space.
Stephens says the changes taking place in the retail landscape are 鈥渆normous.鈥�
鈥淚t really is a bit of a revolution,鈥� he told CTV鈥檚 Your Morning on Wednesday. One major aspect driving that transformation, he said, is the explosion of e-commerce.
鈥淐onsumers are increasingly moving online and what鈥檚 really concerning about that for Canadian retailers, is that 60 cents of every incremental dollar that gets spent online now, is going directly to Amazon,鈥� Stephens said. 鈥淚t鈥檚 not even going to conventional retailers, so there鈥檚 a lot of catch-up that needs to be made.鈥�
Thirty years ago, the neighbourhood mall was 鈥渞eally the apex of convenience鈥� and one-stop shopping, Stephens said. It was also a hub for social interaction.
鈥淚f you were a young person, the mall was where you hung out, and now you hang out on Facebook, or you hang out on social media,鈥� he said.
Stephens said the challenge now for malls is reinvention. 鈥淗aving 100 brand names under one roof isn鈥檛 good enough anymore, so I think we鈥檙e going to see the introduction of more food, more entertainment, you鈥檙e going to see more community events being held in malls.鈥�
He added: 鈥淲hen you look at where the mall started in history, it was really the centre of life for a community, and I think that鈥檚 where we鈥檙e going to go back to.鈥�
Despite the challenges, some top-tier malls are thriving in Canada
According to the Retail Council of Canada鈥檚 2016 shopping mall study, these were the top malls in Canada, by sales per square foot, per year:
Yorkdale Shopping Centre, Toronto: $1,651
- Oakridge Shopping Centre, Vancouver: $1,537
- CF Pacific Centre, Vancouver: $1,523
- CF Toronto Eaton Centre, Toronto: $1,488
- Southgate Shopping Centre, Edmonton: $1,155
Stephens says those malls are successfully attracting foot traffic by carrying brands that shoppers are hard-pressed to find elsewhere.
鈥淵ou can鈥檛 go to a Louis Vuitton store 鈥� in every mall in the country,鈥� he said.
But as Amazon looks to branch out into luxury retail, even those malls may have their work cut out for them.
According to Stephens, 10 per cent of merchandise bought in Canada is purchased online. He sees that increasing to 30 or even 40 per cent over the next decade.
鈥淭hat鈥檚 going to put increasing pressure on retailers to really improve what they鈥檙e doing and give consumers a reason to get in the car, put down their computer and go to mall,鈥� Stephens said.
