Are shopping malls losing the game to stand alone stores?

They epitomise America’s consumerist society and have contributed terms like ‘mall hopping’ and ‘mall rats’ to popular lexicon. But are shopping malls in the US losing the game to stand alone stores?

CLOSE your eyes and you could be in any mall, anywhere. At each end is an overstuffed department store with roving fragrance spritzers and makeup artists. In between are children’s stores showing pink clothes on the left, blue on the right, interspersed with teen clothing stores where the lighting is dim and the salespeople are rail-thin. Throw in numerous shoe stores and another version of The Limited or The Gap. Hungry? Don’t fret: Somewhere in this mall are warm cinnamon buns.

That’s the problem. According to new Wharton research, consumers are aggravated and uninspired by the sameness and predictability of shopping malls, which for decades epitomised America’s consumer society. It’s not exactly the news mall developers want to hear, given the already difficult holiday retail environment.

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Rather than depending on policy prescriptions that have been tried before, it is time, we start exploring innovative measures

WHILE the world debated and discussed the $570 billion fiscal stimulus package announced by the Chinese government, few noticed a unique and innovative policy decision from the government across the straits in Taiwan. The Chinese had drawn up a massive bill, largely funded by tax payers’, to be spent by the government itself in boosting the economic activity. Taiwan, on the other hand, decided to give back some money to its citizens to spend by themselves, thereby creating demand for products in local markets, which in turn could boost economic activity and job creation.

Under a new policy announced in December 2008, the island’s 23 million people regardless of age or wealth were given 3,600 Taiwan dollars or around $165 as shopping vouchers. “The programme is aimed at boosting the economy and is expected to contribute to a 0.64% increase in 2009 GDP,” explained Premier Liu Chao-shiuan. Continue reading

Which Retail Sectors are growing the most online?

According to US Department of Commerce (DOC) estimates, online sales represent a minuscule percentage of overall retail sales. In 2007, only 3.2% of total retail sales took place on the Internet.

Of course, large categories where e-commerce has hardly made a dent—such as autos, gasoline and groceries—skew the results.








The DOC data illuminates a seasonal trend: Online sales penetration is greatest in Q4. A likely reason for this is that the benefits of e-commerce—convenience, broad selection, cost savings, free shipping and avoiding crowded malls—shine brightly during the holiday shopping season.

Forrester Research used its own proprietary formula in May to estimate that e-commerce will represent 7% of retail industry sales in 2008.

Even some of the categories with online sales penetration rates that exceed the industry’s 7% rate still have strong growth potential. Forrester estimated that 20% of consumer electronics sales will take place online this year. Other Forrester data showed that online sales in this large category could grow to 29% of total sales by 2012.

Moreover, some of the least-penetrated categories such as auto/auto parts (2% penetration) and food, beverage and grocery (1% penetration) nevertheless generate respectable online sales.

Take groceries, for example. Many of the early problems that plagued online grocers are being addressed today through innovative business models. In this light, the fact that most groceries are still sold offline could be viewed as an opportunity for online food merchants who can figure out how to lure customers from physical stores.

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