Small is the next BIG story in retail
A new Unity Marketing white paper reveals the consumer trends turning the high-potential shoppers away from the mall and back to specialty retailers on ‘Main Street’
Shopping malls are becoming the 21st-century version of ghost towns. While mall owners blame the trend on the closing of anchor stores, like Macy’s, JC Penney and Sears, the real reason behind the demise of malls is that shoppers have lost interest. Since 2010, more than two dozen enclosed shopping malls have closed, and an additional 60 are on the brink. By 2025, an estimated 15% or more malls will be closed or repurposed, according to projects by Green Street Advisors.
“Today, the sameness and ubiquity of the big-box store experience is beginning to show fatigue,” says Pam Danziger, president of Unity Marketing and author of the new white paper, Small Is the Next BIG Story in Retail.
“Walk through any of the nation’s 1,000 or so enclosed malls and you might notice they all look much the same. Filled with the same stores offering the same merchandise at the same ‘sale’ price, it’s too much of the same thing. Consumers are beginning to look for something new and different and finding it on ‘Main Street’ not in the malls,” Danziger says.
Shoppers are abandoning malls and coming back to Main Street
Main Streets and the independent retailers that thrive there are on the cutting edge of a shift in retailing. While the Great Recession took out a wide swath of retailers — economic natural selection at work — the successful retailers that remain represent, by and large, the best and brightest. They have come through the worst and emerged onto the other side stronger, smarter and more resilient.
Unity Marketing has just published a white paper entitled Small Is the Next BIG Story at Retail which describes this emerging retailing trend that will reshape the retail landscape over the next decade. Specifically, demographic shifts, with both aging Baby Boomers and young Millennials looking for a more personal shopping experience, as well as heightened expectations from affluent consumers will favor the special services and products that only local small businesses can provide.
Danziger explains the importance for specialty retailers to target the affluent shoppers in their communities. “While the middle class lost its spending power in the recession and has yet to recover, the affluent, especially the HENRY (high-earners-not-rich-yet) mass-affluent who are the new mass-market customers with discretion, have the incomes on which specialty independent retailers rely. The HENRYs are passionate about fulfilling their desires in smaller shops where they know store owners and staff. They tend to demand to be treated with a high level of personal service, and expect a differentiated, experiential sell. ”
Danziger says, “Over the next 10 years, independents will thrive as multi-generational customers cut back on the one-size-fits-all approach of mass retail and the sameness that it engenders. Customers will seek these smaller stores for different reasons, based on their socio-economic, psychographic and demographic outlooks. As a result, growth at mass will slow down and profits will shrink. The next decade will see a great winnowing down, restructuring, and right sizing of mass-market retail, which will give a new opportunity to independent specialty retailers. As long as they understand the best potential customers, the affluent HENRYs.”
