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After dead mall — a smaller, more personal retail experience emerges

By Ulf Skarin

27112017
Portrait by Tobias Regell

Soon, no one will shop at shopping malls.

Since 2007, not a single new shopping mall has been built in the United States. Department stores like Macy’s, Kmart and Woolworths shun yesterday’s temples of commerce like the plague. And when these pillars of the shopping malls disappear, the malls fall apart like a house of cards. Over the last two years a ”retail apocalypse” has swept over the world. More than 4,000 physical stores in the US are predicted to disappear. Of today’s 1,200 US shopping malls, only half are calculated to still be open in 2023.

Of course, the concept of ”dead mall” has its own Wikipedia page.

There are several reasons behind this purge. There is a socioeconomic explanation of a middle class hit hard by a “middle-class squeeze” — lowered incomes and jobs eaten by automation, and rising costs for education, housing and healthcare. Alas, less money for shopping.

But there are explanations containing a fundamentally changed shopping behaviour.

— Commercial real estate owners must stop selling square metres and instead focus on providing services that create the best experiences, says Annelie Gullström, business development manager at AMF Fastigheter, one of Sweden’s largest landlords of commercial properties.

We’re having coffee in the courtyard of Epicenter in Stockholm, one of the city’s largest co-working hubs, situated in the heart of a completely renovated city core where AMF is a major stakeholder.

As the holder of five major shopping malls, AMF Fastigheter can feel ”dead mall” breathing down their the neck. Early next year, AMF Fastigheter will open The Lobby, located just a few short steps from Epicenter. The Lobby will be a shopping lab, created to track future shopping trends. A kind of “plug-and-sell”, where brands and businesses can rent a retail space in an open landscape — from two to twenty square metres — and AMF will take care of the rest; from staff, interiors, and a small warehouse, to fitting rooms and digital displays. And the brands should preferably not stay too long at The Lobby; between one to four months.

— Think of it as a monthly lifestyle magazine with constantly updated content. Just pick the right space for your needs and we’ll take care of the rest, Annelie Gullström says.

The comparison with media and curated content is also present in The New Stand, a concept recently launched in some of New York’s subway stations and ferry boats. One of its founders is Andrew Deitchman — also founder of legendary ad agency Mother in New York — and he says the idea started with a question: what would a modern newsstand contain? Printed media, of course, but also gadgets, gifts, fashion, and food – smaller stuff that a stressed traveller could need on the way home from work. Connected to the New Stand is an app and a newsletter for curated and editorial content. According to an article in The Observer, Andrew Deitchman likes to think ”that business spaces are living media unto themselves, so the idea is that I can walk into a place and discover something in the same way I might walk into a magazine — to actually experience that product”.

Two square metres of a small retail space, or for that matter a modern small newsstand, underscores the need to combine the physical space with e-commerce. There is no room for a larger warehouse and, at The Lobby, customers will be able to touch and feel the product, and order online directly in store. The idea is also to act as a digital delivery centre, even for brands that are not sold in the physical store.

Across the street from where The Lobby is set to open, furniture giant IKEA is testing a new retail concept. A smaller store — significantly smaller than the giant blue hangars in the suburbs of the world — focusing only on their kitchen range. While this is a new concept for the Swedish retailer, Annelie Gullström goes further in her thought, envisioning a future where we purchase our kitchens in a store less than ten square metres.

— Who needs a bunch of dead square metres when we can check into our dream kitchen using a VR headset?

Shopping is no longer primarily a transaction, but an experience. When H&M’s new retail concept Arket opens it’s first store on Regent Street in London, the store will feature a café with carefully selected Nordic specialties. This is no accident, rather a strategic direction. And for those passing by Stockholm, you need only stop by upcoming fashion brands like Appletrees, C.QP, Schnayderman’s, and Deadwood to get a glimpse of the store of the future. All of them are basically built on the same set of ideas: a small space, away from the high street (to know where to find them is part of the experience), containing store, office and warehouse. Space efficient, of course, but also more personal when you have the opportunity to chat with the brand’s founder.

— On average we have maybe three customers a day. But most people who do come, leave with a pair of shoes, says Adam Lewenhaupt, founder of exclusive trainer brand C.QP.

And if they leave the store empty-handed, it’s not the end of the world, since they’ve left with a strong sense of the brand. The transaction can come later. Online.