The Malls of America: A Digital Enterprise

By: Megan Thompson

MFD 401
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Table of Contents
Preface, pg. 3
Abstract, pg. 5
A Segregated Start, pg. 6
Caught in a Crisis, pg. 7
Digital versus Destination, pg. 8
Cutting Loses, pg. 9
Resources, pg. 11
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Preface

This story does not begin with a single shopping center. The fate of Mid Rivers Mall,

however, is akin to that of so many others. As a summertime sales and management intern,

the author does not presume that her morning routine is all that different from the opening

tasks of any other retail employee who is trying to breathe life into their business. In fact, it

may seem haunting how similar her experience feels-----for those who have survived long

enough in the world of retail, that is. US shopping malls are quite literally being killed off.

Just read the headlines.

In the early morning hours, the soundtrack of the author’s day typically starts with

80’s glam that echoes overhead from the mall speaker system. Aside from the occasional,

endearingly coined “mall walkers” who may power-walk on by with a chipper “hello,” the

building remains dormant. It is as if it decided to sleep in, slumbering after the late night

moviegoers have finally exited the building from the lower level cinema. Some security

gates are ajar. When the author ducks under that of Buckle’s, she cannot help but think that

many of these stores will never open when her store’s gate goes up.

Entering Buckle can be described as being submersed in a whole new world. The

exciting and innovative culture that the author’s store emanates is palpable to every Guest,

even to those who do not initially seek the store out when shopping. If the store’s

Teammates were not so welcoming and skilled at conveying urgency to their Guests, it

might feel like one has just walked straight into a wall. Taste in music aside, the shift in

atmosphere is palpable. It is what has given Buckle a solid foundation for over 50 years.
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While this story may not revolve around good ol’ Mid Rivers Mall, there is something to say

about this company in particular.

Megan Thompson

Sales and Management Intern

Buckle, Store 251

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Abstract

Community shopping malls face an epidemic of closures as their stores are forced to either

file for bankruptcy protection and cut losses or shut down altogether. These shopping

centers are ruthlessly being gutted. While technology has its many marvels, the fast fashion

supply chain revolution has crippled aspects of retail in order for powerhouses like Wal-

Mart and Amazon to maintain their demand driven volume at low prices. Not only has

quality and service experienced a decline, but certain consumer lifestyles have as well. Is

giving consumers the most product at the cheapest prices, with the fastest distribution

worth the toll this accelerated method of retailing has taken on the livelihood of

communities?
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A Segregated Start

The shopping mall was born during the end of the World. That is, when the end of

World War II was in sight, suburban development began. Authors Cowen and Parlette of

“Dead Malls: Suburban Activism, Local Spaces, Global Logistics” explain that when middle-

and upper-class city dwellers fled to “capitalize on available land” (p. 3), this postwar

suburbanization ruined inner cities and robbed the overwhelmingly non-white residents of

low skilled manufacturing jobs. Consumers who could afford leisure with their higher

income soon became loyal patrons of the shopping mall. Capitalizing on this trend, more

centers sprung up and states began to promote and regulate them through funding and

surveillance.

The same source goes on to illustrate how “prime retailers” moving out of these

suburban malls directly correlates with segregation. Racialized groups, such as new

immigrant settlements, are relocating to the suburbs. This movement has led to a “decline

in social and material infrastructure” (p. 5), which the once-loyal patrons have now

abandoned.

When fast fashion revolutionized the supply chain by driving it by demand, Cowen

and Parlette admit that this also factors into shifting any risks in supply chain management

to retailers. “Less often considered,” they add, is the uncertainty that is cast on

communities. When category killers such as Wal-Mart began to “undertake their own

distribution and take control of the entire supply chain” in order to cut costs and maintain

their staple low pricing, it created a “low-wage service sector” in the developing countries

that they outsource to, costing the US millions of blue collar jobs in manufacturing. While
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this is somewhat offset by the 480,000 jobs Wal-Mart has created for the retail setting (p.

8), it is difficult for surrounding businesses to survive.

In its strategy to saturate the market and overtake existing businesses, nearby malls

have been forced to shut down. This “big-box ‘de-malling’ strategy essentially means they

buy into an existing site and close off the mall entrance, typically leaving the internal

corridor to die,” Cowen and Parlette write. “Once established, the box store will often

depart to a stand-alone site.”

Not all malls that compete with retail giants like Wal-Mart are forced to shut down.

Class and race distinctions have ensured this. Luxury malls in affluent neighborhoods still

stand. Enclosed malls that serve as a social space for communities, however, are sometimes

the only public area that people can gather. When stores are forced to shut down and leave

the mall gutted, mall closures can affect entire communities. Public space in dying malls is

either replaced with privatized commercial convenience or shut down completely, even

leading to demolitions (p. 14).

Caught in a Crisis

When did fashion start to go-----well, out of fashion? Authors Cowen and Parlette

describe the epidemic of failing brick-and-mortar post-war suburban shopping centers as

“dead malls.” These phantom plazas typically serve as “the only indoor spaces that offer

some degree of public access” (p. 2). Malls are where communities gather.

Brick-and-mortar stores are failing under increased pressure from e-commerce

sales and outlet malls. So far in 2017, over 3,600 store closures have taken place with

bankruptcies at a record high since the financial crisis of 2008. In the next five years alone,
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about 275 of the 1,100 shopping malls in the United States will be forced to close for good

(Taylor, E-commerce killing a quarter of US shopping malls says Credit Suisse).

If Wal-Mart is a model retailer, then their touted “omnichannel balance” seems to be

the answer (Taylor, Wal-Mart sees online sales surge, more shoppers at store as omnichannel

balance pleases). The method to this madness includes buying out startups, providing

incentives for in-store pickup, and altering shipping strategies. While authors Cowen and

Parlette peg Wal-Mart as the culprit to the string of “dead malls,” perhaps the retail giant is

simply strategizing better than some privately owned retail centers.

The Buckle, the company that the author of this essay is interning for now, is

celebrating its 50th year in retail. They have found ways to adapt to the pressure e-

commerce is putting on brick-and-mortar stores. With an up to date website and mobile

app to utilize, Guests have benefits such as reserving their sizes in-store, receiving

notifications of new freight in their preferred store, and connecting with a personal stylist

who shops for them. “Overall, the Guest has a better experience when they interact with a

properly trained Buckle employee and when we fulfill our mission statement,” says Dennis

Calahan, Buckle Store Manager of Store 251 in Saint Peters, Missouri. “That's what brings

people back.” He also explains that, in the face of mass store closures and bankruptcies,

closing their doors is not an immediate threat. The company is debt-free in the long term

and continues to push their pillar of recruiting both on and off the sales floor (D. Calahan,

personal communication, July 18, 2017).

Digital versus Destination

Destination stores will not cut it anymore. WGSN Global News Editor Nigel Taylor

reports that shopping centers themselves must serve as a destination for “activities and
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entertainment” if they are to successfully cater to Millennials and the younger, up and

coming crowd of Generation Z. In an industry that is riddled with cutthroat competition,

who would have thought that the means for their survival involves one united front?

Sandra Halliday, former Editor-In-Chief and current freelance journalist at WGSN, writes

that those belonging to Generation Z are “more likely to shop in-store” than any other

generational group due to the appeal of socializing and cash transactions. The retail climate that

digital giants such as Amazon has brought about may work now, but in the long term they will

have to answer to the effect their business has had on public shopping malls. As Generation Z

gains buying power over the years, they might just be the heroes shopping centers need.

Cutting Loses

Nike, one of the world’s largest athletic sportswear retailers and producers, is

cutting nearly 1,400 jobs within the company in order to get product to online customers

faster. Additionally, 25% of its product is being eliminated from their offering as Nike taps

into niche markets. The expected result is a “faster and more personal” connection with

loyal consumers (Halliday, 2017). This change directly affects the Buckle, which carries

exclusive Hurley merchandise. As Nike is the parent company of Hurley, this grants Nike

enough of a stake in Hurley to influence management and operations within the company.

As Nike’s own management structure is changing as part of their e-commerce

initiative, it is likely that Hurley’s will alter as well and face similar changes in their overall

business structure. Nike wants to focus their physical retail efforts in major cities such as

New York, London, Shanghai, Beijing, Barcelona, Los Angeles, Tokyo, Paris, Berlin, Mexico

City, Seoul, and Milan. This may mean that smaller towns such as Saint Peters, Missouri
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may receive less freight from Hurley as the company and their business initiatives

restructure.

Buckle, however, is all about creating deep, personal connections with each Guest. The

environment within store 251 is uncommon among typical retail settings. At Buckle,

Teammates truly cherish their Guests by creating consistent enjoyable shopping

experiences. The quality of service that they offer keep Guests coming back time and time

again. Personal connections are established with each Guest and a sense of urgency is

conveyed when showing product, as many of Buckle’s brands, such as Hurley, are exclusive

and limited. In the face of a tumultuous retail environment, Buckle might just be one of the

last stores standing as other retailers continue to convert completely to an online setting or

file for bankruptcy.

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Resources

Cowen, D. & Parlette, V. (2010). Dead Malls: Suburban Activism, Local Spaces, Global

Logistics. International Journal of Urban and Regional Research.

Halliday, S. (2017). Nike strategy shift means it will be faster, focused, fresher and more

digital. Retrieved 29 June 2017 from https://www-wgsn-

com.proxy.missouristate.edu/news/

Taylor, N. (2017). E-commerce killing a quarter of US shopping malls says Credit Suisse.

Retrieved 14 July 2017 from https://www-wgsn-

com.proxy.missouristate.edu/news/

Taylor, N. (2017). One in four US malls expected to close by 2022 – Credit Suisse. Retrieved

14 July 2017 from https://www-wgsn-com.proxy.missouristate.edu/news/

Taylor, N. (2017). Wal-Mart sees online sales surge, more shoppers at store as omnichannel

balance pleases. Retrieved 14 July from https://www-wgsn-

com.proxy.missouristate.edu/news/