By Brick or Click
With a surge in online shopping, what place does the mall have in the modern landscape of western Pennsylvania? Is it here to stay, or is it edging its way toward obsolescence?
The zombies knew. They realized it before any of us. It was during George A. Romero’s Pittsburgh-filmed Dawn of the Dead, way back in 1978, that they showed us all. In a post-apocalyptic world, hordes of the undead overran Monroeville Mall, shambling around its sprawling parking lot, trying desperately to get in.
They succeeded, of course. Before the film ended, there were zombies in front of Foxmoor Casuals, leaning against the Piercing Pagoda, staggering past Equibank, hanging out by the Brown Derby Steakery and Luv Pub, and pawing at the glass doors of J.C. Penney.
“What are they doing? Why do they come here?” Francine, the lead female character, asks her beau, Stephen, as they take refuge in the mall.
“Some kind of instinct. Memory. What they used to do,” he says. “This was an important place in their lives.”
And in ours, too.
In the nearly four decades since Dawn of the Dead wrapped, the shopping mall became a cornerstone of America’s culture — and of Pittsburgh’s as well. From Century III up to Ross Park and Cranberry, from The Mall at Robinson all the way east to the Galleria at Pittsburgh Mills, down to South Hills Village and the same Monroeville Mall where the undead once roamed, malls today are many things. They’re bastions of humanity, centers of commerce, places to gather and experience and buy, to watch the comings and goings of your fellow man, and maybe, just maybe, to build your own teddy bear.
Something is popping up at the edge of the horizon, though, and it’s not the evil dead.
A bruising recession spent much of the past four years draining wallets of disposable income. Empty stores are a fact of life at some local malls, and big-box chains lurk at the fringes, ready to pounce. Online commerce — the ability to order your heart’s desire from your La-Z-Boy with a few taps and clicks — has turned shopping into a solitary pursuit. Mobile apps enable shoppers to walk into stores, browse merchandise and then find its cheaper equivalent in the palms of their hands — without paying sales tax. The brick has been supplanted by the click, and the game is changing.
Are malls becoming “physical catalogs?”
Late last year, Amazon brought forth Price Check, a mobile app that struck fear into the hearts of many in the retail industry. You can take Price Check with you while you shop and share prices you find in various stores. Amazon uses your feedback to keep prices competitive for all customers.
In other words: Go to the store, look at what they have, then see how cheap you can get it online. Not necessarily great for malls.
“People are window-shopping at the mall. They go and see a $400 jacket and say, ‘I can find this cheaper online,’” says Samantha Gray-Pelch, 43, an insightful shopper who resides in Shaler Township. “They’re starting to use the mall as a physical catalog.”
The marketplace’s elbows are sharp. Threats to the late-20th-century model of go-to-the-mall-and-buy-stuff are legion these days. Among them:
Sales Tax
By ordering products online, you avoid paying the sales tax that stores in malls must collect. Pennsylvania’s lack of a clothing sales tax helps this, but it’s still a problem. Simon Property Group Inc., the largest real-estate company in the country, owns Ross Park Mall and South Hills Village, and is suing one state to make it tax Amazon just as it does retail stores.
Faltering Anchor Stores
The “anchors” (big stores that are located in prominent spots in most area malls) often help a shopping center maintain its health. But some are struggling. In December, Sears’ parent company announced that it would close at least 100 stores, including some in Pittsburgh. And in January, J.C. Penney’s new CEO said he would be “fundamentally reimagining every aspect of the company’s business.”
The Recession and its Aftermath
Disposable income isn’t what it used to be for many of us. And we’re still jittery, though we’re becoming less so. Americans’ consumer spending grew at a 2-percent annual rate in the final three months of 2011 — a positive but hardly resounding number.
Power-Strip Centers and Big-Box Stores
The Wal-Marts, Targets and Best Buys of the world, which coexist with malls but are rarely inside them, also can siphon off business from mall-style specialty stores by offering huge selections and lower prices. Several discounters banded together during the holidays to run an ad on Pittsburgh television stations that explicitly told shoppers to save money by rejecting the mall. To the tune of “Up on the Housetop,” it sang: “Out of the mall, quick, quick, quick — pay far less for the same great gifts.”
Changing Owners
Century III Mall recently switched hands from Simon Property Group to Jones Lang LaSalle in what local media described as an indication that the generation-old West Mifflin mall was struggling.
Potential Boredom
If a mall doesn’t have new things all the time, it runs the risk of being left behind. Thus, malls have to remain on the lookout for fresh mixes of retail and experience. “To continue to grow an asset like a shopping center, you have to be constantly changing and improving,” says Lisa Earl, the manager of Ross Park Mall.
Online obstacle course
Figures differ, but they all point toward the same thing: Not only is the percentage of online shopping rising, but Web sales are cutting into brick-and-mortar purchasing. On Christmas Day 2011, according to IBM, online shopping rose by 16.4 percent from the previous year.
Here’s a glimpse of what Pittsburgh’s malls have to fear, courtesy of Tammy Myers-Putman, 43, of New Kensington: “Every Christmas present that I bought this year was purchased from QVC, Amazon or the Home Shopping Network,” she says. “The stores in the malls seem like cookie-cutter houses. They’re all the same. I can find unique things online.”
Malls generally don’t release sales figures, but a spot-check of regional locations over several days in December and January — during holiday shopping and in the weeks after — suggests a mixed picture. Some malls were all but empty, studded with empty storefronts and ringed with empty parking spaces. Others varied dramatically by store. Brookstone was usually bustling, for example, and the Ross Park Apple store, which opened in 2010 to a line of 2,000 people, was always packed.
But at many locations, specialty fashion stores were populated only by clerks straightening the racks. Only a couple of malls were crowded. In fact, some of the region’s biggest malls have one or two dozen empty storefronts. And yet one indicator, “sales per square foot,” is surging back.
Merchants at local malls won’t talk on the record (they cite corporate policy), but many say it’s hit or miss: They hear shoppers talk of better prices online, but they’ll often see them decide to buy on the spot. They can’t, however, track those shoppers who didn’t come to the mall in the first place.
Taken together, these factors compose quite the obstacle course. Without potent tenants and reasons to visit, a mall can be imperiled.
“The malls that don’t remain unique and diverse, and bolster their tenant mix will struggle to remain viable in the long term,” says Herky Pollock, Executive Vice President & Northeast Director Retailer Services Group of CBRE and a close watcher of the area’s retail landscape.
Students at LIM College in New York recently conducted a survey about shopping trends, and the results were presented at the National Retail Federation’s convention in January. Turns out that 68 percent of the 18- to 25-year-olds surveyed prefer physical stores over online shopping when they’re looking for clothes and shoes. Additionally, 66 percent of that group is using the Internet to browse and compare prices.
In a world of clicks, they still like bricks. For malls and their retailer tenants, that suggests opportunity.
Innovation increases footfall
If you think American Eagle Outfitters is just a store, you’d be right — and wrong. The Pittsburgh-based clothing retailer, a staple in malls across the nation, is in the middle of an ambitious project that would entice and attract younger customers across all its platforms. That means not only in stores but also on smartphones and tablets, on laptops and social networks — and sometimes more than one at a time.
If you’re an AE shopper, you can buy a shirt at the store and, in the same transaction, purchase the pants online and get free shipping. With iPhone apps for American Eagle and its sub-brands, you can range through a store and scan product codes with your mobile device, then get more details (plus customer reviews) in an instant.
Instead of treating online shopping as a threat, American Eagle is embracing it.
“There’s no question that online is an amazing opportunity for our customers to find out what’s going on in our stores. We view it that way as much as we do a channel to buy product,” says Fred Grover, AEO Corp.’s Executive Vice President for more than 30 years.
That’s the buzz phrase these days for many malls and their retailers: “integration across channels.” It means that the mall becomes the centerpiece of a “multiplatform brand experience.” It means the location-based shopping app Shopkick can work with retailers and malls, allowing consumers to collect points for visiting mall stores and convert them into gift cards for anyplace, from Old Navy to Sports Authority.
From high-tech innovations to community engagement, malls and their tenants are looking everywhere these days, trying everything to maintain dominance by staying ahead of the fickle finger of fad and fashion.
One popular approach is to attach “non-fronting tenants” — big-ticket occupants that don’t open directly into the mall but entice customers as a department store would. Ross Park Mall did that with Crate & Barrel and L.L. Bean. Monroeville Mall has a newer section called “The District” that is effectively a mall within a mall, anchored by such businesses as Barnes & Noble, Jos. A. Bank and two high-end restaurants; it is also planning to add a 12-screen movie theater by 2013.
“We’re finding different ways to keep people here,” says Jerry Crites, general manager of the Frazer Township mall. That means an ITT Technical Institute branch, Cinemark theater and Sunday services at a mall branch of Riverside Community Church. Even the township offices and police department are located in the mall.
But perhaps the most audacious plan came from Ross Park Mall. In 2008 and 2009, after Nordstrom opened, it effectively rebooted the place to become a luxury destination — in the middle of a recession.
The gambit seems to be working: Ross Park is consistently packed to the gills, particularly with young shoppers, and stores from Tiffany & Co. to Abercrombie & Fitch thrive. These days, the place draws shoppers from northeastern Ohio, West Virginia — and even Ontario.
“People said, ‘Oh — you’re gonna fail,’” says Earl. “But the opposite has happened.”
What will the mall of the future look like?
When George Romero set Dawn of the Dead in Monroeville Mall, he was making a pointed jab at an increasingly consumerist nation. The zombies — mindless shoppers shambling around the retail space — were supposed to be us.
Today’s reality is different. We’ve become Consumer Nation for sure, but our mall shoppers are not mindless; they’re smarter than ever. Abetted by technology, shoppers are going where the bargains are, playing the immersion games, behaving exactly the way they want to — sometimes confounding retailers but always thinking. They’re not eating brains; they’re using them.
But will they keep using ’em at the malls of Pittsburgh? Or will the power-strip and lifestyle centers, the big boxes, the deep discounters and the Internet chip away at the mall until it becomes yesterday’s news?
Pollock doesn’t think so. After all, he says, we are something of a cradle of mall culture here in Pittsburgh — Northway Mall, Monroeville Mall and South Hills Village were among the nation’s first.
“The difference here is that suburban Pittsburghers grew up shopping at their regional mall. That was their neighborhood, their retail destination much earlier than anywhere else,” Pollock says. “We’re very loyal to our malls because we have fond memories of shopping there for our entire life.”
That’s what mall shopping today is all about, isn’t it? The making of fond memories. Where once we ran errands, now we share the retail experience. It will be up to the historians to judge us on that, but in the meantime, the pithiest words we can use to end this meditation about malls probably come from the sign at the Monroeville Mall entrance. It’s simple, it’s direct, it’s clear.
“Shop more,” it says. And we will. What could be more American than that?
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Ted Anthony, a veteran writer and editor, has reported from more than 20 countries and 47 U.S. states. He lives in Allison Park.
