shopping malls an endangered species

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(Edited)


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We have seen that with the arrival of the pandemic worldwide, many were the changes that occurred at different levels: such as economic, social and cultural. At present, some countries such as the United States are still in the period of establishing or experiencing the transition of each of these changes.
One of them is in the economic sector, of course this topic covers many important points, but today I only bring you one in particular, which is in the economic sector: Shopping centers.

a great ROI


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These, in the past, were the boom for many investors who were betting on the safe side. Since this strategy consisted of finding and buying an extension of space to build these shopping centers.
After making a millionaire investment in building the shopping center, the negotiations came either in sales or rental of said spaces within it. But this was no longer enough, it became very popular because some Mortgage securitization bonds began to be listed.

Beginning of the end

However, for the year 2008 there was a huge drop in sales in the shopping centers as many stores such as Macys or Jc Penny were abandoning their spaces and closing their doors.
This began a silent deterioration as some tenants or owners of other stores felt the emptiness and as sales fell, because obviously there were not the same number of visits from consumers.

The Final Lunge


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But this began to worsen from 2020 with the arrival of the virus and the application of some security measures such as distancing.
Many stores migrated to the web and began making the transition of making every sale online with a catalog. This allowed the consumer to experience safety and comfort from home to make their purchases.
Some stores closed their doors, their physical spaces and it seemed better to carry all the management of sales online. They found many positive reasons and realized that there are more advantages such as: not paying rent, reducing the number of workers, reducing some taxes.
But this is an issue that in the United States becomes very worrying because the large number of shopping centers that were being built and others that were in full negotiation have been halted.

The entrance of the colossi


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Companies like Amazon conducted a survey to measure and collect data and information, they noticed that people are much more compulsive to buy online, they like the fact of filling their pantry and waiting for it to be sent home.
In addition, they also noticed that they are not young people who are making these purchases, they are people with an age range between 45 years and 55 years. This data is important since this level of consumers was not very important for shopping centers.
Returning to the main point, we want to emphasize that shopping centers are very likely to be coming to an end as we have known, this business model is no longer feasible, promising and profitable.
For this reason, large stores such as JC Penney and Kmart had the modality of catalog sales and sent to any region of the country through the mail or courier service of the buyer's choice.
This allowed many customers around the nation to make their purchases without the need to move from their home or office, perhaps the delivery of the order took a few days, but in some cases the consumer did not mind waiting.
All these variables were corrected by those stores and today one of the corrected variables is the delivery of orders that is made almost immediately and the wait is even reduced to hours.

A repeating trend

This problem also covers part of Europe, such as Germany. Who is also being harmed by this effect and some large brand stores have already begun to close their doors due to the rise in rental prices.
This is significantly affecting neighboring merchants because there are almost no visits from new or regular consumers.
So what is left for those small entrepreneurs who have a store in a shopping center, today they are still fighting with some promotions and encouraging the visit to the shopping center. As few stores offer a discount if you buy it in their physical stores.
But it is easier for big brands to close their stores and simply create digital marketing strategies, create a virtual space where people can make their personalized purchases and then send them that shipment.

What is happening in other regions


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But this is not happening all over the world, countries like Norway internet sales are not so popular, their shopping centers are still booming. This fact is due to the fact that this country has always been organized in terms of economic levels.
That is why some brands are injecting into these countries to open more stores or bring more new merchandise to them.
So if you have the purchasing power, you can look for those countries where this phenomenon of shopping center drops has not yet been affected or bet on how new and innovative the creation of your online store is.

It may be a good option


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If you are an entrepreneur, the best option may be the online store, you must still make an investment, but you must make some improvements or changes so that you can adapt to electronic consumption.
The customer is much more demanding and you must have a catalog where it is easy to access to make your purchase.
The world is changing and even business models too, those that once worked and brought so much popularity are coming to an end. We have a living example of the movie theater that were previously full or overflowing on weekends, but are currently being replaced by digital channels such as: HBO Go, Netflix, etc.
And just as the large film companies had to adapt to this new concept in order to survive.

Posted Using LeoFinance Beta



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