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Shopping malls need to figure out how to move forward

Trend-Forward founder Dave Nemeth says bricks-and-mortar retailers are losing tenants and need to do longer-term planning and start doing ‘things never done before’.

 

SIMON BROWN: I’m chatting now with David Nemeth, the founder of Trend-Forward. Dave, I appreciate your early morning time. You had a great piece (on Retailing Africa, here), “Rethinking the role of the mall”. I’ve chatted with some of the listed property companies around this. My previous guest was talking around how so much more is happening online. The pandemic, the lockdown forced us into some areas we might not have normally been comfortable with, but we had no choice. We couldn’t leave home, we had to learn how to use the online part. Malls took a hit and they are really going to need to figure out how they fit into the new reality as we move forward.

DAVE NEMETH: Good morning, Simon, and thank you very much. Yes, that’s quite right. We are well aware that we were forced to go online. So even those that would be very, very uncomfortable doing this were forced into a situation, and they are now comfortable with it.

I think that is important to say that bricks and mortar will never die. We need to understand that, okay.

There’ve been a lot of reports on the ‘death of the mall’ and the ‘death of bricks and mortar’ – that’s not going to happen. But at this point in time a lot of malls are in serious trouble.

You can see it. Go to any of your big malls and you just see empty stores – which you’ve probably never seen before.

SIMON BROWN: That’s the point. Malls need the foot traffic in order to attract the tenants. They need the tenants in order to attract the foot traffic. It’s that sort of never ending circle – and they’ve got to resolve this issue. If I’m going to buy something, they need to attract me to that bricks and mortar. It’s going to be the experience because, let’s say, I’m buying a vinyl LP or whatever it might be, a pair of shoes or something, I can do it online. I can do it bricks and mortar. That experience is what’s going to be the difference.

DAVE NEMETH: Well, this is exactly it. I think a lot of mall owners are kind of leaving that up to the individual retailers, and we see retailers really trying to push the boundaries and have a wonderful online presence doing virtual things and doing whatever they can. But that’s not good enough if the mall isn’t attracting people to it. So the mall has to start thinking, as it were, and it’s really going to have to start doing things that it has never done before.

I speak about having an online store which is linked to the mall itself. Obviously that is a very costly exercise and you couldn’t put every single product on, but you could curate monthly products theme-based, for instance, events that are online.

But it’s no longer good enough for malls to just have an online presence and to be saying, you know what, visit this store – they’ve got a sale on, or visit that store, they’ve got a sale on. They are going to have to reach out and say: “Come to us because this is what we can do for you.”

SIMON BROWN: I get that, because I sit here in Joburg and I’ve got a preponderance of malls I can go to, and they want me to go to their particular mall. Let’s assume they’ve got the tenant mix that appeals to me – they’ve got to make that appeal.

You do talk around ideas I love – sort of a space within malls, almost maybe having a park in a sense. Those food courts are not attractive places. Yes, we eat there because it’s convenient, but make it something that’s attractive, make it, I don’t know, picnics. Get people saying hey, let’s go and spend some hours, maybe a day at the mall, rather than just pop in, grab what you need and exit again.

DAVE NEMETH: That’s exactly it. They’ve got to become far more human-centric. They can’t just base themselves on what’s happening internationally. We as South Africans love the outdoors. We like open spaces. I speak about biophilia. Biophilia is a trend whereby we are bringing plants indoors. So whether it’s park areas, whatever it is, cater for a full day’s outing. Cater for people being able to do things that don’t necessarily have to cost an arm and a leg, and they will end up spending in your mall anyway.

SIMON BROWN: They’ll spend that time there and be entertained, and it’ll be a space where we can actually have fun. Some of these are quick, easy wins. You talk around having themes. It’s just been April, so we do an Easter theme. It’s coming into autumn, spring, on the other side. Those are the easier wins. Some of this is going to, however, take a fair challenge in terms of time, in terms of budget for these malls, in terms of fundamentally changing how they currently exist and look.

DAVE NEMETH: Correct.

I think the key here is for each and every one of the bigger malls to start putting project teams together which include outside people, inside people, outside marketers, you name it, and go all the way from the quick wins to the stuff that’s really going to cost a lot of money and maybe a five- to 10-year plan.

But start having a plan of what to do. I don’t believe the mall owners at the moment have a concrete plan. I think it’s a hit-and-miss, let’s have a quick concert, and let’s put up a big screen and show some movies. It’s not good enough. There has to be a strategic plan here.

SIMON BROWN: That was going to be my next question. You’ve answered it. I was going to say: are we seeing it happen? The answer is maybe we are not. It’s still kind of a hit-and-miss thing. We need to get, as you say, a better strategic plan, a bigger long-term plan. I like that key point: bricks and mortar is not going away, but how are you going to get me to your bricks and mortar versus the one down the road?

Dave Nemeth, founder of Trend-Forward, I really appreciate the time.

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Start by ending paid parking! If you purchase at a store in the mall, you should get your parking validated and not have to pay.

agreed, it is crazy. One of the listed RITs was trying this, but then the pandemic arrived and now we pay again to spend money ?!

All retailers in malls need to pressure mall owners to substantially reduce rentals to lower their overheads. Retailers will have accept middle to high end consumers can virtually everything they need on-line so incentivise them to return to malls

This argument is a lame duck. People don’t shop/not because of a R10.
Besides – who must provide security and shade for your car then?

Malls and retailers need to innovate for sure – but parking is far from the problem.

Why not just have free parking in the hot sun, and paid parking in a basement if you really think this will be the death/survival of a mall.

Doesn’t SA have one of the highest ratios of mall space per capita in the world?

Yup… But with lower disposable income per person it’s crazy!

We have the perfect digital solution to this problem offering an interactive, personal and micro advertising platform were people can interact with each and every store individually, receive instore coupons and various different offerings i.e. coupons, geo-notifications on sales, push notifications, free parking coupons from the individual stores or mall etc etc etc. Driving feet back to the mall. So now not only Sandton or Mall Of Africa can go online and create a digital environment that pushes traffic back to their Mall. Everyone can!

End of comments.

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