Just about every town that we live in has a mall. The mall has a collection of stores that if we need a specific thing, we know that we can visit the mall to get. There are generally food courts and movie theaters there also that cause us to visit the mall. Malls just seem to always be there. Until they aren’t. It turns out that malls can fail and just go away. The product managers who are in charge of the mall have a real challenge here. What makes a mall fail and how can a product manager change their product development definition to avoid this happening to their mall?
What Makes A Mall Fail?
When people are coming to your mall to shop, it’s a great time to be a mall product manager. However, if people start to stay away from your mall then things can turn ugly very quickly. The arrival of the internet has very clearly not been a good thing for the stores that occupy a mall; however, somewhat surprisingly studies have shown that this is not the reason that there have been mall failures. Instead, it turns out that malls die because of other malls. If that happens, it’s not going to look good on anyone’s product manager resume.
What seems to do a mall in is when they find themselves competing with another mall. An older mall will struggle because the newer mall offers the stores in it more modern features. This attracts a broader selection of stores and that causes more customers to want to come to the more modern mall and leaves the older mall with fewer customers. The older malls were generally built in the mid-1970’s while the newer malls were built in the late 1970’s to the early 1990’s. The newer malls were better able to capitalize on changing demographics and customer transportation options.
This of course leads to the key question: what kills a mall? The answer turns out to be the loss of an anchor store. This sets a domino process into motion. The closing of an anchor store causes fewer customers to come to a mall. This will then lead to more stores in the mall having to close. The result of this will be that even fewer customers will then come to the mall. When an anchor store moves from an older mall to a newer mall it creates a tipping point to be reached that caused the older mall to start to fail. The malls that fail are more often than not either the fourth or even the fifth mall in a town that does not have a population that can support that much shopping.
How Can A Mall Be Saved?
When a mall closes, that’s not the end of the mall. Many different things can be done with the property. They can be turned into strip centers, open air shopping centers, civic centers, or even residential living spaces. Malls that fail average 752,000 square feet in size while newer modern malls average 1.2 million square feet for a Class A mall or 910,000 square feet for a Class B mall.
Mall product managers have had to deal with threats to the mall in the past. Twenty years ago the Blockbuster video rental chain was eating away at the revenue of the movie theatres in the mall. At the same time the big-box stores were taking business away from the smaller standalone stores. These days mall product managers have to deal with issues such as a slow-down in purchases after the latest recession, the overbuilding of retail centers, and the investments that are being made in online shopping channels.
When a mall gets built, the product managers expect that it will be part of the community that it serves for 40 years or longer. There are malls today that have celebrated their 50th and 60th anniversaries. Mall product managers view their malls as being a type of community hub. What this means is that as market shifts start to occur, the mall product managers have to create new customer offerings. They have to do this in order to keep up with their customer’s changing behaviors and expectations.
What All Of This Means For You
Mall product managers face some serious challenges. Their product is a very big and complex product that serves the needs of an entire community. It acts as a hub and you would think that it would always be there. However, it is possible for a mall to fail and our product manager job description tells us that product managers need to understand why this can happen.
When a mall fails, it’s not because their customers all started to do their shopping online. Instead, more often than not, the reason is because they lost customers to another local mall. The newer malls were built more recently and have more modern features. What can cause a mall to fail is the loss of one of its anchor stores. Closed malls get turned into other types of retail operations. Mall product managers have had to deal with a number of different challenges over the years. Malls exist for a long time, but they do need to adjust to changes in their customer’s behavior.
The product that you are in charge of may not be as large as a mall. However, just like mall product managers we need to be aware that often our greatest completion comes from other products that look very much like our product. Like mall product managers, we need to watch our customers and when they start to change, we need to change our product to meet their evolving needs.
Question For You: If your mall lost an anchor store, what could you do to quickly replace it?
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What We’ll Be Talking About Next Time
Wouldn’t it be great to be a product manager at Starbucks? Well, if you liked coffee it would be a great job. For the past few years, Starbucks has been experiencing a 5% growth in their stores. However, in the past year this number has started to slip. Clearly the Starbucks product managers need to do something. What should they do to boost growth once again? How should they change their product development definition?