International Council of Shopping Centers CEO Thomas McGee told The Miami Herald that the ongoing message that shopping malls and center are coming to an end isn’t quite true.
Instead, he said that while people think of shopping centers as endangered, they are actually just evolving.
“There is stress in the department store segment and closures. When you look at those stores as a percentage of retail square footage, it’s small,” McGee said during the interview with the paper. “But those spaces are big and prominent, and they need to be handled in a systematic way.”
Retail is so ingrained in the everyday lives of consumers that seeing big-box retailers close their doors draws a lot of attention, but McGee noted that it’s just representative of the ongoing transition retail has always gone through.
“Retailers have gone in and out of spaces for over a hundred years,” he said. “What is happening today isn’t different. Clearly there are opportunities and challenges the industry needs to address, but overall it is quite healthy.”
McGee also pointed out that while technology is having an impact, online shopping still remains a small piece of the retail pie.
“There are lots of physical retailers with their own online channels. There is integration taking place in the industry around technology, and it is not just about people buying things online,” he explained.
One trend that he said often gets overlooked is the number of online-only retailers that make the move to opening up physical storefronts.
From Warby Parker to Amazon, online retailers are seeing the benefits that can come with operating a brick-and-mortar space.
“The economics of operating online-only in retail is challenging. The cost of distribution and customer acquisition is hard to generate when you’re online-only,” McGee added.