Crisis of American malls already affects Europe

If when United States sneezes we get pneumonia in Europe, it is better for us to understand how we buy if we want to survive what is coming down.

Everyone (or almost everyone) is aware of the speed at which the business is changing and how many, even the biggest, are getting in the way. And If not then ask Radioshacks, (the American technology giant that eventually sold itself), Abercrombie & Fitch (which plans to close 60 more stores in US) or the great Michael Kors (which will close within 15% of its stores) among many many others. Almost “nothing”.

store-closings
Pic by: The American Genius | One of the 1.000 Radioshacks which has closed in US.

The clousure of physical stores is not all. American malls are truly bearing the brunt. As JP Morgan, the largest bank in The United States, “satellite data indicate weak activity in retail locations.” That resounding was its caption after analysing 284,000 photographs made by satellites compared over three years: mall’s parking centers are running out of steam.

Reality can not be more devasting. Consumption habits transformation of the first world economy are chamging by leaps and bounds and they are leading to the extinction of what for almost five decades was one of the icons os American economy and society: the mall center. More than 500 are completely in ruins in The United States ans 1 in 3 are expected to close their doors within ten years. This has been protrayed by photographer Seph Lawless, author of “Autopsy of America: The Death of a Nation” across the length and breadth the country.

While in Europe the situation is not THAT critical for the moment, the infection is beginning to spread. This crisis in thousands of American establishments has been noted on the other side of the Atlantic, where major brands also begin to close or have problems.

Surrounding to the particular case of Spain, some of the first brands to hang the closing down have been Blanco and Caramelo. Dutch brand, C&A has closed already 23 out of 100 stores in Spain and Cortefiel and Adolfo Domínguez go throungh a reduction of cost, shops and of course, staff.

Screen shot of blanco.com

In the case of the United Kingdom, the situation as defined by The Telegraph: “The retail sector is struggling.” Large British chain stores BHS closed its doors throwing 10,000 workers out of job despite multiple attemts to save the company; Next suffered its first fall in eight years since the begining of the crisis of how the great John Lewis is cutting jobs and its famous “bonus for employees”, leaving them at levels of 1954.

Shoppers-walk-in-a-BHS-store-in-London
Pic by: getsurrey.co.uk | Customers taking advantage of the last sales in BHS.

Being online is not enough for some brands. With this panorama where the barriers between the physical and the digital world are increasingly diffuse and customers want everything even faster, it is absolutely necessary for brands going one step ahead and demostrate agility facing changes of consumption and tastes.

In such distressing panorama, some brands have managed not only to save themselves but continuing breaking records. The rise of m-commerce and the influence of new only-online brands like Asos, Missguided or Boohoo, are winning over the traditional actors in the retail world. Data speaks for itself: only in Europe more than €600 billions will be spend in digital purchases in 2017 (14% more than 2016) and where more than 75% of European population has already done any purchase on mobile, at least in one occasion.

One of the best examples of companies trying to get further the future os Amazon.com, the American giant known by everyone who started selling books and now they are everywhere, they even own supermarkets!

In this list must be present Zara, whose online and offline sales soared 15% last year in addition to continuing to open new stores around the World. Primark should not be forgotten  either. Although it does not sell online, has mainteined a positive trend since 2007 earning 5.9 billion pounds of revenue in 2016.

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