Social commerce impacts the entire retail marketplace from the retailer to the consumer all outlets in between including real estate, food services and entertainment services. Consumer changes related to the expansion and embrace of social commerce are impacting the viability of large legacy retailers along with the small and mid-size regional type retailers to meet the consumer shopping and purchasing changes. Real estate is impacted because these social commerce changes are causing a reduction in consumers that shop in all types of malls and especially the large malls that are anchored by the large legacy retailers. Food and entertainment services are collateral impacts related to the reductions in consumers shopping in all types of malls.
The impact of social commerce on large legacy retailers has already impacted the real estate market for malls in the form of dramatic reductions in consumer mall traffic and also closing of anchor stores in many malls. This is requiring mall management to develop a new strategy to bring consumers back to the mall and this requires retailers to incorporate consumer social commerce practices into their strategy. We may be coming into a time where large malls are not shopping havens that depend on large legacy retailers for traffic. It seems that the small specialty retailers are not impacted as much by the consumer changes brought by social commerce and this must be taken into account.
This doesn’t take into account the impact on food and entertainment services. Reductions in mall traffic and shifting to eCommerce purchasing is also dramatically impacting the food and entertainment services. The reductions in traffic, along with streaming video services is impacting the mall related food and entertainment services as well. These changes require the related food and entertainment services that depended on mall traffic to also retool and develop new methods to draw consumers. Whatever the outcome of these changes you can rest assured that there will be a cost to the reals estate.
It seems that malls are becoming gathering places for teens that have no other outlet, they are too old to want to stay at home and too young to have the means to explore other entertainment options. In addition to this they are also not economically capable to support malls with their increased presence in the mall. These teens and young adults are simply using the mall as a place to gather and interact rather than engage in the ‘normal’ mall economic activities. Generally their economic activities consist of food and drink purchases from the food court. The food court has turned into the gathering place and this is further impacting traffic to the malls.
There is a ripple effect across the entire marketplace brought on by consumer social commerce and this is, in turn, driving changes into the entire marketplace. Consumers have embraced the social commerce practices and now the marketplace is struggling to reconcile and adjust to these changes. The cost to the market will also be dramatic to adjust to these changes as changes are implemented to address the consumer demands. This shake-out in the marketplace impacts all participants including employment and at this point it is difficult to foresee the endgame and quite frankly I don’t really know if there is what would normally be considered an endgame in the cards for the market.
And now for the audience participation portion of the show…
ECommerce will have wide ranging impacts on both the retail and manufacturing sectors. How can you focus these abilities to improve the consumer's experience? Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes. In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas. How can you support these continuously changing requirements?