Jeff Jordan writes,
Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.
Pointer from Tyler Cowen.
It used to be that a mall was lots of stores with a few places to eat tacked on as an afterthought. Now it’s the other way around.
It’s not just that people are buying more stuff online. They are buying less stuff (as a share of income), period. This is partly a long-term trend, as documented by economic historian Robert Fogel and picked up on by Nick Schulz and myself. It may be accentuated by information technology–think of all the stuff you don’t have to buy now because of digital technology: books, bookshelves, radios, music discs or tapes, stereo systems, calculators…
“Less stuff” cuts across all income categories, too. One may see beautiful homes with very little inside to accumulate dust – it could be someone’s allergies or just that the inhabitants are too busy with work and life in general to relate to home settings in such a way. And at lower income brackets, moving in with family under one roof can stop “stuff” buying almost completely. Thrift stores offer excellent examples of the things people no longer have room for in their lives, and when the recession hit, quality of certain necessary goods in those stores immediately went down, as quantity of not so necessary goods increased dramatically.