Prior to COVID-19 becoming the biggest threat to the longevity of shopping malls, many considered Amazon to be the largest opposition that was putting a clock on how much longer brick-and-mortar stores would survive. So it’s quite a strange twist to hear that some shopping malls may now be looking to partner with Amazon by giving them space to install distribution centers alongside their typical retailers.
As reported by Esther Fung of the Wall Street Journal, Simon Property Group (owner of the King of Prussia Mall) is contemplating a bold move in possibly turning vacant department stores at their malls into distribution centers for Amazon.
Department stores are typically considered the “anchor” stores of malls, the locations that draw in the most customers who may then patronize the smaller retailers during their shopping trip. Considering giving an anchor store to an online retailer (and a perceived competitor, no less) is unheard of.
The King of Prussia Mall currently has a J.C. Penney that is no longer in business. This means if the Simon Property Group does go through with this move, Pennsylvania could become one of the first test spots for this idea.
It’s a risky proposal, but it could be the kind of original thinking that proves malls have options other than just slowing their inevitable demise.
If the money that Amazon pays to have their distribution center in the mall is greater than what a department store brings in, then the move could be justified.
However, the risk is that the smaller retailers lose confidence in setting up shop in a mall that isn’t bolstered by a big name department store.
Worse yet, some stores will undoubtedly not be pleased about having to share space with the company they hear is going to is taking their customers away.
The smaller retailers may decide to pick up and move to a different mall if they feel slighted by the decision. Simon Property Group certainly doesn’t want to cause an exodus with their existing stores.
For their part, the Simon Property Group is staying quiet on the rumors, refusing to offer any public comment on their validity.
Read more about Simon Property Group’s potential partnership with Amazon at the Wall Street Journal by clicking here.
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