After my haircut, I went to the Willow Grove mall to see what it looked like. I had recently read an article in the WSJ about property values plummeting and how $100 million dollar properties were being auctioned off for $9 million. This isn’t news as e-commerce has broken physical retail locations down to a mere shadow of their former selves. Here’s my two cents.
I wrote this post in 2014 about the same topic predicting Teavana would close in 1 year, it took 4.
What’s In a Store
I was curious the cost of space in a mall and it’s $18-30 per square foot. Our business is looking for space and it’s closer to $10-15, so mall space is a premium because of the retail nature. Simply, you are paying more to be there, so you better be selling. How can a physical location sell more than an e-commerce store set up to sell nationally? Cleary it can’t.
The Selfie Museum
Beautiful display. Clean. Thoughtful. How could this possibly not make money? Business model is artificially creating a space and charging to take a selfie? If rent is $5,000 a month, we need to sell 100 selfies a month at $50 per pop to break even. That sounds expensive. A selfie may cost $20, so I need to sell 250 selfies a month. That’s 8 a day, or 1 an hour, for 30 days. This doesn’t even count paying employees so we need double that to make a living wage. If you made it my life mission to sell 2 selfies an hour for $20 each, I think I could do it, but I would be in desperation sell mode coming up with ideas like taking a staged picture with a hot blond to send to a jealous ex.
Against All Odds
I like the storefront and layout. I sort of like the name (if it’s a play on whether they will survive or not). They sell (hard to find?) hats and clothing. Problem targeted, average sale is too low to keep up with rent. These goods aren’t unique enough to charge $100 for a Phillies hat. I can’t pay rent on $19 tee-shirts. Failure incoming from the physical side unless there is an e-commerce portion of the business. I reviewed their website and it’s down. Short it.
I’m a sucker for sports memorabilia even though I own zero. This is at least a business that can work on the physical side, while also being able to generate revenue through the web (see the front sign). I personally don’t get the autographing world, but I can see margins in it if you procure desirable items at one price and can set any price that someone is willing to pay. That’s nice about this model. I’d be drawing people to the higher priced items in the storefront with the most unique items.
People want experience. I went inside this monstrosity and they had a bowling alley, mini golf, shitty arcade games, and some dining area. Plus it was two floors. If I was a kid, maybe I’d think this is bad ass. As an adult, this would be a place if I wanted to have one last drink before killing myself because I’ve sunk so low.
What Kind of Signs are These?
If I saw that sign on the left, I’d run as far away from that store as possible. No store owner should ever let that be displayed. That’s the epitome of an unprofessional approach to business and I’d never buy a single item from that store.
The sign on the right saying to buy black is ostracizing customers. The person creating the sign, I’d imagine a black business owner, thinks that this sign will drum up business. Perhaps, but most people buy goods because they want the goods, they don’t care who sells it to them. This strategy is adding an element that is asking too much of an average mall shopper. I’d sell more on the merit of the product.
So what did I think after my visit? I had a scenario in Bloomingdales where I was walking around and there were 20 employees and 1 shopper, me. It was really, really, uncomfortable for me as all I wanted to do was look at some clothes without feeling like a had 40 eyeballs on me. I left without purchasing. Perhaps my weekday visit was uncommon of mall traffic but it was dead as a doornail smalls. The days of shopping at a physical location are coming to a close. I’d be demoing these old malls and hoping places like KoP will survive. Concluding my stay, I had a beer at the Yard House and watched golf so I was still happy.