It looks like our American shopping malls are on their last legs.
Online shopping has become so popular with consumers that brick-and-mortar stores face a questionable future.
A report released by the federal government last week showed that Americans are slowly but surely spending more money per month. They are eating out more often and buying more expensive products, for a total of 1.3% growth.
Yet beyond eating at local restaurants, the report indicates that more consumers are opening their wallets for online retailers in particular. The companies benefiting within the past year were Amazon and eBay, among other large Internet enterprises.
Spending at these retailers grew almost 11% since last year, and this directly correlates to periods when mall giants like J.C Penney, Kohls, Nordstrom and Macy’s reported lower sales.
Because of the convenience online shopping offers, customers can buy anything at anytime.
But that doesn’t just go for small impulse buys here and there. The report indicates that many consumers are even making large investment purchases online. In fact, consumers are even turning to the internet to buy vehicles, with recent statistics showing that 15 million cars are sold annually through websites such as eBay Motors, Cars.com, CarsDirect.com, and AutoTrader.com
There is even an app, Wyper, that is specifically for purchasing vehicles over the Internet. Marketed as the “Tinder for Cars,” Wyper allows consumers to easily swipe through profiles of cars of all shapes and sizes.
Apps like Wyper are giving traditional brick-and-mortar stores and car dealerships a run for their money. The stores just can’t compete anymore and are closing their doors leaving malls and plazas empty.
In 2000, every dollar spent at a physical store amounted to 30 cents spent on online retailers and mail-order businesses. Fast forward to today, and the online market is up to 70 cents for every dollar spent.
Marshal Cohen, chief industry analyst at the NPD Group, believes this trend has no where to go but up. He tells ABC, “We have yet to learn the ramifications of just how paramount these shifts in consumer behavior are. This is a cultural shift from the younger generation that is only going to carry forward.”