Shoes, Jewelry, and Cars? What’s Going On in Malls Today?

The regional mall industry in the U.S. has undergone significant changes over the past 10 years, with even more changes likely to occur soon. As department stores close and ancillary tenants chose to move outside of malls to strip center locations, regional shopping mall operators are anxiously looking for new tenant opportunities.

Ford’s announcement that they were planning to follow-up on efforts in Canada, Italy, Germany, and Belgium and open a showroom in a “mall to be named later” in the U.S. is intriguing. We have all experienced local dealerships placing new cars in mall corridors of B and C malls; this would take that considerably further by having staff available to answer questions, and having test cars positioned in the parking lot.

According to Isabelle Helms, vice president of research and market intelligence at Cox Automotive, “This is a tremendous period of change for the dealers. This started several years back. Every year, the number of dealerships visited by car buyers declines.”

While the notion of mall dealerships is intriguing, there are a number of logistical and legal constraints that will serve to limit its effectiveness. Dealerships derive significant sales and profit from used car sales and service – neither of those will be accommodated within a regional mall. Furthermore, most dealerships are franchisees – any efforts by an automobile manufacturer to generate new car sales leads will need to determine how to allocate any such leads between nearby dealerships.

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