AFTER THE BELL: Reports of the death of the retail shopping mall have been greatly exaggerated

I wonder if you remember those moments when it seemed that actually going to a shop to get what you wanted would never really happen again.

It might well be tinged with those difficult moments of the pandemic, but for me, even after that I wondered if in fact the days of “going shopping” were done.

That feeling was accompanied by the roar of motorbikes through my neighbourhood – Amazon had finally arrived with a dotcoza address, and Shein and Temu were suddenly ruling the roost.

A byword for dysfunction

Fourways Mall was a byword for dysfunction, with leaks and darkness and the world’s worst parking lot. No matter where you looked there was some ProNutro eater like me claiming the glory days of physical retail were over.

Well, no one is eating that cereal any more.

Instead, it seems that physical retail has made some kind of a massive comeback. Yesterday, the Clicks Group said it was paying quite a lot of money for a controlling share in beauty retailer ARC.

The group only has a grand total of 12 stores. But there are big plans to expand that.

When you consider that our beauty industry is generally valued at about $4.2-billion a year (R69-billion), you can see why.

And while you can buy most beauty products online, you can’t try them out, use someone else’s mirror and take your friends shopping with you for the whole experience.

This morning the Vukile Property Fund released their six-month results for the first half of their financial year.

They show that for the past three months their trading densities across their South African malls were all above 5% (trading density is the measure of sales revenue per square metre of retail space).

They’re also pretty chuffed with their low rate of vacancies.

Someone else who should be incredibly chuffed with how things are going are the people who run Fourways Mall. Their turnaround has gone so well they’re attracting new clients and their trading densities have increased dramatically. This week they have new stores opening, including a branch of that suddenly upper-middle-class staple, The Pantry.

In the meantime, online sales are still doing well. Many WhatsApp groups report that Amazon is the new cheapest place to buy anything big and electronic or hard to find.

The logistics that underpin these e-commerce services are incredible.

Last year, amid a thicket of suitcases and bags and dogs, my wife and I realised we’d forgotten to properly purchase a pricey electronic device deemed absolutely necessary for high school.

More in desperation than in hope, we ordered it and prayed it would arrive in the four days before we left. Only for it to be present on our property at precisely 7.03 the next morning.

When something like that happens it’s hard to not go back to it regularly.

That said, there are some signs that in fact some parts of online retail are struggling. Yesterday, the Hong Kong-based fast fashion site Shein confirmed that its profit margin is now just 2%, while its sales in key markets like the EU and the US are slipping significantly.

Textile industry

This is a far cry from the days when we believed our textile industry was about to literally disappear before us.

The reason for that is pretty obvious. Governments around the world have started to act to protect their industries.

One of the key problems for Shein is that the EU and the US have now enacted de minimis rules that mean you have to pay a customs duty on smaller packages from Shein and Temu.

And, I think customers are also becoming a little smarter. Yes, Shein and Temu will give you what you want at an unbeatable price. But it won’t last for long, and in the end you might as well buy three of whatever it is to get the longer-term use of it.

As a generation of shoppers who’ve tried it get older and slightly wiser, they might well be looking for slightly more expensive items that are going to last a lot longer.

Of course, none of this is cast in stone. The physical retail sector is going to have to compete on the experience. They will have to make their malls a place you actually want to go to.

This is exactly what happened with what were then called “department stores” in New York and London over a hundred years ago. They became palaces, where a person who lived in little more than a shack could go and spend a whole day surrounded by luxury.

Fourways Mall seems to have done this really well, they’ve made going there an experience you want to repeat. Perhaps the lesson is that shopping, like life, is going to remain both. It will be virtual and digital. But it will also be physical.

Which means the shopping mall has plenty of kick in it yet. DM