The demand for retail space in the US is on a steep decline. As vacancies rise, property owners scramble to find new tenants, especially in malls. A recent trend sees former stored transformed into co-working office space. But there’s still room for creative retail, particularly for eCommerce companies debuting new products.
The square footage left vacant by store closures in the US this year will most definitely exceed that of 2017. In fact, by May, retailers had left 95 million square feet open, just shy of the 110 million square feet in all of 2017. The shift in consumer behavior to a mix of online and in-store purchases is forcing real estate holders to come up with different uses for all that free retail space.
A significant portion of that empty space likely will be lost to retail forever. There simply is no reason to stock aisles of shelves across many branches when people are shopping more and more from home. Mall operators, consequently, are reconfiguring those empty stores as coworking office spaces. One estimate predicts that by 2023, at least 3.4 million square feet of empty retail space will be coworking locations.
That still leaves a lot of space available, and businesses are finding ways to make it work for new kinds of retail. They see these vacancies as perfect locations for eCommerce to field test new products and sales models. In the last few years, new businesses have sprung up to find space for eCommerce companies planning pop up stores. And one particular business is turning mall space into a kind of retail incubator. The goal of the business is to help eCommerce businesses test their physical retail models.