WisContext: The Collateral Damage Of Declining Department Stores (And Malls)

Wisconsin’s unemployment rate of 2.9 percent in May 2018 might suggest prosperous economic conditions for the laid-off workers to fall back on, but Kashian says it is not all about the numbers.

“It isn’t simply 2,200 jobs in a state with millions of jobs. It’s jobs in every community across the state,” Kashian said.

“It’s easy to say ‘well we have a very low unemployment rate, therefore they can go and do something else.’ I go back to the question of maybe they don’t want to — maybe they love their job,” Kashian added. “We have to have a little bit of concern and empathy for the people who worked at Boston Store in a social sense.”

However, retail observers aren’t entirely fatalistic about online sellers wiping out physical stores.

“Some stores have been able to adapt and compete,” Marquette University marketing Professor Felicia Miller said in an April 23 interview with Wisconsin Public Radio’s “The Morning Show.” Miller discussed how some retailers, such as Walmart, have shifted to a greater online presence to compete with Amazon.

“It’s the reality of staying competitive,” Miller said. “You have to do these things. The stores that haven’t done it have done so to their peril.”

Kashian is optimistic too. He said “anchor stores” are designed to provide a desired destination to get people in the door of the malls, after which they ideally shop at specialty stores. Where anchor stores were once the answer, Kashian said malls now have to find new ways to overcome shoppers’ growing tendency to park and shop at only one store at a time.

With or without the trends working against them, Bon-Ton stores may have had more fundamental problems. The chain had not been profitable for years. Wisconsin School of Business Professor Hart Posen argued in an April 20 interview with Wisconsin Public Radio’s “Central Time” that the company wasn’t competing very effectively with its retail peers, to say nothing of online challengers.

“Really the fundamental problem at Bon-Ton was there was nothing distinctive about them,” Posen said. “They weren’t low-price, they didn’t have the best selection, they didn’t have the best customer service. There was nothing that would really make you go into a Bon-Ton store … Bon-Ton would have been in trouble, I think, regardless.”

An answer to this challenge, Miller said, is to move away from only retail.

“Retail is moving toward a multi-purpose model where you not only have shopping, but you also have entertainment — restaurants, bars, movie theaters — you have other things that will draw people to that space,” Miller said.

Retails spaces around the state are already seeing a need to get creative. In Madison, a new Dave and Busters has taken over what was formerly part of a Sears department store, and the Janesville Mall filled space left by JC Penney with a new breed of anchor stores — Dick’s Sporting Goods and Ulta Beauty — retailers whose “stars are rising.”

In Wausau too, as the Wall Street Journal described, retailers are trying to provide unique shopping experiences that differ from the usual mainstays. For example, a store in the central Wisconsin city, The Local, brings together 30 local artists and provides them a storefront through which to sell their work. It’s located about a block away from the Wausau Center, a downtown mall that has seen of its anchor stores close: Sears, JCPenny and now Younkers with the Bon-Ton liquidation. The city is in the midst of reenvisioning future uses for the mall and its footprint in the heart of the city.

“I don’t think it’s the death knell of brick and mortar, but I think brick and mortar has to respond,” Kashian said.

The Collateral Damage Of Declining Department Stores (And Malls) was originally published on WisContext which produced the article in a partnership between Wisconsin Public Radio, Wisconsin Public Television and Cooperative Extension.