Small retailers struggle as flagship stores abandon malls

Acres of mostly empty parking lots surround the east end of the Sooner Mall in Norman, Oklahoma. (Aimee Lewis/Gaylord News)

Hayden Head sits behind the bespoke wooden counter at Immersion House in the Sooner Mall six days a week. He spends most of his time trying to lure potential customers into the arcade, and the rest waiting for someone to enter.

The mall is not as crowded as it used to be. In fact, in the so-called “retail apocalypse”, more than 9,100 retail stores should close this year. This causes major problems not only for malls, but also for local businesses operating kiosks and restaurants that relied on this foot traffic to generate sales.

Gaylord NewsThis story was reported by Gaylord News, a Washington-based reporting project of the Gaylord College of Journalism and Mass Communication at the University of Oklahoma.

Shopping malls, once the favorite haunt of teenagers, are now shunned by this group as they find other sources of entertainment.

“The mall has days of being virtually empty,” Head, an Immersion House employee, said of the Norman Mall. “Shopping malls are no longer appealing to younger audiences.”

Immersion House is located at the east end of the Sooner Mall, near the now-closed flagship Sears store, which once contributed to foot traffic. Today, acres of mostly empty parking lots surround the east end of the 512,000 square foot mall.

Sears was one of the mall’s three pillars. The other two are Little Rock, Ark.-based department store Dillard and Plano, Texas-based financially-struggling JC Penney Co., which launched another renovation program and announced a loss in November. of $93 million in the third quarter.

The problems facing brick-and-mortar retailers are caused by a surge in online retail as online stores such as Amazon continue to grow.

Online retailers’ quarterly results tell the story. Amazon’s third-quarter sales rose 24% to $70 billion from the year-ago period.

“Retail has changed. Over the past 10 years, online sales have seen a huge increase,” said Scott Martin, President of the Normandy Chamber of Commerce. “Our local brick and mortar stores need to pivot.”

Sooner Mall isn’t the first to feel the stress. The now-closed Crossroads Mall in Oklahoma City served as a warning of what lay ahead when Dillard’s closed its department store there in 2008. Tulsa’s Eastgate Mall, which began its conversion into an office complex 13 years ago, is another example of the struggles of the retail industry.

Shopping malls have a lot of potential to pivot and evolve, as they have more space to work in. Flagship stores that close leave behind large spaces that can be converted into fitness centers or art galleries. Another way malls can revitalize comes in the form of location-based entertainment, which Immersion House offers through VR or VR gaming sessions.

Immersion House is a VR arcade that hosts four stations with a variety of games, from 3D drawing to Tilting brush to realistic races in Project Cars 2. Clients can choose 12 or 24 minute sessions. When the kids want to play, parents can drop them off and shop while their kids are busy.

“The surviving malls are very committed to this model of dining, retail and especially entertainment,” said Ryan Battles, co-owner of Immersion House. “Malls that thrive are leaning more toward entertainment or other options like fitness centers.”

The original plan for Immersion House was to have a brick and mortar location, but VR headsets were very new in 2016 when they opened. They turned to the mall, thinking it was a good inexpensive way to prove their concept, gain exposure, and also provide the mall with additional traffic. However, working with Sooner Mall’s property managers proved difficult.

“Working with malls is like… You know how people talk about dealing with car salesmen? That’s how it is,” said Tarek Dina, the other co-owner of Immersion House.

Not only have they paid way too much for their lease, he said, but they are not focused on the success of individual businesses.

The mall, owned by New York-based Brookfield Properties, declined to comment.

Places like Immersion House offer ways to help the mall pivot, Battles said, but the mall has to be willing to work with them.

“Malls were already struggling across the country, so they should have been looking for solutions like us, concepts like us, to help increase their traffic,” Battles said. “It should have been a time for a great opportunity, but instead they tried to take us for whatever they could.”