By Bob Sillick
For my major client, Media Group Online, I write more than 200 reports annually (and have written all of its reports since January 2014) on a wide range of topics: marketing, advertising, retail, media, the auto industry, digital media, e-commerce and technology. Approximately 150 of those reports are each for a different retail/business sector (department stores, banking, construction/real estate, restaurants, travel, etc.).
As you might imagine, it has been very difficult to share much positive information about many of these retail/business sectors during the pandemic. For many sales plummeted during March and April, and then rebounded during May and June, but are in jeopardy again as of mid-July.
The Current State of the Shopping Mall Industry
I recently wrote the annual report for the Shopping Mall Industry, which is obviously suffering, as many anchor stores (predominately department stores) had already been closing locations before the pandemic. Many more stores are expected to close during 2020 and beyond. Plus, a long list of national chains have also filed for bankruptcy protection and many have been unable to pay any of their rent, have made partial payments or deferred them until 2021.
During April 2020, Green Street Advisors said it expects half of all anchor department stores to close by the end of 2021. A retail consultant recently forecasted 34% to 50% of all malls will also close by the end of 2021. CBL & Associates, one of the largest mall owners, announced July 15th that it was preparing to file for Chapter 11 bankruptcy. It was only able to collect 27% of April rents from its retail tenants, and May’s collections may “improve” to 30%.
The big players in the shopping mall industry have been scrambling for years to transition their business model from relying on anchor stores to adding what is called in the industry “retailtainment.” These include activities (laser tag, trampoline parks), live music and other cultural events and “relaxation” services (spas) to increase foot traffic for existing tenants and to replace lost revenues from exited tenants.
How CBD Products Could Help Save the Shopping Mall Industry
As health & wellness becomes more important to many people, more of them are discovering the benefits of CBD products – and now many would welcome stores selling those products at shopping malls. Are you listening shopping mall owners?
That is one of the major findings of a March 2020 consumer survey from the International Council of Shopping Centers (ICSC). A majority of consumers in all generational categories approved of shops that primarily selling CBD products in shopping malls. Approximately half or more would also like to see legal medical/recreational dispensaries in malls too.
|I generally have a favorable view toward cannabis-related products and their health and wellness benefits
|I would welcome shops primarily selling products infused with CBD for personal care/wellness in shopping centers
|I would welcome legal marijuana dispensaries for medical/recreational use in shopping centers
International Council of Shopping Centers, April 2020
Interestingly, the percentages of Baby Boomers in these perspective categories almost match the younger generations’, especially approving of CBD shops in shopping malls.
Traditional retailers in shopping malls currently selling CBD products or considering adding them may be pleased to discover 81% of the respondents to the ICSC survey said offering those products wouldn’t change their perception of the business. In fact, 31% said it would actually create a more positive image of the company.
According to the Annual Marijuana Business Factbook 2019, CBD products sales are forecast to increase from $4 billion during 2019 to $24.4 billion by 2025. Based on reports of significant increases in CBD products sales during the pandemic period, the 2025 forecast may be reached much sooner.
Clearly, for retailers of all sizes and merchandise categories, rebounding from the pandemic will require creative thinking and a more forward-leaning mindset. Shopping malls have an opportunity to help transition the retail sector to a more stable future and create a more progressive and responsive array of tenants.
For more information and insight on cannabis and CBD marketing, become a CMA member today!
About the Author
Bob Sillick is a marketing/advertising professional with 46 years of experience as an agency partner, copywriter, creative director, audio/video producer, publication editor and has been a contract content researcher, writer, editor and manager since 2010. He is also a member of CMA. Bob recently moved to Longmont, CO and is adding the cannabis industry to his knowledge base and résumé by becoming a member of the Association and attending and participating in Denver area industry activities.