Why Failing Malls Will Be a Boon for Startups

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Malls have been losing revenue because ecommerce giants like Amazon have increased online sales. The convenience of shopping from home led to this pattern shift in customer behavior. Now Simon Malls has introduced a new program to offer shorter, cheaper leases to small businesses and startups looking to acquire new customers.

This change will bring about a financial revolution for new businesses or startups. This is due to the more dynamic leasing terms, visibility and potential networking opportunities for fellow startups.

The Price is Right for Startups

Retail leases can be quite expensive, and that’s not good for business in a slowing economy. When malls lower the prices and shorten required terms, this offers more financial flexibility to small businesses. Small businesses can then use retail space to test out new concepts, rake up a faster profit and potentially reinvest in purchasing another space within the same mall or another branch. Lowering the threshold for startups and small businesses will accelerate the positive feedback loop for growth and produce a steady flow of profit for businesses as well as for Simon Malls.

Location, Location, Location!

If a new physical store exists but does not have a presence in a high traffic area, that business will likely fail. A location within a mall for a startup or small business would be ideal, because people often go to malls with the intention of spending money. If a business has a decent product and has a line present at the cash register, more people tend to be attracted to the business — if only to satisfy their curiosity. A new gym or restaurant would benefit greatly from this, because these businesses focus on people. Gaining just a few clients would be enough social proof to attract some of the vast amounts of visitors who frequent malls.

The Power of the Network

With reduced costs, many more startups can access neighboring retail space at the same time. This opens the door for potential partnerships that could pool advertising funds in order to save money. Startups can also split the cost of one retail space or cross-promote each others’ services to boost sales among their shared customers. Even if startups do not decide to partner with each other, having the ability to simply observe the techniques of other new businesses might be the difference between success and failure.

Take Your Online Store Offline

If you are just starting your e-commerce store, or are looking to test your apparel business in an offline retail environment, it can provide you an exceptional opportunity to test the waters without having to go all in. Of course, if you are just starting your apparel business, it can also build awareness in ways that you might not otherwise have. The overhead costs can potentially still be significant, but by calculating the value of sales ROI along with your brand awareness and exposure from the natural marketing opportunities of foot traffic, you may find the price is right.

If you are just getting started in e-commerce, we have developed a guide to starting your first e-commerce company. Let us know if we can help you fuel the growth of your startup business.

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