Growth of e-commerce affects Long Island malls

By Danielle Tomlinson and Rosemary An


Major malls and veteran retailers on Long Island have held a revolving door to shops opening and then going out of business. A result of a major spike in the business of e-commerce. 

Brookstone company closed their Smith Haven Mall location in Lake Grove last week as they move towards operating solely through an online platform, following a trend of mass store closings across Long Island.

The rise in e-commerce, or online shopping, is the largest contributing factor to the disintegration of malls and brick and mortar stores, according to Bloomberg News.

In a tweet from Aug. 2nd, the Brookstone company announced that they will be closing all stores outside of 35 airport locations, shifting to online-only orders.

Large department stores are slowly disappearing from across Long Island. In September 2017, the Huntington Square Mall lost Sears and Sunrise Mall lost J.C. Penney last June when the company announced they will be closing 138 of their stores nationally.

According to V12Data reports,  51% of Americans prefer to shop online rather than in-store.

The Simon Property Group, which owns major Long Island malls, including Smith Haven and Roosevelt Field, saw a quarterly year-over-year decline in foot traffic from -5.4% to -6.2% in 2017, according to a Thasos company report.

Declining mall traffic is even contributing to stores that would otherwise be unaffected by e-commerce.

Starbucks announced last year that they will close all 379 of their Teavana locations, solely due to the underperformance of mall-based stores. “Despite our efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue,” CEO Kevin Johnson said in a press release.

But brick and mortar businesses are losing foot traffic from causes besides e-commerce, too. Customers would much rather shop in the privacy of their home to avoid interaction with store associates.

“This generation prefers using technology to shop instead of going to the store,” Whitney Minnich, a store associate from the clothing brand Hollister, said. “We have a lot of online orders that people pick up in the store every day.”

Store associates have noticed that the online shopping trend has negatively impacted profits from retail locations. “It’s easier to find cheaper things online because you can compare prices between different stores at the same time,” Minnich added.

Ironically enough, store employees themselves have begun to prefer the online shopping experience. “There’s usually a ton of online coupons when I shop on the website. We are definitely losing customers to our online store because of the deals, wider selection, and to avoid dealing with us,” Victoria Zvinys, a GNC employee at Smith Haven Mall, said.

Clothing sales amount to almost 17% of the total revenue generated by e-commerce. The percentage expected to rise to 35% by 2030, according to Credit Suisse, a multinational investment bank company.

Some say the physical marketplace places obstacles in front of consumers. With strictly assigned gender fitting rooms and a lack of privacy in a consumer’s shopping experience, some transgender shoppers seek asylum in online shopping. Shoppers conflicted with the prevalent social stigmas are less inclined to shop in malls.

“Trans-individuals especially don’t wanna go into a store and try on different gender clothes and have people staring at them,” Owen Dreger, a member of LGBTA, the Lesbian, Gay, Bisexual, Transgender Alliance, said. Instead, these shoppers can try clothes on at home without the possibility of an awkward encounter in the dressing room.

Companies are beginning to adapt to the new marketplace. Apple has tailored their store experience for the modern customer by using services like additional product maintenance to match online customer service.

“We do the repairs in-store instead of sending it out to a facility. Instead of someone waiting like a week or so to get their phone back in the mail to be repaired or replaced, our technicians can do it in the store in about two hours,” Trina Ruan, an Apple technical specialist at the Smith Haven Mall, said.

The outcome of stores closing has created a rise in temporary pop-up shops from popular online retailers. Many are expected to fill vacancies in Long Island malls for the approaching holiday season. Lululemon, a luxury athletic apparel company has already leased space for a pop-up shop in the Smith Haven Mall, opening on October 15th, according to the Simon Mall company website.