Anchor stores were once the lifeblood of the shopping mall, drawing both customers and other tenants. But retail and the malls have changed, and consumers are more likely to shop the smaller retailers in the mall than stop in at the big department stores.

The retail industry is bracing itself for a massive collapse. Over 200 malls are on the verge of a nervous breakdown – thanks to SEARS.

To regain the sales per square foot it had in 2006, adjusted for inflation, Sears would need to close 300, or 43%, of its Sears stores to regain the sales per square foot it had in 2006,  according to analyst Green Street.

Unfortunately, the US is still oversaturated with stores, at 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia — the next two countries with the highest retail space per capita, according to another analyst report.

How did it come to this?  

According to Columbia University retail studies professor Mark Cohen:

“The department store emporiums, filled with endless wonderment and tremendous assortments, were supplanted by the growth of the retail shopping mall, which put these stores as anchors but surrounded them with specialty stores. The department stores got tremendous value from being in the malls, but lost their franchise. Then the downtowns got decimated, so they lost their shoppers. Then the big-box players could move an enormous amount of volume. It’s not that the department stores had no chance. But they didn’t attempt to re-engineer themselves. By the time the internet came on, all but Nordstrom were late to the party and are still catching up. Meanwhile, there’s Amazon, a virtual marketplace that’s kind of like an infinite shopping mall, where you can get with one click anything you want to buy.”

Clearly, the road ahead for retail is extremely hazardous.  Is there a silver lining?

Meet Generation Z

Gen Z is emerging as a global consumer force. Retailers need to understand the ways these shoppers will differ from (and mirror) the Millennials, and whether the differences represent opportunities or challenges.

Don’t abandon stores. The store needs to be an experience that is an extension of the brand. Reimagine them to create a digitally connected, interactive and hyper-personalized physical shopping experience. Consider the ability of the sales associate to enhance the experience. The challenge for retailers is to move away from selling products and toward creating experiences and telling stories—finding innovative ways to participate.

Focus on “cool” social media. Videos and pictures are becoming more important than text for younger shoppers. Social media plays a central role in their lives and the expectation of constantly changing stories is becoming the norm. Yet young people are quick to move to the latest channel, so being nimble is key for retailers.

Woo with experiences and speed. Experiences should be something that Gen Zs will want to share. Consider partnering with 3rd party companies to enhance the customer experience. Coupling experience with speedy fulfillment will go a long way toward meeting this generation’s expectations.

Overload on feedback. Gen Zs value feedback from their family and friends, suggesting that retailers no longer own the review process. Brands should also look at collecting shopper product testimonial videos – an authentic approach that adds tremendous credibility. Social listening capabilities will be critical.

Get closer to the customer.  Gen Z shoppers are open to new shopping models. This is a real opportunity for retailers to secure new customer data. And gleaning insights successfully can increase the lifetime value of each customer.

Much like Millennials, Gen Zs are using technology available to them in their quest to purchase the perfect product in the perfect way, however, there are significant differences based on geography and culture.