Matthew Yglesias has a short little article about how J.C. Penny is killing wifi in their stores, one of the things Ron Johnson put in place during his very short tenure:
I can think of no better example of how Ron Johnson destroyed J.C. Penney than the company’s slightly ridiculous plan to offer free Wi-Fi in all its stores. That this was a bad idea is not the reason the store’s been struggling. But the fact that Johnson couldn’t see that this simply isn’t something his customers would have any real desire to take advantage of spoke volumes about the strategic errors happening in Penneyland.
I’m not sure this was such a stupid move by Johnson. Speaking to a guy at the American Marketing Association conference in New Orleans last week, he made the point that in many of these giant stores (he used to work at Target), the cell coverage is so bad that wifi is the only way to get coverage and potentially do something interesting with customers’ mobile phones in store. If we assume that mobile research will be an important part of buying in the future then it might turn out they’ll just have to go back and reinstall all that wifi anyway.
Interesting perspective (and data) on the effect of online retailing and the general environment on malls:
I agree with the above perspectives, although I believe they likely understate the eventual impact on malls. A report from Co-Star observes that there are more than 200 malls with over 250,000 square feet that have vacancy rates of 35% or higher, a “clear marker for shopping center distress.” These malls are becoming ghost towns. They are not viable now and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.
Living in New York it’s easy to forget the importance of malls in retail. Haven’t ever completely understood why that is exactly, but the malls in New York (the only two I can think of off the top of my head are South Street Seaport and Herald Square) feel like afterthoughts and are filled with stores that feel out of place in an otherwise retail-hungry city.