Brick-and-mortar retail stores have been struggling in an age where buying something is as easy as a couple of touches on a smartphone.
The department stores that have traditionally anchored enclosed malls, like Macy's and JCPenney, have been shuttering locations nationwide. And mall-based chains like Wet Seal have been going bankrupt and leaving behind empty storefronts across the county, including in Northwest Indiana.
Chicago-based professional services firm JLL, or Jones Lang LaSalle, estimates retail investment plunged by 18.7 percent in 2016. And Fitch Ratings projects half of all retail sales growth will take place online this year, while in-store growth will be an anemic 1 percent.
National brands are likely to continue to close or reduce square footage locally, said Aaron McDermott, president of Latitude Commercial Real Estate, in Schererville. He said it's a result of the "Amazon effect that online shopping is having on retail around the country."
The shakeout has been particularly harsh for some Northwest Indiana malls. Marquette Mall, in Michigan City, which opened in the 1960s, finally closed the largely empty interior mall last year after a long, slow decline, though department stores Sears and Carson's remain open.
But others, notably Southlake Mall, in Hobart, have been able to adapt. Since Starwood Retail Partners acquired it in 2013, the super-regional mall at U.S. 30 has weathered the loss of longtime tenants and adapted to shifting tastes, by ushering in more contemporary favorites like H&M and Forever 21.
Malls feel ripple effect
But the challenges for malls will no doubt continue, as 2017 so far has been a rough year for retailers. The Limited, Wet Seal, MC Sports, and American Apparel all went under, and will collectively shutter more than 590 stores across the nation. Indianapolis-based HHGregg announced Thursday it would close 88 stores. Department store chains Macy's, JCPenney, Sears and Kmart have announced plans to close more than 500 stores in total nationwide this year because of flagging sales. Macy's has been actively seeking a buyer to get out from under its ongoing woes.
"If Warren Buffet is selling all of his stake in Wal-Mart I think that is a good sign that the future of retail is going to change significantly," McDermott said. "I believe the footprints of some of these retailers are going to reduce."
JCPenney, which has locations in Calumet City, Hobart and Valparaiso, still hasn't identified which of the 140 stores it will close over the next few months. The Texas-based chain, known for its frequent sales, already shuttered its anchor store in the long-struggling Marquette Mall in 2015.
Three of the five anchor businesses on Marquette Mall's sign on Franklin Street, including the restaurants Hibachi Grill and Fiesta Cancun, now sit empty. Much of the mall's parking lot is occupied by cars parked by travelers who take the airport express buses that pick up passengers there.
The River Oaks Center in Calumet City, which recently was acquired by Masson Asset Management Inc. and Namdar Realty Group, is down to just two remaining anchor department stores. It has been struggling since losing the Carson Pirie Scott and Sears anchors in 2013. While the mall's interior still bustles, with a wide variety of smaller shops and kiosk's offering a wide array of wares and services, much of the exterior is boarded up. And both of its remaining anchors, JCPenney and Macy's, have been closing stores nationwide for years.
The Maple Lane Mall in LaPorte, which once thrived with 20 stores and annual visits by Santa, will only have three businesses left, including a dollar store, when Kmart closes there at the end of the month. The mall on the town's west side also recently lost anchor tenant Al's Supermarket.
Amid all the closings, malls will have to adapt, consider untraditional tenants and offer experiences to keep drawing in customers, experts say. In addition to Southlake Mall in Hobart, the Lighthouse Place Premium Outlets, in Michigan City, has been keeping up with changing consumer preferences and appears to be in relatively healthy shape, with only a handful of vacant storefronts at any one time.
“Lighthouse Place Premium Outlets is continually scouting the latest and most relevant retail experiences for our shoppers," said Treveon Alexander, Outlets director of marketing and business development . "Changes in the marketplace offer us opportunities to add fresh and relevant new retail, dining and entertainment options that will serve the community.”
In addition to landing more contemporary favorites like H&M and Forever 21, the new management at Southlake Mall has lured in customers with promotions like gift card giveaways and its "Oh, So Simple Rewards" program that can be used at every store in the mall.
Southlake Mall recently added a White Barn Candle, La Senza, Jimmy Jazz and Maurices, and will soon get an outpost of the trendy Chicago barbecue restaurant Pork Chop. Last fall, the mall also opened the NWI Retail Training Lab, which hosts job fairs and has skills workshops for those interested in retail work. And it replaced the carousel in the center of the mall with a more modern digital river where people can skip virtual stones.
"Southlake Mall has been bringing in more restaurants and added that technology display, as malls have been trying to reinvent themselves," said Micah Pollak, Indiana University Northwest assistant professor of economics. "No new malls have been built in a decade. They're a problem as they exist now. As online retail takes off, malls have to look at making themselves physically more appealing and reinvent themselves."
A problem malls face is showrooming, where shoppers might come in to check out a laptop, but then shop around until they find the best price online, Pollak said. Huge malls with four department stores are rapidly becoming a thing of the past, but malls can remain relevant by bringing in community centers, restaurants and other attractions that will keep up foot traffic, he said.
Dead and struggling malls
Northwest Indiana is full of examples of malls that just couldn't keep up with the times and have shuttered or are just hanging on.
Most of the Woodmar Mall in Hammond has been razed except the iconic Woodmar sign on Indianapolis Boulevard and the Carson's Department Store. Hammond plans to develop a youth sports complex where the mall once stood. The 415,138-square-foot Century Mall on Broadway in Merrillville was once home to Goldblatt's and Montgomery Ward, but now is largely an empty box that's occasionally partly opened up for pop-up seasonal shops like a Halloween costume store last fall. The Village Shopping Center on Grant Street in Gary is almost completely hollowed out, with a few tenants like Rainbow NYC, Footaction, Kid's Foot Locker, Chuck Wheeler's Vienna Beef Hot Dogs, and Dollar Tree hanging on.
Brick-and-mortar stores aren't going to vanish anytime overnight, though, McDermott said. But malls are going to have to work with imagination to attract stores and keep them viable.
"For certain sectors, I think there is going to be a slow and steady trend downward," he said. "There is a floor to this as certain items consumers are still going to want to leave the couch to purchase. Not only that, but retail shopping is more than just purchasing goods; it is a social activity."