This chapter discusses several firms in the retailing environment. Strategy Highlight 6.2 for example covers the struggles JCPenney has had in recent years and the closing of 140 stores across the United States. JC Penney is far from alone in having performance challenges. By March 2017, 21 retailers (including Macy’s, Sears, and The Limited) had announced the closure of over 3,500 stores affecting more than 50,000 jobs just in 2017. Several factors are impacting the retailing industry. For example, consumer behavior in developed countries is shifting from shopping trips to social experiences. In 2016 the amount of money spent in restaurants and bars for the first time surpassed that spent in grocery stores across the United States. Complicating matters for stores such as JCPenney, Macy’s, and Nordstrom, which are largely based in malls, is a 2017 report that showed the United States had 1,200 malls and probably needs less than 900. On a per capita basis, the United States has 40 percent more shopping space than Canada and a remarkable 1,000 percent more than Germany.

The retail department store is clearly a red ocean space right now. Your team has been asked to consult for Simon Property Group (SPG in NYSE), one of the largest U.S. operators of shopping malls. The company wants to know how its mall space could be repurposed. What blue ocean ideas can your team develop to present to the executives at Simon? Consider the positives and negatives of typical mall sizes and locations in your answer. Stretch beyond traditional retailing for ideas to consider.