Are Shopping Malls Making a Comeback?
Changes in consumer habits, including online shopping, started taking a toll on shopping mall sales early in the 21st century.
Changes in consumer habits, including online shopping, started taking a toll on shopping mall sales early in the 21st century. In fact, Credit Suisse predicted in 2017 that by 2022, almost one out of every four shopping malls would close. Then came Covid-19. In 2020, online retailers saw a 30% increase in sales from pre-pandemic 2019, pushing shopping malls to the brink of extinction.i
But wait—there’s a heartbeat on the monitor. Malls are seeing an increase in traffic in 2022, with U.S. malls and outlet centers reporting an occupancy rate of 93.9% as of June 2022, up from 91.8% a year before. So far this year, 4,432 stores have announced openings compared to 1,954 closures, resulting in a net of 2,478 openings. “We’re seeing a big rebound in Vegas, Florida is on fire...California is finding its legs,” says Simon Property CEO David Simon.ii
Why the Resurrection?
Online shopping is convenient. You can sit in your pajamas on the sofa and order cereal, Chinese food, and a new pair of cargo pants–all delivered to your doorstep in a matter of hours or days. What online shopping doesn’t offer, however, is a way to be with other people. Shopping malls allow consumers to escape the confines of their homes and to interact with something other than a phone or tablet. Humans, after all, are social animals.iii
"Shoptainment"
Shopping malls, and their thousands of retailers, have caught on: People will be drawn out of their houses and into shopping malls if you can offer them a unique experience. “We’re seeing a fundamental reimagining of what the mall is for,” says Ethan Chernofsky, an executive with analytics firm Placer.ai. “We see this shift to more types of entertainment, more interesting food and beverage, and then we see a fairly direct impact on business,” he continues.iv
Dubbed “shoptainment,” younger consumers are attracted to the entertainment of shopping. The pandemic, which restricted their social lives for so long, has fueled this desire to have fun, social experiences. According to Refinery 29, half of all retailers have undergone some sort of renovation since the pandemic. Some of these changes are cosmetic–smaller stores with upscale customer service like concierges with drinks and snacks. Other changes integrate the digital world with brick and mortar. Amazon Style, for example, allows shoppers to select clothing they want to try on, in-store, on an app. Savage X Fenty stores use augmented reality to scan shoppers’ bodies in 3-D to ensure the best fit. Big-brand retailer Nordstrom also is doubling down on the customer experience, hosting pop-ins with emerging designers so shoppers can have a more engaging experience.v
Shopping malls aren’t just for shopping anymore either. Popular TV show “American Ninja Warrior,” for instance, opened an adventure park in Santa Ana, California’s MainPlace Mall. The park allows mall-goers to try obstacle course challenges that are similar to those on television. MainPlace Mall saw its monthly visitors jump by 18% compared to the same period before the pandemic.vi
The moral of the story is that shopping mall retailers are changing their strategy in order to persevere in an increasingly online world. Will shoptainment be enough to resurrect ailing malls though? Consumers will deliver their judgment soon.
Sources
i A. Scott and R. Cunningham, “Rumors of the death of the American mall may have been greatly exaggerated,”
Marketplace, June 27, 2022, https://www.marketplace.org/2022/06/27/rumors-of-the-death-of-the-american-mall-may-have-been-greatly-exaggerated/.
ii L. Thomas, “Mall owners say retailers are still opening stores in spite of recession fears,” CNBC, August 2, 2022,
iii See K. Martin, “The Most American Form of Architecture Isn’t Going Anywhere,” The Atlantic, June 21, 2022,
https://www.theatlantic.com/books/archive/2022/06/meet-me-by-the-fountain-malls-book-review/661340/.
iv J. Verdon, “The Pandemic Didn’t Kill Malls. It Made Them Smarter, Traffic Report Shows,” Forbes, September 4,
v C. Whitwell, “Why Everyone Wants To Hang Out At The Mall — Again,” Refinery 29, March 1, 2022,
https://www.refinery29.com/en-us/2022/03/10863252/american-malls-2022-comeback.
vi J. Verdon, “The Pandemic Didn’t Kill Malls. It Made Them Smarter, Traffic Report Shows,” Forbes, September 4,
