The Shopping Mall of the Future
These days, the shopping mall industry just can’t seem to shake the doom and gloom headlines. According to Business Insider, a “Retail Apocalypse” has officially hit America. While it’s true that declining in-store sales are forcing some retailers to close stores, those headlines don’t tell the full story. Jumping to the conclusion that it’s “the end of the world” for the modern American mall discounts their potential to adapt and thrive in today’s world. Given the socioeconomic impact that shopping centers have on our communities, we should celebrate and encourage their potential to adapt – not discourage it.
At StreetLight, we know how important shopping malls are for our communities, and we’re committed to building the tools they need to thrive. When malls and shopping centers close their doors, towns and cities don’t just lose a place to shop. People lose a place to connect to face-to-face and communities lose employers. Abandoned shopping malls can even become hotspots for petty crime. But that doesn’t have to be the future of the shopping mall.
The successful malls of the future will be those that recognize the changing desires of today’s consumers, then adapt to meet them. In this blog post, we will share a few ways for real estate and shopping center professionals to turn today’s shopping centers into the malls of the future.
From T.J. MAXX to Amazon, it’s no secret that Americans’ shopping habits have changed. That means it’s time for malls to become more than shopping malls. To that end, we’ve identified two broad strategies that malls can pursue for success in today and in the future:
- Turning Malls Into an Experience
- Expanding Into New Industries
In the following paragraphs, we’ll explain these two strategies and add context with specific, real-world examples.
Turning Malls into an Experience
Consumers today are buying more experiences than durable goods. Millennials, like us, care a lot more about having new, Instagram-able experiences than luxury handbags. The cookie-cutter shopping meccas that our parents gravitated towards all look the same, and they definitely won’t spice up our social media feeds. But that’s a fixable problem!
To get consumers excited about coming to a mall, it needs to offer something unique – a feature that they can’t find in other physical stores or online. At “The Grove” shopping center in Los Angeles, for example, the art deco movie theater hearkens back to the city’s roots. It features ushers in uniforms reminiscent of 1920s along with thoughtful décor and architectural details. This unique, old-school vibe gives consumers a reason to head to the mall for their Friday night movie instead of streaming Netflix on their couch.
However, these attractions don’t have to be amenities that are commonly associated with malls, like movie theaters. Here are a few ideas to consider:
- Art exhibitions
- Adult learning programs and classes
- Make-up and apparel “make-over” competitions
Another place to experiment is in the food court – or rather, outside of it. Most consumers associate malls with fast food like Sbarro’s Pizza and Panda Express. we love pizza and Chinese food, but online ordering has become a lot more convenient than going to the mall. The food court is all about convenience, not an experience. However, if a shopping mall nearby had a restaurant with date night potential or the next cronut, that would get us in the door.
It’s time for malls to think beyond traditional quick-service restaurants alone, and start looking at restaurants that are destinations in their own right. For example, at the Streets of Tanasbourne in Hillsboro, Oregon, you can dine at Shogun, a sushi and sake bar, explore Thai cuisine at Ma-Now, or enjoy locally-produced craft beers at the Thirsty Lion. These types of restaurants tend to deliver a more exciting and enticing experience than the traditional food court.
Even in New York City, the Time Warner Center (an upscale shopping center) hosts one of the city’s most expensive and critically acclaimed restaurants, Per Se. While not every mall will have a top-rated restaurant, this kind of dining experience attracts people who might not otherwise walk in. While it doesn’t have to be that fancy, it does have to be different and exciting. Supplementing quick-and-easy food court standbys with new, trendy restaurants can help you broaden your mall’s audience.
Expanding into New Industries
Think your mall needs more than experiences to compete? In that case, consider incorporating a new type of retail industry into your shopping center. Consumers aren’t shopping or congregating at malls the way they used to, but malls can be more than rendezvous points and stores. Depending on your visitors, you may choose to dedicate your entire mall to a new industry, or you may convert just one section or wing.
Like malls, gyms and the entire fitness and health industry are changing, too. Millennials are transforming how Americans work out, and it is no longer as popular for consumers to go to their local gym every day. Group fitness classes like Soul Cycle, Pure Barre, Crossfit, and more are on the rise. According to Entrepreneur, “from 2014 to 2015, use of the ballet-inspired Barre grew 3 percent, SoulCycle grew 38 percent and high-intensity impact training rose 14 percent.” With health clubs and classes bringing in $24.2 billion in 2014, this is a market that malls and shopping centers should try to capitalize on.
By adding fitness classes, sports stores, and healthy eateries, a fast-growing (and potentially new) audience of active Americans will be drawn to your shopping center for a full lifestyle experience. You’re not only potentially bringing in more revenue, but also promoting healthy living in your community.
A key virtue shared by many malls is large and open atriums, which are great spaces for large events. Turning your mall into a rentable venue for events can help drive revenue. Plus, they’re an ideal revenue stream because events and parties can’t follow shopping into the digital revolution. It also brings a large audience – perhaps an entirely new audience – through your doors.
This is a trend that many shopping malls have already embraced. For example, at Valley View Mall in Dallas, TX, a former Pier One is now a popular Bar Mitzvah venue. Greenwood Park Mall in Indiana has hosted a free concert series in the outdoor section of their complex for the past eight years.
In addition to private parties and large public events, shopping centers can also host a whole range of gatherings. Here are a few more ideas:
- Craft and artisan fairs
How Big Data Can Help
Not sure where to start? Big Data can point you in the right direction – then help you track the results of your initiatives and maximize success. Here are a few ideas:
Finding the Right Experiences and Industries
If you want to turn your mall into an experience or expand into different industries, Big Data can help show you the highest-potential areas for investment. You can use Big Data to scan for hotspots of activity in your community during typical recreation hours, and even zero in on key demographic groups. Identifying your town’s most popular recreational activities can reveal clues about how your community likes to spend time these days. The data can also direct you to certain populations to survey and interview. This way, you can truly understand what your community wants and needs from your shopping center.
Big Data can also tell you about who is coming to your mall and how the level of visitors changes over time. You can see how demographics and even the relative number of visitors vary at different times of day, weekends vs. weekend, winter vs. summer, or last year vs. this year. This can help you think about which of those approaches - from beefing up the dining experience to trying for more weekend concerts – will resonate the most with your current patrons.
Lastly, you can take all of this data about your community’s needs to potential partners. It’s a great way to pitch a new retailer or event production company on why your mall is the best venue for them. When you use empirical, real-world data about the types of visitors your mall brings in (or hopes to bring in), you can make a much more compelling case.
Ensuring Your Mall is Easy to Get To
Big Data can also show you how accessible the mall is to your community. This type of information could reveal an obvious way to bring in visitors, especially if your mall historically focused on attracting drivers. Understanding how your shopping center fits into the transportation system of your community could reveal hidden mobility challenges that are reducing foot traffic. For example, if there aren’t any public transit routes near your mall, could a shuttle service to a transit hub bring in the non-driving community?
Understanding the Market
But Big Data can do more than help you understand your property. You can also use it to analyze the shopping centers that you think are most successful today. Examine the types of visitors that come to their malls and compare them to the types of visitors at your mall. Find out if those demographic groups are in your community – and if they are, you know the types of attractions to invest in.
At the end of the day, results are what matters. Are new industries and experiences bringing more people into your shopping center? Are those new visitors also members of the demographic groups you targeted? Did your efforts pay off?
By measuring the volume and breakdown of your visitors as you try different solutions, you can drill down on what moves the needle in your community. Keep in mind that when you use Big Data Metrics from StreetLight, they’re 100% anonymized and only represent groups of people – never individuals.
Do you have another strategy for malls to succeed in today’s world? Let us know in the comments!