If you grew up in the suburbs, chances are you know the local shopping mall like the back of your hand; you spent weekends wandering the bright, maze-like corridors with friends, working your first weekend job in the food, court and getting everything from a haircut to a handbag under the one cavernous roof. Malls have long played an important role at the intersection of community and commerce.
In the U.S alone, were an estimated 117,200 shopping malls in 2017, according to research by The Trust, formerly WSJ. Custom Studios, and ISCS. For years, malls have been fundamental in shaping our fixation with shopping — a national pastime which, over the last 20 years, has been in hyperdrive. The increased accessibility, rapid trend cycle, and ultra-cheap prices of fashion, footwear and accessories have resulted in rampant overproduction and overconsumption that is tipping the climate into crisis mode.
The global fashion industry alone produces somewhere between 80 billion and 150 billion new garments yearly, and McKinsey estimated that the number of garments made yearly has doubled since 2000. For their part, shopping malls have been carefully engineered to maximize spending, with wall-to-wall Gaps, Zaras, Hollisters, Abercrombies and H&Ms enabling the fast fashion-saturated culture of today. But as the world emerges from the pandemic more environmentally conscious and spending more time and money online, what exactly is the shopping mall’s purpose? And can malls adapt to this value shift fast enough to survive?
“The U.S is over-retailed, and most of that retail was built by the baby boomers for the baby boomers,” said Chad Cress, chief creative officer at DJM, a retail developer behind malls across California, including Ovation Hollywood, Bella Terra in Huntington Beach and Long Beach Exchange. Each has an occupancy of 95%, other than Ovation Hollywood which is amid a renovation following DJM and Gaw Capital’s 2019 acquisition. “A lot of the conversations we have at DJM are about how we reimagine what retail is like for the current consumer and future generations.”
DJM’s approach is to build new and covert old malls by blending experiences with retail, tailoring each location with local restaurants and businesses, and designing hybrid indoor-meets-outdoor spaces that organically connect to the outside world. “Malls have the potential to still keep a special place in people’s lives, but it has to look a lot different than it has,” said Cress. “The format of the indoor shopping mall is outdated and it doesn’t work in most places. Developers and mall owners have to be honest with where the world is today and figure out how to adapt.”
Pos-pandemic, malls are betting on e-commerce fatigue and a renewed appetite for tangible experiences to drive traffic, but the retail offerings of yesteryear won’t cut it anymore. “So much of our lives is online, so any time we spend in the physical world together, we want it to be moments that enhance our lives and go beyond shopping,” said Cress. “It’s about creating a place where people want to come and spend time. Coming out of Covid, we’re pickier on where we spend our time and where we go shopping or dining.”
DJM is putting “more emphasis on experiences, whether that’s [facilitating] dining, concerts, night markets or movie nights on the lawn,” said Cress. He said that food and beverage used to make up around 20% of a DJM mall’s merchandising mix, but that has increased to more than 40%. “We look at restaurants as our new anchors, because they reflect the DNA of the center and how our guests spend their time. We want to create places that create true community,” he said. Activations vary from property to property but include farmers’ markets, Instagramable installations, kids clubs, beer and wine festivals, pride events, and vintage markets. Bowling, wine and painting studios, gyms, spas, cinemas, and VR amusement parks can also be found across DJM retail locations.
In the U.K., Unibail-Rodamco-Westfield, which owns and operates 82 Westfield shopping malls across 12 countries, has been introducing more values-led brands and circular economy initiatives, appealing to an increasingly conscious consumer base looking for more responsible ways to shop. “It’s so important to support brands that offer something different and have a positive impact linked to worthy causes,” said Kate Orwin, U.K. leasing director at URW.
Westfield’s recently linked retail partnerships include London brand Inside Out, which sells clothing designed and handmade by young ex-offenders; By Rotation, a fashion rental platform; and the U.K.’s first permanent Black Pound Day store, which stocks a range of Black-owned businesses in Westfield London. “Community is at the heart of many of our key partnerships,” said Orwin. “We’re seeing more diverse concepts doing particularly well, as consumers look for more variation in the types of stores on offer.” Westfield wouldn’t say whether values-driven brands paid discounted rents, but explained that the company offers trial pop-up stores and flexible tenancy agreements.
Creating inclusive retail opportunities for independent businesses also requires reimagining the retail rulebook. “[Malls] have to change a lot of things, like how they measure success, in terms of profitability and what it means for businesses to be successful,” said Ann Cantrell, professor in fashion business management at the Fashion Institute of Technology and the owner of a Brooklyn-based general store Annie’s Blue Ribbon. “How successful we are is too tied to how much money we’re making. Not only [are malls] cost-prohibitive, but there are also so many other factors and rules, like the hours you have to abide by, that are harder for small businesses. Most malls & shopping centers have common hours (ie. you must be open 10 am – 8 pm) and marketing budgets — perhaps built into businesses’ rents making them higher than stand-alone shops — that is more than small businesses can afford or maintain.”
The low barrier for entry to launch an e-commerce platform means most new brands get their start online. To entice them into physical retail locations, developers have to see digital as an extension of physical retail, not a threat to it. Helping brands create a seamless omnichannel experience, where their physical store and online presence can cohesively coexist, is central to both Westfield’s and DJM’s strategies for securing buzzy direct-to-consumer brands.
Whether it’s hosting social media marketing workshops, livestream shopping services, product demonstrations or digital workshops like makeup tutorials, or offering curbside pickup for online orders, forward-thinking malls are investing heavily in blurring the lines between in-store and e-commerce. “Brands that started online are now realizing that brick-and-mortar is just as important to telling their story,” said Cress. “And we know that the better their sales do across their every channel, the more successful they’ll be at our property.”
So what about all those global brands that have monopolized the retail landscape and created carbon-copy malls for the last 20 years? “There’s a new generation of brands that are coming up to take their place,” said Cress. “We’re trying to create unique retail properties that are specific to the community they’re in; they’re not just one-size-fits-all. A lot of these legacy brands have long-term leases, so it takes a little bit of time for things to turn over. But we’re definitely seeing the growth out of the [new] brands.”
Malls still hold value for consumers as a destination to not only shop but also support values-aligned businesses and reconnect in a time when human connection is in high demand. How quickly and creatively malls evolve to offer innovative, new ways to engage, invest in and grow their communities will determine their survival in the years to come.
