The New Life of Retail Malls

The New Life of Retail Malls

The term “retail apocalypse” was coined around the 2008 recession, where malls in America were hit hard and thousands of complexes closed. Now, according to a Business Insider article, UBS analyst Michael Lasser predicts that about 80,000 stores will close in the next five years. UBS has not always hit the mark with their predictions, however; as the pandemic began in America and retail shopping startet to plummet, analysts boldly predicted that 10,000 stores in the US would shut down as e-commerce became the prototype for modern retail. Luckily for retailers, 2020 saw a lessened rate of store closure compared to 2019, due to “government stimulus and an overall shift in how people spent their money last year — toward goods and away from services.”

Image courtesy of Sung Jin Cho

While this may indicate a positive trend for retail companies, Coresight Research states that around one-fourth of malls in the US will close within the next three to five years, with over 12,000 stores shutting down in 2020 thus far. The major issue with malls in America is that the demand that once launched their popularity has since been replaced by a more convenient, accessible force: the internet. As World War II ended and people flocked to the suburbs of America, the workforce to build malls and the middle class demographic that enjoyed the malls was prevalent. Where malls were once a hub of not only clothing brands, but also fulfilled the needs of the middle class family where you could purchase appliances, electronics, clothing, and household items all in one trip. Now, e-commerce companies like Amazon put malls to shame, giving consumers access to every type of retail product imaginable within seconds.

How to Design the New Malls

Now, the onus falls on malls who are on the brink of collapse to find a new way to create demand. Perhaps a new way to conform to the changing retail landscape is for malls to insert themselves into e-commerce rather than fight it, becoming a middle-man between companies like Amazon and consumers. The difference between malls and e-commerce is that, unlike with online shopping, malls allow the buyer to try on or experience the product in person before deciding to purchase it, which poses an issue malls could attempt to solve in the future.

Another key difference between consumer culture today versus the culture that saw the peak of malls in America is the way we engage with media. Now, with the presence of social media that provides new content within seconds and floods us with a never-ending stream of newness, our attention spans are shorter and we crave uniqueness more frequently. As a result, malls could take advantage of retailers’ love of the new and create a more fluid model of the modern mall; rather than the same couple dozen of stores, they could implement forms of entertainment that move in and out as a Broadway show would. Instead of longstanding department stores, there could be smaller pop-ups that cater to food, clothing, entertainment, and any other type of retail imaginable. By switching up the mall’s content, this will stimulate the modern consumer more than a typical mall offering the expected shopping experience would. Long story short, while there may not be a clearcut solution yet, creative solutions could take advantage of the knowledge we now have of consumers today compared to those of the American mall’s apex.