The shopping mall, once an embodiment of the staying power of American retail might, has slowly faded in cachet with the rise of e-commerce. Empty storefronts now litter many malls, some of which are being propped up only by anchor stores with long-term leases. In an attempt to revitalize the concept and restore malls to their former glory, a major pivot is underway that is looking to give the dated mall a much-needed facelift.
According to a report from Green Street Advisors, as reported by Forbes, 70% of the 950 malls studied saw a decrease in tenants across the board, from top-of-the-heap fancy malls to lower-quality malls. A report by AT Kearney, “The Future of Shopping Centers” pointed to one possible future for the shopping behemoths as Consumer Engagement Spaces (or CESs) which recalibrate their focus on the needs of a diverse and changing consumer base. The idea is to move past the old ways malls operate and instead revolve around experiences, brand engagement, entertainment and service providers, Forbes reported.
3 Steps to Create a Premium Retail Execution Strategy
The four models AT Kearney proposes for these CESs are destination centers, values centers, innovation centers and “retaildential” centers, the latter of which will include inhabitable residences.
Destination centers, Forbes writes, will be experience-focused and positioned as a destination suitable for a weekend getaway. Think restaurants, theme parks, event spaces, indoor skiing, etc. Mall of America in Minneapolis is an example of what may serve as the model for the destination center.
Values centers will not be focused on low prices, but on incorporating the surrounding community’s specific interests and culture into the spaces. For example, if the surrounding area is known for their health consciousness, themed stores will likely be the focus. Foodie neighborhoods might see a variety of artisanal food options, and so on.
Innovation centers, as the name suggests, will use cutting-edge technology to harness data gathered from shoppers to constantly fine-tune the shopping experience to the benefit of tenants and customers alike. According to Forbes, existing models for the innovation center include Apple’s flagship retail store, Amazon Go and Nordstrom Local.
“Retaildential” centers might raise the hairs on the back of your neck when you first hear the term, but the idea is to mix residential living with commerce, offering would-be residents access to more affordable housing and convenient access to lifestyle services like retail stores, gyms and restaurants. Because let’s be honest, who wouldn’t want to live at the mall?
Malls are clearly not content going quietly into that good night, and it will be interesting to see if the concepts outlined in AT Kearney’s report come to fruition, and what those malls of the future might look like.