A Sustainable Mall Built for the Future

Are malls truly dying, or just dying to reinvent?

Malls are different places now than they were in the glory of the 70s, 80s, and even the 90s. And yet, they are still sources of nostalgia where many a kid went to bother actual patrons.

Ask any adult who lived within a reasonable range of a mall and they’ll probably answer the same: it was a place to loiter with friends, eat fast-food, try on the weird clothes, and douse yourself in every perfume sample.

Now, malls are dying, or at least in serious trouble.

A new report from S&P Global Market Intelligence found 7 publicly traded mall owners that are facing serious risks. Some of the risks include:

· Higher percentage of department stores and tenants declaring bankruptcy

· Falling foot traffic

· Cash flow issues

The COVID-19 pandemic has exacerbated an already precarious situation malls face in the U.S. In particular, CoStar Group announced the closure of over 11,000 retail locations this year alone.

However, even before the pandemic, detractors said malls were dying and becoming desperate to reinvent. It appears that malls must now begin to bring entertainment values to consumers in order to keep them coming back.

The American Dream in East Rutherford, NJ has attempted to do so by featuring indoor ski slopes, a water park, and aquarium along with 350 stores ranging in offerings.

The original allure of malls highlighted the communal nature of shopping as brands became more competitive and as commercialization and consumerism rose in the 80s and 90s.

Now, we are in a new era of consumerism, which is dominated by the experience of online shopping.

With Amazon spearheading the ease of online shopping, there are still some aspects of in-person shopping that are hard to imitate, which includes the often-necessary process of trying on clothes. It’s bothersome in many respects, but something that online shopping cannot truly appeal to on a wide scale.

A true mark of a successful mall of the future must create new tenets of success. The past offerings for movie theaters, food courts, and traditional box name, or anchor stores, must be revitalized to get people through the door.

In order to reinvent the mall concept, executives must consider:

1. Pairing with E-Marketplaces and Co-Ops

Amazon is king right now and it will probably remain that way until another company comes along offering more. But this is less of an us vs. them mentality for the malls that still stand. Pairing with Amazon and even smaller online-based stores can offer some mutually beneficial buying power. Kohl's has already capitalized on this by working with Amazon to allow returns through their stores.

2. Experiential Products and Services

Interactive experiences with products and services has always enticed people from the earliest forms of entertainment to now. A circus pulled you in because you felt part of the process, so why shouldn’t your shopping experience be the same? High-tech offerings allow for an immersive experience whether it be trying on makeup virtually before buying or simply playing a game while waiting to be helped by an employee. Nordstrom has already gotten the hint and opened up restaurants, spas, and even more local stores to better tailor experiences to individual shoppers.

3. Incentivizing Sales for Employees

Sales jobs are incredibly taxing, especially for younger, less experienced employees. They clock in and clock out but are expected to meet high standards for little self-reward. To further incentivize employees (other than solely wage based compensation), companies must utilize the successful techniques used in higher-end stores that base a large portion of income on sales and performance. Companies need to create more interactive experiences as mentioned above, but then train employees to utilize those channels. Just look at Chick-fil-A, they have some of the most innovative solutions and customer-first based employee practices. In turn, employees are better served to propel their careers and education goals forward, which could lead to staying for a longer period of time. This is especially important in an age where it is becoming more popular to jump every few years than stay at one place for a decade.

4. Shopping in a COVID World

Shoppers have now become accustomed to staying far apart and wearing masks. Hand sanitization stands are everywhere, and people can’t seem to touch as many things as before. This hands-off type shopping will probably not change for some time, and it will most likely impact shopping for the future. Long gone are the days of tight aisles and communal-based shopping. Things are now personalized, separate, and more conscious of the ways in which people see the shopping experience. This brings us to focus more on user experience and the psychology of modern shopping trends.

5. Pop-Ups

Again, there is such untapped potential that lies in the merging of online and in-person stores. Let’s say an online jeweler has enough product and sales to sustain their platform, but they are losing margins due to shipping costs and issues. If they were to partner with malls across America to sell certain products in small kiosks, that would benefit both parties. It also highlights the power of small craftsmanship that reigns supreme on Etsy. If Etsy were to further support high sellers in pop-up shops throughout malls, then more people could be inclined to support the little man even if it means going to the place that once housed the big box stores.

What's Next?

One method won't suffice in order to change how people shop or how malls do business. It is daunting to attempt to change any long-standing institution, but the onus is on developers and executives to better implement practicality, intuitive practices, and even creative solutions into the mall structure.

With time we may just see an emergence of all new experiences that lead shoppers to buy with more thought while having just a little bit of newfound fun.