(Photo: Chris W. Pestel)
Source: USA Today, December 2018
If you guessed that shopping malls were on their last legs in the age of Amazon, you bet wrong.
Despite the struggles of mall mainstays such as J.C. Penney and Sears, mall traffic has been up this holiday season, as those centers offer shoppers more entertainment, tastier food and the chance to experience brands they could previously check out only online.
“What’s really interesting in the data we’re seeing this holiday season is that malls are actually performing quite well in terms of traffic,” says Bridget Johns, head of customer experience for store analytics firm RetailNext. “There have been a lot of anchors that have closed, and a lot of those anchors have been replaced by more experiential-type environments like bowling alleys and high-end restaurants … that appear to be doing a really good job of driving traffic to those properties.”
Mall traffic was up 2 percent during the 48-hour period that began on Black Friday morning, according to data analytics firm Thasos.
And from Thanksgiving Day through the weekend, roughly 151 million people went to a mall or shopping center, according to the International Council of Shopping Centers, up from more than 145 million during that period in 2017. The organization says 84 percent of holiday shoppers planned to visit shopping centers this holiday season.
Though this was a year in which Toys R Us went out of business and ubiquitous mall anchor Sears filed for bankruptcy protection after closing hundreds of stores, industry observers say that rather than being debilitating, these sudden vacancies have presented an opportunity.
“There’s this thinking that if the Sears anchor goes away, it’s going to have this detrimental impact on the mall,” Johns says. “But when it’s replaced with something that’s a little more relevant, a little bit newer, it has a really good impact in those locations.”
Still a hangout of choice
Malls are doing well in part because the teens and younger adults who make up Generations Y and Z enjoy visiting them.
USA TODAY’s Jeffereson Graham takes a look at a new high-tech parking reservation system at the Westfield Century City Mall.
Ava Pacino still loves the mall.
“I like that scene, having a lot of shops I like in a convenient place,” says Pacino, 37, a cosmetologist who stopped by The Shops at Columbus Circle mall in Manhattan on a recent afternoon. “It’s something different to do in your day.’’
While it’s “kind of counter-intuitive,” Johns says, “these generations that have grown up with digital connectivity really love to be in physical spaces. So I think changing those environments to respond to what the younger generations, the millennials, and Generation Z, are looking for is part of the better mall developers’ strategy.’’
Still, there are more malls than there are shoppers interested in visiting them.
“In a nutshell, the stronger (malls) are getting stronger and the weaker are getting weaker, and there’s a broad middle where the most questions and concern” are, says Rick Latella, executive managing director at Cushman & Wakefield and America’s practice leader for retail. He estimates that of the roughly 1,100 malls in the U.S., about 20 percent could be deemed the most successful “A” malls, while a couple hundred are in serious danger of not surviving.
Malls mixing it up
While struggling midlevel malls may need to look to different types of tenants, such as post offices or motor vehicle departments, to usher in traffic, the top performing centers are appealing to shoppers with an updated remix of retailers and experiences.
At its Tysons Corner Center in Virginia, mall owner and operator Macerich is helping digital brands create a physical presence with a concept dubbed BrandBox.
With BrandBox, online makeup retailer Winky Lux and luxury knitwear seller Naadam are among the companies that can configure their own storefronts while getting help from Macerich with tasks ranging from securing staffing to designing their spaces
“It … gives these brands a chance to test our markets before they commit,” says Kevin McKenzie, executive vice president and chief digital officer for Macerich and BrandBox. While one hope is that some of the featured brands will become longer-term tenants, another “byproduct … is giving the consumer a taste of some new and exciting things.”
In addition to giving online retailers a physical perch inside a mall with an almost 99 percent occupancy rate, Macerich also provides them with “a lot of data analytics so they can effectively measure physical retail just like they could with a digital channel like Instagram.”
There are plans for BrandBox to be featured at other Macerich centers and malls starting next year, including The Shops at North Bridge in Chicago and Fashion District Philadelphia.
Elsewhere, Macerich is partnering with co-working space provider Industrious at its Scottsdale Fashion Square mall in Arizona. And from March through July, its Santa Monica Place shopping center in California featured Candytopia, an experience in which famous sculptures are recreated with candy.
“The crowds were massive,” McKenzie said. “It’s taught us we need to have space that we can quickly move new entertainment concepts in and out of … and (that) support large crowds and ticketing. These are all things shopping malls weren’t traditionally taught to do. We’re looking to be less of a traditional landlord and more of a service provider.”
In Voorhees, New Jersey, the one-time Echelon Mall has become the Voorhees Town Center that is as much a community hub as it is a cluster of shops.
“I think they were just trying to keep the occupancy rate up because it’s such a big part of the town,’’ David Witham, the mall’s manager, said about the shift that resulted in nonretail businesses moving into vacant spaces on the mall’s upper floor while traditional stores moved downstairs.
The Voorhees Town Hall is now located where a Victoria’s Secret used to be. There’s also a doctor’s office upstairs.
“The best part about the nonretail is that they bring in and attract a lot more customers that retail wouldn’t have reached,” Witham says.
But while some malls are thriving, reinventing themselves and bringing in new experiences, it is almost certain that some malls operating today will be unable to survive.
“Clearly, there will be some malls that will not make it,” Latella says. “Where there is such limited demand for retail, it will transform into something else.”
