THE FUTURE OF MALLS IN AMERICA
August 6, 2022 | John J. Pasquini
Malls in the United States are dying.
Credit Suisse, a wealth management company, predicts that 25 percent of the approximately 1,000 remaining U.S. malls will close by the end of 2022.
Covid and the Malls
Even before the Covid-19 pandemic, retail brick-and-mortar stores were struggling: E-commerce was already whittling away their profits.
The pandemic simply made things worse. Shutdowns forced consumers to rely on online shopping, but more importantly, Covid shutdowns converted and shifted the attitudes of many toward the benefits of e-commerce shopping—more options, quick service, and stay-at-home convenience.
This shift in consumer behavior was not inconsequential for retailers. Anchor tenants failed and fled, and some became insolvent. Ascena Retail Group (i.e., Lane Bryant, Ann Taylor), Brooks Brothers, GNC, JCPenney, Lord and Taylor, and Neiman Marcus were among the iconic brands that became victims of this shift in consumer behavior by declaring bankruptcy. Other iconic brands, such as Sears and Kmart, were forced to consolidate their assets to survive.
Hope for the Future
The mall seems to be a thing of the past, but is this really the case? Is there still a future for the local neighborhood mall, particularly in an ever-increasing e-commerce market? And if there is, what does the future look like?
According to Moody’s Analytics, a financial services company, by renovating and repurposing themselves, malls can survive, at least for the near future.
Many malls have taken this approach. Numerous malls have been renovated and repurposed as office spaces, university satellites, fulfillment centers (for Amazon, FedEx, DHL), and even homeless shelters and megachurches. Some have become mixed-use facilities, part office space, part recreational facility, part traditional mall.
Reimagined Malls
Renovating and repurposing a mall may be a way of saving a mall, but they are in no way a means of making them thrive.
Mall survivability, brick-and-mortar-store survivability, must be found in what e-commerce cannot accomplish efficiently and conveniently.
Hospitality
Restaurants, food courts, and the food and beverage industry cannot be effectively and cost-efficiently met through e-commerce. These services are by nature in-person experiences.
Fitness
A workout gym, yoga studio, or martial arts dojo with coaches, instructors, and personal trainers is more effective and personal in person than online.
Beauty and Wellness
The personal touch of a makeup artist, hairstylist, dermatologist, esthetician, nail artist, and massage therapist is not e-commerce conducive.
Healthcare
While telehealth is the fad of the moment, there is only so much that can be done via the internet. Dentistry, physical therapy, and medical procedures in general can only be done in-house. Serving patients in full-service healthcare centers (with many specialty services, physicians, and in-office labs) is a benefit that cannot be equaled via the internet.
Adjuncts
Malls can survive and thrive if they become “service-industry-adjuncts”: The Orlando International Airport’s terminal (like many of the best airports) offers its travelers an in-built hotel and mall with retail stores, salons, food courts, bars, and large sit-down restaurants. The airport’s mall fulfills needs that cannot be met in any other manner without inconveniencing the traveler awaiting a flight departure.
Malls attached to hotels also thrive. Several Las Vegas hotels and casinos (such as Caesars Palace, the Venetian, and the Paris hotel) have magnificently decorated shops within their hotels and thus within immediate reach of tourists.
In Conclusion
The future of malls is dubious. If the future of malls lies simply in repurposing existing facilities, then the future is not promising. If the future consists of repurposing malls in imaginative and innovative ways, what lies ahead may be more optimistic.
Sources: Calfas, Jennifer. https://money.com/malls-closing-2022-credit-suisse/. “1 in 4 Malls Will Be Closed by 2022, Firm Says.” Money. June 1, 2017; Lange, Alexandra. “Meet Me by the Fountain: An Inside History of the Mall.” Bloomsbury. 2022; Guenthner, Greg. “Amazon is crushing the shopping malls.” Business Insider. December 12. 2016; Fung, Esther. “Amazon and mall operator look at turning Sears, JCPenney stores into fulfillment Centers.” Wall Street Journal. August 8, 2020; Wahba, Phil. https://fortune.com/2017/05/31/malls-retail-stores-closing/ “Major Wall Street Firm Expects 25% of U.S. Malls to Close by 2022.” Fortune. May 31, 2017.