The future of shopping malls for retailers

To Mall, or Not to Mall. That is the Question.

Insights

Opening up shop in a shopping mall. It sounds like a terrible idea—right? After all, the experts predict that there may be as few as 150 malls a decade from now.

But here’s the thing. Predictions are based on assumptions—and the assumption is that developers are going to take ‘the death of the shopping mall’ lying down. Yes, anchors have left or closed. Traditionally ‘on-mall’ retailers are looking off-mall. But mall owners are developing a new plan—that just so happens to look like the original creator’s vision for what a mall could be.

But how did we get here? What’s next? And could your brand be a fit for the next iteration of the shopping mall? A few questions we hope to answer below.

A Brief History (and Future) of the Shopping Mall

For many, the mall is a relic of the past. A symbol of American culture at a certain point in time. But for developers, it’s a space filled with untapped potential. How? By returning to the original vision of what the mall would be.

The Vision of Victor Gruen

The original vision of the mall shares few similarities with the mall of today. Victor Gruen, architect and “father of the mall,” planned for malls to be social, cultural, and communal spaces for people of all ages.

Malls, according to Gruen, were supposed to be the answer to suburban expansion and car culture. He expected vibrant communities to pop up around malls. Parking lots were supposed to be placed far away to encourage walking. Everything would be available locally.

And he designed the Southdale Center in Edina, MN to test the concept. An 800,000 square foot property, Southdale was an enormous, unprecedented undertaking at the time. This early development had fountains, an aviary, and art installations. And Gruen expected big things. Instead of a handful of stores, Gruen wanted malls to incorporate all things necessary for local living, such as medical centers, schools, and residences.

The Rise and Fall

It was a bold plan. And the avid car-hating socialist Gruen believed he was helping facilitate his beliefs. It didn’t. While Austrian economists are renowned for their understanding of human behavior, the Austrian architect Gruen wasn’t.

Instead of the walkable space, the mall became a driving destination. Instead of doctors offices and schools, consumers embraced the new choices available to them. The rise of malls fueled cultural shifts and evolution. Gruen envisioned the mall as the third place, a place between work and home. He turned out to be right—just not in the way he expected.

From the 70s to the 2010s, malls continued to do what they did best: provide consumers with endless options. But the rise of outdoor spaces, outlets, and ecommerce kicked off a decline. Suburban real estate prices drove people back into cities. No longer was a massive, enclosed space an ideal place.

You know the story. You don’t need to hear it again. Malls spent the last decade on the decline. By the mid-2010s, at least 300 malls in the U.S. were dead or dying. Some closed, some continue to exist. But few maintain the same sheen as they once did.

A Vision Realized

This brings us back to Victor Gruen’s vision of malls serving as community hubs filled with necessities, surrounded by residential spaces, and providing enhanced walkability. It’s happening—even if it’s less reliant on an enclosure.

Take, for instance, the suburban Chicago Fox Valley Mall. Though by no means a “dead” mall, the four-anchor, 1.4 million square foot mall in Aurora, Illinois served and continues to serve residents and visitors. The problem? Half of the anchors went out of business.

Rather than wait for a potential retailer to set up shop in a space formerly occupied by Sears or Carson’s, new owners at Centennial laid plans to transform the mall into something bigger. Among those plans? Adding green space both indoors and outdoors. Creating opportunities for immersive experiences. And turning the former Sears into residences.

They’re not alone. Malls across the United States are making strides to change who they are. Mixed-use developments are in. And a surprising number of people want to “live at the mall.”

New Brands for a “New” Mall

Following the pandemic, many analysts and tenants had some doubts about the future of malls. But malls have shown resilience. Occupancy remains high, but the tenant base is changing.

Mall Mainstays Moving Out

Excluding anchor units, what are some brands you think of when you think of a mall? Bath & Body Works? Gap? Victoria Secret? Claire’s?

Just some of the retailers planning their spaces somewhere else.

For example, the rebound at Claire’s has been due in large part to their embrace of shop-in-shops and other partnerships. Gap has set a goal of having 80 percent of its namesake Gap locations outside of malls by early 2024. And according to RetailWire, they’re not alone.

Apparel and beauty, once considered the lifeblood of the mall, are moving out. Services and amenities are moving in. Placer.ai’s Ethan Chernofsky highlighted this in a recent article on Bisnow,

“Over the past five to 10 years, operators have reduced their focus on apparel and beauty. […] Whereas malls used to be 70% to 80% beauty and apparel stores, now it is more like 50%.”

This is creating change. Not only is it driving retailer focus from top tier malls to smaller regional spaces, it’s creating an opportunity for different brands to establish a foothold.

Creating a New Experience

With apparel and beauty on the way out, what’s moving in? Necessities for gracious living. Smaller stores. Pop-up experiences. Fitness centers, health clinics, and even college satellite campuses. Chernofsky adds,

“[a diversified mall] gives more reasons to visit, so it’s not just, ‘I want to go buy clothes,’ […] It’s ‘I need to go visit the dentist. I want to go to the spa. I have a health treatment. I want to go look at a car.’”

This diversity in service will create diverse audiences. And an opportunity to deliver a new experience.

Whatever You Choose, Create Something Unforgettable

Across the United States, developers are re-envisioning underperforming malls—and building something new. These spaces will focus on community, house diverse brands, and offer a new way to live, work and play.

This raises our original question—is this new breed of mall right for your brand? That’s up to you.

After all, we’re not in the business of real estate, site selection, or marketing. We can’t tell you about demographics or land value. We’re not retail experts, we’re retail fabrication experts. On-mall or off, we know what it takes to make the space unforgettable.

Trusted for eight decades by brands big and small, Morgan Li is your partner for fixtures, furniture, and graphics. Designers and architects love us for our attention to detail. Planners and programmers are stoked on our scale.

From DTC and specialty players opening their first store to the biggest of big box stores, Morgan Li has been there and done that. So if you’re looking for someone to transform your space on time and on budget, look no further. Get to know us, and drop us a line to learn more.

STAY CONNECTED

Sign up for our newsletter to receive updates.

PREVIOUS POST
Official Statement from Morgan Li on Fire at 1001 Washington
Official Statement Regarding Fire at 1001 Washington Facility
News & Awards

A fire broke out on Monday morning, February 6, 2023 at...

Read more
NEXT POST
Morgan Li Student Housing Webinar with Roomy & Core Spaces
The Secrets to Creating Unforgettable Student Living Experiences
Insights

In today’s student housing environment, experience is everything—and every detail matters....

Read more

Get Started

Whether you have a completed design or an inkling of an idea, we’re here to help you bring your vision to life.

Work With Us
Cash wrap and perimeter displays at Brooklinen flagship in New York City. Custom retail fixtures by Morgan Li