In the latest episode of America’s Commercial Real Estate Show, the show host explored the evolving landscape of malls and retail, addressing common misconceptions about the state of these commercial spaces. Featuring Caroline Wu, Director of Research at Placer.ai, the discussion illuminated trends, innovations, and opportunities driving a resurgence in mall traffic.
The Resurgence of Malls: A Closer Look
Contrary to the belief that malls are becoming relics of the past, data from Placer.ai shows an upward trend in foot traffic across indoor malls, open-air shopping centers, and outlet malls. According to Wu, the summer of 2024 saw a remarkable year-over-year increase in visits, with indoor mall traffic up 25% and open-air centers up 20%. This resurgence underscores the sector’s adaptability and the enduring appeal of physical retail spaces.
Wu emphasized that successful malls, particularly Class A or trophy properties, are thriving by offering differentiated experiences that cater to modern consumer preferences. These include enhanced amenities, entertainment options, and partnerships with influencers and brands to create unique in-mall events.
Experiential Retail: The Secret Ingredient
The post-pandemic shift towards experiential retail is a key factor driving traffic. Malls are reimagining themselves as vibrant community hubs where visitors can engage in more than just shopping. Examples include:
- Event Partnerships: The American Dream Mall in New Jersey hosted an arena football event, showcasing how malls are expanding beyond traditional retail activities.
- Unique Attractions: From paddle boating on a lake at Maryland’s Rio mall to interactive arcade-style experiences for kids, these attractions enhance the mall experience for families.
- Pop-Ups and Celebrity Engagements: Regular events like product launches, pop-ups, and celebrity appearances draw crowds, especially on weekends.
The Role of Movie Theaters and Seasonal Drivers
Movie theaters have contributed significantly to the summer mall surge. Blockbusters like *Deadpool vs. Wolverine* and *Inside Out 2* attracted families and older moviegoers alike. Seasonal factors, such as back-to-school shopping and the summer heat, also played a role in bringing people to malls, particularly those seeking climate-controlled environments.
Evolving Tenant Mix
To stay competitive, malls are diversifying their tenant mix. Wu highlighted several emerging trends:
- Supermarkets: Ethnic markets like H-Mart and Filipino grocers are becoming key anchors in malls.
- Entertainment Hubs: Destinations like Dave & Buster’s and bowling alleys offer complementary activities that increase dwell time.
- Health and Wellness Services: Urgent care centers, IV infusion clinics, and other health-focused tenants are finding a place in malls.
- Online-to-Offline Retailers: Direct-to-consumer brands are opening brick-and-mortar locations to enhance customer engagement and gather valuable insights.
Demographics and Travel Trends
Families are leading the charge in mall visits, drawn by family-friendly attractions and diverse dining options. Additionally, people are traveling further to visit malls, especially outlet centers known for their deals. This trend highlights the importance of destination-worthy experiences in attracting regional visitors.
Key Takeaways for Retail Property Owners
Wu advised retail property owners and managers to embrace creativity and adaptability:
- Experiment with New Tenants: From grocery stores to pop-up shops, being open to unconventional tenants can attract diverse demographics.
- Focus on Community: Malls can serve as gathering spaces, fostering a sense of connection and offering memorable experiences.
- Leverage Data: Tools like Placer.ai provide valuable insights into consumer behavior, helping landlords and managers make informed decisions.
The Future of Malls
Despite challenges, malls remain vital marketplaces, resonating with humanity’s innate desire to gather, explore, and interact. By embracing innovation and adapting to consumer demands, malls can continue to thrive as vibrant centers of community life and commerce.