Directory of Major Malls
Directory of Major Malls

What’s Making Malls Hot Again

In an April 24th, 2019 report by CNBC’s Courtney Regan ”Experience Over Shopping: Making Malls Hot Again,” Regan discusses how malls are getting creative with their tenant mix to deliver a wide range of experiences to get consumers coming back for more. And so far it’s paying off.

Regan points out that malls aren’t dying; they’re just changing. They have to. According to ICSC’s Envision 2020 report “The Future of the Shopping Center Industry,” the “rapid advance of technology and the growing influence of the millennial generation,” (p.4) which seems to live and breathe by its mobile communication devices, is driving the challenges and opportunities of this change.

“We’re a consuming public,” says Byron Carlock Jr, PWC US Real Estate Leader in Regan’s report. “We like to shop. We like to have experiences. Retail isn’t headed toward Armageddon. It’s headed toward repositioning.” Sandeep Mathrani, Retail CEO of Brookfield Properties, the US’s biggest mall owner, provides a breakdown of the tenant mix among the best shopping centers. He says: “Today the best shopping centers are curated 30-35% apparel; 20% home furnishings; 20% entertainment; 15-18% Food; 10% Electronic & Digitally Native Companies (like Amazon Books), which is the biggest flow of tenants into our shopping centers.”

“embracing the consumer’s desire for experience”

Although apparel still occupies the biggest percentage (30-35%), the 20% entertainment and 10% electronic and digitally native companies indicates a significant shift toward embracing the consumer’s desire for experiences as well as their proven “webrooming” behaviors. ICSC’s Envision 2020 report talks about “webrooming” – the practice of researching a product online and then purchasing it in a store. (p.5) We’ve all seen the emails in our inboxes and push messages on our phones from retailers offering in-store discounts but pointing us to explore the product on their websites.

Breakdown of Tenant Mix in Best Shopping CentersBreakdown of Tenant Mix in Best Shopping Centers

Walking into a modern mall today you may see a Pelaton, Tesla showroom, supermarkets, or some sort of physical challenge experience. It’s not that malls didn’t offer experiences in the past. For those of you old enough to recall, malls held concerts, battle-of-the-band competitions, fashion shows and the arcade was always a popular hangout for teens. The experiences have just changed. Now there may be rock climbing or axe throwing, or an extravagant performance by Cirque du Soleil – like at The American Dream Mall in NJ, which is under development by the owners of Minneapolis’s Mall of America, and will feature a Snow Park, Dreamworks-branded water park, Aquarium, and a Cirque du Soleil venue.  The NJ Woodbridge Mall has an Escape Room where a retailer once was. Even bigger projects are underway.

Consider the Westfield Destination 2028 vision for a “‘hyper-connected micro-city fueled by social interaction and community.” Myf Ryan, Chief Marketing Officer at Westfield UK and Europe, stated that their mission is “to work closely with brands to deliver innovative retail spaces that create the ideal environment for them and their visitors.” The company “recognizes that consumers are going to place a growing desire for a more rounded retail experience, that brings in leisure, wellness, community and experience, alongside shopping.”

Regan’s report mentions Greenstreet Advisor’s prediction that malls will be more than 93% occupied by this year, which is above the historical average. Last year tenant sales were the best in six years. But investors remain cautious:

Mall REITS 1 Year Performance
Macerich – down 26%
Washington Prime Group – down 21%
CBL & Associates – down 71%

Mall owners and retailers are leveraging mobile apps and the tracking capabilities of mobile phones to gather business intelligence on consumer destination, engagement and buying behaviors to inform their location and planning decisions. Directory of Major Malls |, the leading online database of major mall and shopping center data in the US and Canada, has partnered with B.I. Spatial, a business intelligence provider, to offer retailers, investors and retail business intelligence companies, a new product to help them define accurate retail boundaries. The new product, DMM Retail Boundaries, is a proprietary geofencing product that is meant to be the best representation of the larger retail environment surrounding and including a corresponding shopping center or mall which is the anchor point. A traditional geofence can drastically affect the veracity of any third-party data captured because of its breadth and depth. DMM Retail Boundaries, unlike a traditional geofence, are refined in such a way to eliminate known anomalies such as ring roads, bridges, residential high-rises, intersecting streets running through a shopping center and nearby highways, strengthening the veracity of the data collected. DMM Retail Boundaries can be leveraged in multiple GIS platforms as a visual reference, or as a means of collecting additional third-party data specific to the Retail Boundary.

Leveraging the capabilities of mobile phone technology to collect real-time consumer data, combined with other data, retail property developers are making changes that more closely align with the interests of shoppers today. With roughly 40% entertainment and food tenant occupancy, representing more diverse mixed-use, malls are hot again.

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