A. Retail Real Estate / Blueprint Future: Like it or not, malls are dying. But not all of them. The survivors and many of their replacements are becoming stronger and more community-serving by growing jobs and providing safe social gathering places. Mall sites are increasingly being strategically adapted to challenges their communities were never designed to address: disrupting automobile dependence, supporting an aging population, leveraging social capital for equity, competing for jobs, adding water and energy resilience in the face of climate change, and, most immediately, improving public health.
2PM Short Analysis (Hilary Milnes): The mall as we know it is dying, despite what retail real estate executives want you to think. But from the husks of the sprawling suburban mega malls that have lost tenants to bankruptcies and foot traffic to the internet, a new opportunity for the original mall format will arise.
Laid out in a comprehensive feature above, which ran in Blueprint, the future of retail centers will be mixed use, featuring open-air stores, apartments, office spaces and centered around community activities and activations like food markets. This is less a future-facing innovation than it is a return to what the original inventor of the modern mall, Victor Gruen, intended. As Web reported in 2019, Gruen’s vision was to recreate urban centers for the suburban class. Eventually, store openings outpaced demand, and we ended with a bloated retail footprint that somehow, someway, was going to falter. The pandemic didn’t kill the mall, it expedited the spread of its pre-existing symptoms.
Retailers are finding new ways to adapt. Nordstrom is toying with the department store model by pulling in more concessions and shop-in-shops; most recently, a partnership with at-home fitness brand Tonal taps into the current workout boom and becomes a win-win for both retailer and brand. Sephora and Kohl’s are growing their relationship, too, with 200 in-store Sephoras to open in Kohl’s. Retail stores have been forced to adjust and increasingly, their strategies are designed to draw in foot traffic that is no longer guaranteed by the mall format. A lot of times, the method relies on tapping into what’s gained popularity online and bringing convenience to the in-person store.
In “The Lying Mall Owner”, Web asserted that malls were not going to return to 2019 levels. That’s true – what we’ll end up with is a different format for the malls entirely. Class A malls – the only ones with a chance of survival – more closely resemble what Victor Gruen set out to create for the suburban class. Let the transformation begin.
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