Are American malls back from the brink?
“Shopping malls are dying.” While that’s a statement you’ve probably heard before, it turns out we may have pronounced them dead too quickly.
According to a recent analysis from Coresight Research, a retail research firm, foot traffic at what it calls top-tier malls is above pre-pandemic levels and store occupancy rates are 95% or more.
So what’s giving malls a second life?
Joe Bell has been in the mall business for 15 years. In that time, he’s heard the same question over and over. “I’ve had people who were asking me what I was going to do when all the malls closed in five years.”
Rude! But also maybe fair. The narrative about dying malls has been going strong for more than a decade. But Bell, a spokesperson for Cafaro Co., which operates 50 shopping centers, said foot traffic is back to pre-COVID levels.
A successful mall, per Bell, is one that’s been reimagined. “It would feel a lot more like a typical downtown, where you have a greater variety of types of businesses,” he said. “Where you might find a bar and restaurant right next to a jewelry store and next to that a dentist’s office.”
One of their malls even has a minor league ballpark.
Plus, for the first time since 2016, more stores are opening than closing, according to Sonia Lapinsky at AlixPartners.
Is it then possible that malls may have escaped death? “It’s not a one-size-fits-all answer, so it’s very nuanced,” Lapinsky said.
Malls in urban areas where people value delivery and have less money aren’t doing as well. Meanwhile, malls in more affluent, suburban areas are thriving. They’re seeing an influx of luxury and direct-to-consumer brands, like Away luggage.
Online brands are also boosting malls’ occupancy rates, Lapinsky noted. “They’ve realized that it’s too expensive to acquire the consumer only exclusively from a digital channel.”
These brands are especially successful at combining the features of online and in-person shopping, like incentivizing online pickup orders and returns and showing what’s available in store.
“So if I am browsing online and I see, you know, a pair of jeans that I want to try on, hopefully that site is showing me that my local mall has those in stock and gives me a reason to go in,” said Claire Tassin of Morning Consult.
I mean, if someone figures out a way to avoid having to try on jeans at all, I’m here for it. Until then, to the mall I go.
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