With the rise of internet shopping, malls have had to find new and creative ways to attract more customers. “It’s essential for mall owners to continuously renew (and) reinvent themselves to maintain excitement and newness for customers and to reflect how consumers like to shop today and what their needs are,” Craig Johnson, CEO of Customer Growth Partners, a retail consulting firm, says.
Traditional anchor stores like Macy’s and JCPenney are no longer drawing customers as reliably as they used to. Many malls are losing their anchor stores altogether when the stores close from pressures related to coronavirus and online shopping. This head wind has forced malls to turn to means other than retail to draw in new customers.
We’ve put together five of the most interesting ways malls are reinventing themselves.
One of the biggest trends that malls are experimenting with to draw new customers is to incorporate experiences, called experiential retail. Malls are adding everything from amusement parks to arcades to aquariums. The idea is to offer experiences that customers can’t get easily elsewhere, with the expectation that they will stay to shop and dine as well.
One extreme example is the American Dream Mall in New Jersey. The mall features a 25,000-square-foot New York themed aquarium, indoor ski slopes, and a Nickelodeon-based theme park. Mall of America in Minnesota, already well known for amusement park rides and an aquarium, has recently adding The Crayola Experience, where kids can make and name their own crayon color or make their art come to life.
Smaller malls that can’t fit or afford these types of attractions are still getting in on the action with trampoline parks, arcades, Virtual Reality experiences and more.
2. Instagram-Worthy Exhibits
The term Instagram-worthy or “insta-worthy” became a popular way to say whether that a place was aesthetically pleasing enough to warrant pictures taken there to post on Instagram. There is a lot of psychology behind the persona which people work to cultivate in their online presence, and everything from restaurants to hotels are working hard to take advantage of the social imperative to post visually dynamic pictures.
For some industries, like restaurants and hotels, these photos can act as a word-of-mouth campaign. A customer takes a picture with a mural and posts it. Their friends see it and want to post themselves with the same backdrop on their own pages, so they choose that restaurant the next time they go out. For some venues, the photo opportunity becomes the main attraction!
Some stand-alone exhibits have been wildly successful, such as Meow Wolf in Santa Fe, known for its neon visuals and other-worldly photo opportunities.
Malls are taking advantage of the trend by finding tenants like Go Pixel Yourself, an exhibit made up of 13 themed rooms. The entire purpose of the business is for customers to take advantage of the photo opportunities for their social media feeds.
Other malls invest in Pop-Up exhibits, like MinaLima’s Holiday Experience, which allows customers to step inside classic fairytales for dazzling family pictures.
3. Concerts and Events
Research shows that consumers are choosing singular- or limited-time experiences over more permanent options. Per capita spending for live events has more than doubled, compared to growth of 27% for non-live events.
Malls that want to capitalize on this are frequently turning to music concerts or performances such as reading events for famous authors or other meet-and-greets or star signings.
One way malls are taking advantage of these trends is by converting parking lots into drive-up venues for concerts or movies. These spaces can accommodate Covid-19 restrictions while providing a better utilization of that space. Parking lots are underused during non-peak times, and don’t provide any revenue by themselves traditionally, while taking up a lot of the space that a mall is on.
The parking lots may also serve as host to food trucks and other pop-up food sellers, offering the mall another stream of income.
In 2000, dedicating 10% of mall space to food was considered outrageous, but in 2011, dedicating 25% was considered commonplace. Food halls have been growing as a staple for malls for years, but all signs suggest it will continue to grow.
The Gen-Z teens of today are spending more money on food than on clothing. Experts theorize that eating out is more an act of socializing than for the purpose of eating, but malls should take note. In decades past, spending time in malls was considered the main pastime of teens.
Food halls are also “e-commerce proof” in a way that a lot of other mall retail stores are not, even with the rise of food delivery services like GrubHub. No other category has such an aggressive level of growth.
Many malls are also seeing a rise in spending when customers eat at the mall. Whereas food courts used to be designed to turn over tables quickly, recently malls have changed the design to encourage lingering. The food is seen as the draw, rather than just an amenity. And with that, the need for aesthetically pleasing and comfortable food halls has become a key element.
5. Co-Working and Living Spaces
As malls try to move away from an over-reliance on retail, one direction has been to add spaces to work, workout, and linger. More and more malls are adding leases like gyms and spas. These types of spaces encourage repeat and continual visitation to the mall.
Some malls have been adding coworking spaces and finding the relationship mutually beneficial. For example, unlike non-mall coworking spaces, a coworking space at a mall doesn’t have to worry about providing food options since the mall food court is nearby. They can also provide free parking, which isn’t always available at many coworking spaces. The coworking patrons are then already at the mall, with easy access to the stores to make purchases.
Coworking spaces have been gaining popularity in the last few years. Especially during coronavirus, when many internet cafes closed their doors to dining and lingering and many workers were working remotely, coworking spaces filled specific community needs. Early signs indicate that companies will continue to offer their workers flexible remote options going forward, with some companies doing away with their offices altogether. But for many workers, working from home every day isn’t desirable, so coworking spaces may be the answer.
Other malls are leasing space to entire companies to serve as their offices. This potentially offers employees a better office experience; not every company can put gyms, food courts, and coffee shops in their own building, but a mall leasing out office space may very well have those options and more.
Finally, some shopping malls, like the famed King of Prussia mall in Pennsylvania, are working to become a complete community, to include housing and hotels along with all the traditional stores a mall has.
Malls, like every other business today, need to adapt, grow, and reinvent themselves to survive in our continually changing world.