With online retailers like Amazon dominating the retail landscape and creating a culture of easy online shopping, it may seem that the future of malls is exceedingly uncertain. When you read the news, you might even hear about malls “dying out.” While it’s true that some malls have closed or are facing challenges, there are many malls that are thriving because they’ve adapted to changing customer needs.
At Coldwell Banker Commercial, my team and I work closely with property owners and buyers to help solve these challenges and achieve success at their malls. For malls that have lost foot traffic, some have chosen to redevelop and add new amenities and unique customer experiences. Others have more significantly transitioned into multi-use spaces. Some of the most successful malls around the country have added multifamily units so that residents can essentially live within a mall community with walkable access to restaurants, shops and events.
What Makes a Mall Successful in 2023?
The needs of consumers have changed significantly since the time when malls were the go-to source for shopping. Nowadays, what drives people to malls is more than just the stores (since anything they want could be bought online). Instead, shoppers want unique and social experiences. Industry experts have called this trend “village making” for property owners. A truly successful mall might utilize exciting pop-up stores, plan interesting community events and offer delicious and local food and beverage options. Increasing pedestrian traffic spaces and walkability is also a key factor, which can be done in a variety of ways.
What Can Property Owners Do to Adapt to these Mall Trends?
The ways in which consumers shop is directly impacting the landscape of malls but it’s how retail property owners adapt to these shopping trends that will ultimately shape the future of malls in years to come. There is a great demand for adding multifamily rental units to existing mall spaces, which in turn fosters more foot traffic for the mall. For example, on-property residents are more likely to dine at the mall’s restaurants and shop since they live in the community. It’s a win-win for all involved.
How Adding Rental Units to Malls Can Create Built-in Pedestrian Traffic
Westfield Old Orchard Shopping Center in the Chicago suburb of Skokie, Ill., has gone through many pivots over the past half century. This mall began in the 1950s but had almost gone dark by the late 1980s until it was reinvigorated with the addition of new anchor stores (Nordstrom and Bloomingdales) and the creation of a more desirable walking-scape. In 2022, the property needed to pivot again and began undergoing a nine-figure redevelopment program including adding over 300 apartments in one of the former anchor store locations. These apartments marked the first time that this mall became mixed use, combining residential and retail. The owner’s goal for the renovation and these rental units is to make the mall a vibrant and social place where people go to connect with each other. The renovation is scheduled to be completed this year.
Successful Malls
The Old Orchard Shopping Center is a great example of what makes malls truly successful in 2023. Success is more than just renovating to create rental housing units; it is investing in the overall experience for guests to foster a village type of atmosphere. In this new evolution of malls, increasing pedestrian traffic spaces to current shopping centers and focusing on community integration might just save the shopping mall as we know it.