Armageddon or opportunity?
As retailers shutter stores faster than a teenager texts and the malls they once occupied dot the landscape like hulking shells of decay, real estate developers face the urgent question of how to reinvent that icon of American consumerism: the shopping mall.
The questions are: Can they save it in time? And how?
According to the International Council of Shopping Centers, there are 599 regional malls in the U.S. The boom in development started around 1970, when there were 143 regional malls, and lasted about two decades through the Eighties.
Of America’s 47,000 shopping centers — which include 1,100 categorized as enclosed malls, according to Encyclopedia.com — many will and should disappear. As Sandeep Mathrani, chief executive officer of General Growth Properties, told WWD in an interview last year, “Thirty percent of all retail should go away in the U.S. I am talking about 30 percent of strip shopping centers, 30 percent of power centers, 30 percent of outlet centers, 30 percent of lifestyle centers and 30 percent of malls.”
Some centers are still thriving — mostly the so-called “A” malls situated in affluent, heavily populated parts of the country. But most others are losing shopper traffic and tenants. Macy’s, J.C. Penney, Payless, Abercrombie & Fitch, Sears, Kmart, Ascena Retail Group, Michael Kors, Bebe and Gymboree are among the retailers sharply cutting the store count — and that doesn’t include independent stores that can’t make it in the online era. Fung Global Retail & Technology is projecting 9,452 store closings this year, up 53 percent from the number of doors that went dark amidst the Great Recession in 2008. Estimates from PricewaterhouseCooper and Credit Suisse range from 90 million square feet to 147 million square feet of retail space could go dark this year. The store closures will drag business at malls down, not to mention the mood and consumers’ will to shop, and force many to shut down.
So what are their options?
WWD contacted people not directly tied to or associated with malls — as well as some of those who are — seeking a fresh perspective to the issue of what the future might look like. Here’s what they offered up on the subject:
Martha Stewart, businesswoman, writer and TV personality: The mall is in trouble. It’s not the attractive gathering place that it once was. People are tired seeing the same stores over and over again. The uniqueness has disappeared. Make it more entertaining. Give it more variety. There should be more interaction. In China, there is more interaction. Give it more restaurants mixed in with retailers. Do-it-your-selfers. A mix of small, interesting shops with bigger shops. A fantastic Balthazar bakery. Not just horrible donuts or coffee. Make the outside spaces as interesting as the inside spaces. Malls are too big. Cut back on the size, make them easier to get around. What’s that famous one in Bal Harbour — Bal Harbour Shops. It’s one of the nicer malls that exist. It does have a lot of variety, and gardens and trees. Amazon out in Seattle has these three giant futuristic geodesic domes filled with exotic plants from all over the world. It’s not a store or just a display for Amazon. It’s a gathering place and a tourist attraction.
Danny Meyer, restaurateur and ceo of Union Square Hospitality Group: The mall should be a physical manifestation of what people are doing virtually with their smartphones — remote control life, to have exactly what you want, when you want and with the people you want to be with. The mall [should be] the piazza for people to actually be with people, to have an experience you like, whether it’s an exercise class; reading; going to see more things that cannot be experienced by pushing a button on your phone; more food; more opportunities to break bread, looking another human being in the eye. I also think malls must be more localized, too; most successful piazzas are the ones that look like where they are. Have more local brands, not at the exclusion of national brands, people want to feel like this is mine, this is authentic, that I can only have this experience here. Anything to foster human connection is good. A really good mall should invest in whatever system could deliver the kind of information that lets you know if there is an influencer or influential food person appearing in the store. Have, potentially, a small amphitheater so local people can play music or give a reading. Basically use high tech to enhance human touch. Malls have to really become communities, not just places for merchants.
I kind of think this mall of the future is more of a federation of interesting web-based experiences that can get you to leave your apartment or house to experience something you can’t get on your phone.
Simon Doonan, creative ambassador-at-large, Barneys New York: I am an optimist, regardless of where people are buying their clothes. They still love to gather in groups. People crave the company of other people. There is a phenomena called group effervescence. People love to go to festivals, to sports events, being with large groups of people. It’s a fundamental human need, malls have always served that need. For the future, you need to identify things that speak to people, like flash mobs. Start to find creative ways to integrate that into the mall environment. Every mall should have an Apple store in the center. A SoulCycle. Experiential things. Malls just need to be reoriented to a less museum-y, less showroom-y environment and more experiential. It has to be vigorously interactive. Why not do ping-pong or clogging? Things that are fun, hokey, playful. Let’s get away from the stiffness and create these flash mob type moments. Just pivot. Instead of being so hard-edged, glamorous and austere with marble, chrome and glass, soften it up a bit. Take your cue from the High Line [in Manhattan]. People love the High Line because of the nature. There is an indoor/outdoor feel to it. Focus less on making [the mall] so pristine. Add foliage, picnic tables, make it feel more funky, less squeaky clean. That hard-edged glamour is not what people emotionally respond to. You should feel like you’re in a coffee shop in Brooklyn or Venice Beach. You need Washington Square dumped in your mall.
Peter Marino, principal of Peter Marino Architect: The problem with most malls in the U.S. is that they only offer a segmented shopping experience. “Here’s, the luxury section, here’s the food court, etc.” It’s not like a real city experience, like Manhattan, where every neighborhood has a mix of shops. SoHo has Chanel, Louis Vuitton and 32 places to buy used clothing. Malls replaced the old town squares. But they got so sterile. Malls could have more cultural events, even in the suburbs. An art show or gallery show of lithographs or posters. You can have legitimate photography shows. I don’t believe that shopping means you can’t have art. Unless there’s a lot of amenities, I’ll shop online. Bal Harbour Shops in Bal Harbour, Fla., and Americana Manhasset in Manhasset, N.Y., have lovely outside vegetation. Malls in Dubai have activities such as skiing and ice skating.
I wish they [malls] weren’t so big. They throw in everything but the kitchen sink. Maybe there is no mall of the future. Maybe we’ll go back to hanging out downtown. I would erase miles of beige floors and brass handrails. Aesthetically, malls need to be less beige and have better layouts, and the ghetto-ization of brands selling similar price points is not all pleasant.
Doug Stephens, founder, Retail Prophet: Not long ago, the mall was the center of life in a community. It was the apex of convenience, where consumers could shop multiple categories and brands all under one roof. The mall was also a social hub where young people would meet up, shop or just hang out. Today all that has changed and the mall as we’ve known it must change to survive. The mall of the future will comprise significantly less but better, more experiential retail. Brands and retailers who truly deliver immersive and dynamic guest experiences will dominate the landscape. Stores will become places that consumers visit to learn, play, try and be inspired. And unlike today, the productivity of these locations will not be measured on a sales-per-square-foot basis, but rather on the basis of experiences per square foot, and their value as a catalyst for sales across channels. Accordingly, the revenue model for malls will change to look more like a media model, where brands are charged occupancy fees based on the value of measured consumer brand impressions, rather than the typical lease arrangement of today.
We’ll see significantly more entertainment, food and hospitality at the mall. Unique assortments of restaurants, markets, food vendors and live entertainment venues will draw online-weary customers. Art galleries, hotels, spas and fitness centers will round out these multifaceted centers. Start-ups and grassroots retailers will make up experimental collectives that will add interest and variety amidst a core of better-known national brands. And lastly, all of this activity will share the connective tissue of technology. Technology will alleviate typical shopping friction associated with a trip to the mall. Parking issues, waiting in line and lugging parcels home will become a thing of the past. Technology will also bridge the gap between online and off-line to infuse the consumer’s trip with the data about products that they are accustomed to finding online such as reviews, videos and search tools.
Ippolito Pestellini Laparelli, architect and OMA partner: Environments that can offer different experiences by transforming themselves is something that our office has been working on for a long, long time. It ties back to the idea of department stores being social aggregators and never providing a static experience. That means that a space that serves as a sales platform is occasionally an events platform, a presentation platform that you can achieve in multiple ways. Everybody is selling the future and in the end I don’t think anyone is selling the future. Retail has an incredibly fast speed of transformation that makes it almost impossible to predict what will happen in five years’ time. There are some very interesting transformations, which are maybe looking parallel to department stores when they used to really work as social aggregators as spaces with extremely recognizable and iconic architecture. But another track is recognizing the role of the digital. The combination of these two may be the quintessential image of the department store [referring to the models of the 19th century]. The possibilities are made by available digital infrastructure. It’s that combination I see as the possibility of a future for department stores in general, but I would not embrace one direction or the other as the solution.
Iris Apfel, fashion maven: First of all, I practically never go to shopping malls. I don’t like them. They seem very commercial. I know a lot of places and shopping malls are not very safe. Some years ago, my husband was badly mugged in the shopping mall. They have to do something about safety. The safety angle is very important. Then if a mall has 50 stores, all more or less with the same merchandise, what is the point of going? There’s nothing very individual. The anchor department stores, all the national chains. Nothing is original or unusual. Malls should have more creative shops, do a few things to encourage younger designers, do some oddball things. Take a little less rent from people who can’t afford big numbers, to bring exciting tenants, interesting restaurants or cafés. How about a little basic imagination? Things aren’t bad just because there is electronic shopping. They should have attractive things, a variety of things that are well displayed.
I did a big project in Hong Kong for the Landmark [an office and shopping development]. It was very high end. There were two forums. They sold tickets and it was very well attended and they asked me all kinds of things. You can bring in lots of people if you have the right events and if they’re done well. Talks about art would be very nice in some places, but in some places no one would show up. People like concerts or interesting lectures. But you wouldn’t want to stage a rock concert next to a gated community.
But I have no idea. This is so far away from the way I live.
Francisco Costa, fashion designer: I believe malls need to become community hubs and centers of entertainment and no longer just be considered transactional points of sale. This is an opportunity to create communal gathering points where people can socialize, hang out, and choose to buy or choose not to buy. You could have beautiful vending machines for food, beauty products and even underwear — but there has to be interactivity. There should be free entertainment and even places to work; it’s almost like having private clubs without memberships. I think it’s important to create visual excitement with great, emotional marketing attached to those places. I also believe that brands have to give back today. Social issues are much too important and can be positive platforms to engage with your consumers.
Linda Lombardi, vice president, global store design and visual merchandising, Godiva Chocolatier: People want more to do than just shop. They want a place to go with the family. A place to eat some good food and watch movies. We have started to see a lot more of that and we will see a lot more experiences in the mall. Empire Outlets [a proposed project for Staten Island, N.Y.] will become a premium lifestyle center, with hotels, outdoor music festivals, an amphitheater — a real place for the community. That’s really exciting. People want more and are really demanding more. With Saks Fifth Avenue leaving Short Hills, what does the property do with a big box like that? Do you become multiuse real estate. Could it become something that’s more residential, or do you add a multiplex? I do believe we will see a lot more emphasis on wellness, yoga classes, concepts like SoulCycle. We will see a lot more food markets. It becomes where you go and get everything you need — shop for clothing, pick up food. Big beautiful wine shops have a place in the mall. Create a destination for the entire family to do more. People want green space. It goes back to Roman times, to piazzas where people would eat and socialize. It becomes more than just shopping, more than just big boxes. It becomes a total experience — fine dining, hotels. If there was some greenery and walking paths, people would drive to the mall just to eat and go to a great movie theater. Make it more the center of town. Add music events, an ice skating rink so the mall really anchors your town…I wouldn’t be surprised if some big boxes converted to luxury residences supported with transportation and restaurants. I see the mall as more multiuse. Why not have luxury condos and fine dining and a whole experience? You have to drive traffic to the mall.
Patrick Janelle, Instagram personality, influencer and brand consultant: We have our retail store, Stay, at Platform in L.A. To me, it’s one of the best examples of what a new shopping development can feel like. There are offices, coffee shops, you can get lunch, and there are hip fashion and beauty chains. It’s absolutely perfect for wanting to spend time and to hang out there.
There’s actually less emphasis placed on perfection and having to make really good circulation happen the way they do at a traditional mall. It’s a bit organic: Things are planned in a natural way, letting people wander. There’s also the idea of connecting people. I also think SoHo represents what a good shopping development could feel like. I live there and I can shop there; I can eat in some of the best restaurants; run into people; I can go to the gym. I think it’s a reflection of what the best kind of mall could be.
Carlos Jereissati Filho, president and ceo of Iguatemi Group, Brazil: You have to look for different dimensions. The design of malls has to change a lot. Malls don’t have to look like malls. They have to be very open and illuminated and have terraces and lots of places where people can meet. The contents of malls has changed a lot. In São Paulo, we’re putting in event spaces for special events, fairs and weddings. You have to have large spaces and smaller spaces for meetings. You can have live theater and a lot of exhibitions.
We’re entering the educational business. We already have a fantastic infrastructure.We bring in all types of people to talk about different things. We brought in an Italian chef to teach. We’re creating an annual conference, Iguatemi Live, focusing on fashion and cinema. We’re bringing people from around the world to discuss trends. We want people to be here for many different reasons and the retail will exist around the experience, and that makes them shop.
Retailers have to understand how to use technology to make the experience in the physical store more interesting. Customers sometimes don’t want to take what they bought with them. Technology can be very efficient. We’re trying to partner with Uber. Now with the amount of Uber surrounding us every day, its more of an opportunity.
We’re going to complement our annual photography exhibition with craft and folk art. It’s been a big trend to enhance the quality of our craft in Brazil. A property can only be as great as its design and content. We need to have a very live environment. We’re opening the rooftop like the Metropolitan Museum of Art in Manhattan and working to do something like that with the Art Museum of São Paulo.