The Future Of The Mall
Online Shopping

As Sites USA's resident #zillenial, I am often told there was a time when malls weren't empty. Once the “place to be”, malls now remain a relic of the past, when life was simple and acid-washed jeans were cool. While the mall rat era may be a distant memory to some, it's not totally lost. Yet.

King Of Commercial Real Estate Is?

Malls weren't common in America until the mid-70s and didn't truly become the place to be until the 80s. My hometown of Schaumburg, Illinois is probably most well known for Woodfield Mall, one of the first mega-malls of the time. Construction began in 1969, right in the middle of a cornfield, eventually opening in 1971. As families started leaving Chicago for the suburbs, Schaumburg boomed in population. Going from 19,000 people in 1970 to 55,000 people in 1980 required some pretty significant adjustments - so the construction of a retail metropolis began. Today, Schaumburg is home to over 77,000 people and significantly less corn.

Retail commercial real estate has a lot of different categories to manage, from mall regulars like clothing brands and fast food chains to everyday necessities such as grocery and drug stores. Both are incredibly valuable - both to the broker and the consumer. But, while grocery stores have begun to see a recovery for in-store shoppers, those mall regulars have been battling to get their customers back in stores. Shopkick - an online rewards program - surveyed over 20,000 people and found that 75% said they were making more purchases online. However, these same people said they were shopping in-store at the Big Box stores like Wal-Mart and Target 59% more. So why are people shopping in-store at some stores, but not others?

Finding Value In Convenience

It's all about convenience. Modern shoppers have to battle supply chain issues, employee shortages, and confusing loyalty programs in malls, when they could go home and buy their new clothes in a few clicks. With increasingly quick delivery times and “free” online returns, to some, it seems like the easy choice. These conveniences only work for clothing and other mall regulars, though. Since consumers are usually closer to a Wal-Mart or Target than they are to a major mall, it's much easier to drive over and quickly grab whatever you just ran out of compared to the trek around a mega-mall for a pair of shoes. So now the question remains. How can malls establish themselves as modern, convenient, and most importantly, valuable again? While most stores have set up their own designated Buy Online Pick Up In Store or BOPIS processes, these vary by retailer, brand, and service level. A mega-mall like Woodfield can establish curbside BOPIS locations that are convenient for customers and employees.

Some mall owners have already seen this problem on the horizon and are planning accordingly. Indoor malls - especially those from the 80s and 90s - have lost a third of their value over the last four years, while Outdoor malls have actually seen upwards of 13% increase in their value in 2021, despite visitor numbers still being down compared to 2019. Since these types of malls are naturally easier to run BOPIS processes through, they have seen this increase in success and can continue to provide the convenience people clearly value in today's shopping trends.

It's already happening in our home state of Arizona. Paradise Valley Mall opened in 1978, and it certainly looked like it. PV Mall used to be a sprawling indoor mega-mall, not unlike my beloved Woodfield Mall, complete with a complex wing structure, huge parking lots, and stylish linoleum. With a redevelopment plan well underway and a great mixed-used strategy in mind, I know I can't wait to compare Woodfield's 2017 renovation (which finally added a food court!) to PV's total gut job. Both will be a great test for how successful a modern mall can be, and what consumers really see as a value-add. •

Last Modified July 22, 2022