It’s no secret that malls struggle for relevance. Once the “it” hangout for older mall walkers and teenagers, many malls have been left behind by rapid changes in the way consumers live, work and shop.

In mid-2021, Moody’s Analytics predicted that approximately 1,000 or if the traditional malls remained in the United States, 20% would close or undergo “major repurposing” in the very near future, and other analysts have predicted closure rates closer to 30%.

With numbers like that, you could be forgiven for thinking the mall is pretty much dead, but that’s not necessarily the case. “Malls emerged as an answer to suburban living,” Jim Cohen, vice president of SBLM Architects, said in an interview with Retail Touch Points. “With suburban sprawl, we’ve lost downtown and that gathering space that you traditionally find in cities. The solution was the mall. Retail is always about reinventing and changing, and the malls that will succeed today are those that respond to that same concept of being an urban center, a place to go.”

The Great American Dream Garden lounge at American Dream in New Jersey.

As the American mall goes through a period of radical reinvention, department stores are being driven to travel. It’s not just that they’re no longer the go-to anchor for mall environments; they are also forced to rethink their own value proposition to consumers.

“As department stores and retailers change, the central question is how to bring people backsaid Andrew Brezina, senior associate vice president of global design firm CallisonRTKL in an interview with Retail Touch Points. “It will have to be a bit of everything. Department stores had restaurants, now they are putting restaurants back. You start to see more coffee, more food offerings, demonstration kitchens. The food is great, but it can’t just be about the food either. Developers and retailers are working hand in hand to host events in these spaces as well, things like fashion shows at department stores.

From the shopping center to the center of life

Neither Brezina nor Cohen think the mall is dead, but both agree that to survive it must become more than just a mall.

“We have more retail businesses in this country than we need, so it’s actually a great opportunity for many of these centers to reinvent themselves with hospitality, health care, community offerings“, Brezina said. “We’re starting to see a lot of big [department store] anchors drop the number of boxes they have because they can’t support them, there are just too many duplicates. These large leftover boxes can be rearranged for a multitude of uses.

In fact, the new world of working from home presents a unique opportunity, as more people now have the option of visiting malls during traditional working hours. Malls that create spaces for home workers to work, eat, or just hang out will be able to capitalize on this major shift in the U.S. workforce.. “Nobody wants to stay home 24/7, so these local malls become even more important — maybe it becomes your place of work or you go to lunch there,” Brezina said.

Life Time Fitness The Falls Mall Miami
Rendering of the planned Life Time Fitness “Athletic Resort” at The Falls Mall in Miami.

Adding these kinds of work-life-play opportunities also expands the usefulness of these massive resorts: “It’s about attracting people who aren’t there to just shop,” Cohen said. . “Maybe they’re here to see the doctor or practice. The most successful transitions will deliver near 24/7 operation. If that anchor turns into a movie theater, office, or fitness center, those extended hours will better support retail and restaurants. This is the opportunity that developers should take advantage of, even if they may have to rework their pro formas [cash flow projections] and rental rates [if they start] attract more people. »

Shopping centers are experimenting with new types of anchors

These changes, however, mean that department stores will no longer be the anchors of many malls, or even the main attraction.

As an example, Cohen cited The Falls mall in Miami, which will open a Life Time Fitness in 2023. Described as an athletic and As a social destination, the center will include a pool deck and poolside bistro in addition to the workout equipment and fitness studios that are generally expected.

“The falls were probably built 25 to 30 years ago, and they had the traditional Macy’s and Bloomingdale’s anchor setup, but now they’re building a huge Life Time Fitness on one end,” Cohen said. “The idea is that it will be a beach club/fitness center type, so you don’t just go there to work out. It’s a good idea to try something like this. They have the land and all the infrastructure and parking, you just have to authorize the new use.

Floor plan of the American Dream Mall in New Jersey.

The MainPlace mall in Santa Ana, Calif., recently took a different approach with the addition of residential apartments, and another SoCal center, Laguna Hills Mall, halved its retail space to make way for a hotel and residential accommodation.

Only one department store (Saks Fifth Avenue) anchors American dream in New Jersey, advertised as a new breed of experiential retail hub. Its other anchors consist of a Nickelodeon-themed amusement park, a water park, two miniature golf courses, and an indoor ski resort.

We grew up in a time when the mainstays were big box retailers, but people are tired of that, they want something different“, said Brezina. “Now it can be health care, entertainment, education, a sports complex for local schools – it can be thousands of different things. That’s the beauty of what we’re going to start seeing with the redevelopment of these malls – what they can offer their communities.”

But for developers looking to redesign existing spaces, former department stores present unique challenges. “A department store in itself is just a giant box with few windows,” Cohen said. “It will take more than just redesigning the interior to make the changes that will allow these centers to remain viable.with some exceptions like maybe educational type uses, or office spaces if you are cutting into an atrium.

Atrium Aventura Miami Mall
Atrium in a new addition to Aventura Mall in Miami.

“We all love nature, we love seeing the sun,” Brezina agreed. “There are studies showing that people exposed to daylight feel better, buy more and are happy to be in that environment, so you can’t put everyone back in a box. It’s not an insurmountable challenge though; steel and infrastructure are there, just reskin them to bring the outside in.”

Natural scenery was a big part of the recent addition to Miami’s Aventura Mall, which expanded the complex to 315,000 for 2.8 million square feet. The addition offers a “sunny experience” crowned by a 347 feet long vaulted skylight.

Back to the roots of department stores

All this does not necessarily mean the death of department stores, but it does mean that they will have to redefine their form and their role in the mall environment.

“There are certain things that people still want to experience, and a department store can provide those opportunities,” Cohen said. “Part of that also has to do with demographics. In more affluent communities, the department store is still an important part of the shopping experience – china and fine glassware aren’t the kinds of things you’re going to buy online.

Beyond catering to occasions where consumers might already be inclined to seek out department stores, Brezina said these retailers need to refocus on the shopping experience itself. “[It used to be] when you walked into a department store, there was a level of expertise, service and knowledge that has unfortunately been lost by many department stores,” he said. “We can buy anything online now, so how do you stand out? It’s all in the service. Years ago associates had a career in sales, they knew the products. These days, a lot of people out there don’t necessarily know the product, so it’s all about that experience and knowledge. Yes [department stores] keep selling just to sell, well, online is doing it right now.

Brezina also thinks the stores themselves will get smaller and retail space will shrink to make way for more warehousing and online order fulfillment.

Create a community

Cohen and Brezina’s message is mostly positive, focusing on the opportunity for malls and department stores to reinvigorate themselves and become centers of community again. A final key to doing this well, however, is to base the plans on this community and its needs.

“It’s not going to be universal changes, like, hey, every mall should have a Life Time Fitness,” Cohen said. “It has to be very specific about the needs and the demographics of the community.”

“People want more community, and as we expand as a culture, these centers have the ability to bring that community together,” Brezina added. “For different communities, it means different things. Developers will need to meet these communities and understand their particular needs. But that’s the beauty of it all – not everyone will or should be the same.