Retail’s White Elephants

Christine Birkner
Marketing News
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Key Takeaways
  • As consumers move away from the cookie-cutter shopping malls of the past, developers are adapting to the shifting retail landscape to help define the future of the bricks-and-mortar shopping experience.
  • Macro-level experiences are just as important as micro-level experiences to keep malls viable
  • The malls that are going to win market share are going to understand what people want and give it to them in experiential ways. ​

​Once considered shopping meccas and fixtures in teens’ social scenes, mid-market malls across the U.S. now are struggling to keep their doors open. Here’s how developers are leveraging insights on evolving consumer behaviors to reinvent the bricks-and-mortar retail experience. 

Twenty or 30 years ago, shopping malls were the place to be. 

Suburban teenagers and their parents flocked to them in droves. New mall openings were heralded events. When the Mall of America opened its doors in Bloomington, Minn., in 1992, offering more than 300 stores, at the time, and numerous entertainment attractions within 4.87 million square feet of retail space, it drew visitors from around the world. The mall still reportedly draws an average of 40 million domestic and international shoppers each year, but in 2014, the mall’s four-person tourism department, responsible for promoting the mall’s offerings overseas, invested in a concerted promotional push in an attempt to lure more lucrative Chinese shoppers to compete with retail-heavy cities such as New York, Chicago and Los Angeles.

But those are rich mall owners’ problems. While higher-end malls and manmade shopping wonders like the Mall of America are still doing well, many retail pundits are sounding the death knell for the traditional, mid-tier mall, and the statistics are, indeed, grim: A major enclosed mall hasn’t been built in the U.S. since 2006, and since 2010, 25 enclosed shopping malls have ceased operation and an additional 60 are on the brink of closure, according to Green Street Advisors, a Newport Beach, Calif.-based real estate advisory firm that tracks the mall industry. In 2014, 15% of U.S. malls were 10 to 40% vacant—up from 5% in 2006—and about 15% of U.S. malls will fail or be converted into non-retail space in the next 10 years, according to Green Street.

“The selling point of malls, when they were originally built and when they started to grow in the ’60s and ’70s, was a volume thing: ‘Come to the mall because we’ve got more retailers than anyone else in town. It’s one stop, 150 retailers.’ That’s not as big of a selling point anymore,” says Christopher Zahas, managing principal at Portland, Ore.-based urban planning firm Leland Consulting Group Inc. “People don’t care if there are 150 stores if they don’t want to shop at most of them.” 

Mall developers are working to turn their fortunes around, adding new technologies and investing in omnichannel initiatives to blend online and in-store shopping. They’re focusing on experiences, adding more high-end restaurants, movie theaters, live entertainment and rotating art exhibits to lure more potential shoppers. Specialty malls, such as malls that appeal to Hispanic consumers, and mixed-use spaces, which blend traditional mall retailers with grocery stores, apartments, outdoor plazas, dining and entertainment, also are transforming the way people shop. As consumers move away from the cookie-cutter shopping malls of the past, developers are adapting to the shifting retail landscape to help define the future of the bricks-and-mortar shopping experience.​​​​

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Author Bio:
Christine Birkner
Christine Birkner is the senior staff writer for Marketing News and Marketing News Weekly. E-mail her at

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