Declining malls get second lives as lifestyle hubs
Why it matters: Extravagant entertainment options have long been a feature of America's largest malls. Now smaller ones are catching up as they attempt to stave off decay.
- "Especially since COVID, being able to have new experiences for the consumer has been really important," said Dana Olsen, a retail marketing professor at Indiana University.
- Many of these lifestyle additions are meant to help people find and congregate with their community, Olsen said.
Zoom in: New attractions range from ice rinks and huge entertainment venues to niche gyms.
- Conestoga Mall in Grand Island, Nebraska, is undergoing a $250 million facelift, where additions of a hotel, bike trail and entertainment complex are under consideration for the "zombie mall."
- Macon Mall in Macon, Georgia, was revitalized with the addition of a pickleball facility and 10,000-seat outdoor amphitheater.
- The Oakdale Mall in Johnson City, New York, which had few stores in recent years, now has the largest Dick's Sporting Goods location in the country, with an ice rink and a large turf field.
- South Park Mall in San Antonio is expecting a luxury movie theater, arcade, bowling and bumper cars.
Between the lines: Big entertainment features that seem new in smaller malls have traditionally been a part of the country's largest shopping centers.
- The Mall of America near Minneapolis has Crayola, Nickelodeon and aquarium experiences.
- American Dream Mall in New Jersey, which opened in 2019, features a water park and Big Snow, a ski slope and snow destination.
State of play: Mall vacancies are at their highest level in over 15 years, according to a November retail outlook report by JLL, a real estate services company.
- Companies that focus on experiences — such as Picklemall, a pickleball company — actively sought retail space in malls this year, the report said.
Be smart: The goal is a symbiotic relationship between retailers and lifestyle features.
- Stores at The Falls in Miami have seen an increase in traffic since the introduction of upscale health club Life Time to the mall and expanded dining options, said spokesperson Carol Cox.
Zoom out: Lifestyle and entertainment attractions are the norm in many malls in China, Japan and Hong Kong, said John Zhang, a marketing professor at the University of Pennsylvania.
- Over the past decade in Asia, he's noticed these attractions are especially targeted to drawing in younger crowds, seemingly more comfortable with online shopping.
Flashback: After the onset of COVID, malls were used for utilitarian purposes.
- A Macy's in Vermont was temporarily turned into a high school in 2021 when toxic industrial chemicals were found on school grounds.
- Amazon bought buckled malls and turned them into distribution fulfillment centers.
Reality check: Not everyone is as optimistic about experiential retail revitalizing malls.
- "I'm very cynical," said Mark Cohen, the director of retail studies at Columbia Business School.
- Decades ago, department store demos of ice cream makers or vacuum cleaners used to draw crowds to the mall, he said. They don't anymore. Movie theater visits have been replaced by access to at-home streaming.
- "There's always going to be an opportunity to demonstrate ... to create physical interaction," Cohen said. "But it's not going to reverse the direction of the tides in places which have fallen by the wayside."