The Future of Shopping Malls: How Retail is Transforming in 2024

Years ago, malls were the beating heart of retail. But the rise of e-commerce, the effects of the pandemic, and the rising costs of running a brick-and-mortar store have all impacted shopping mall foot traffic

That doesn’t mean the future of shopping malls is disappearing altogether. But they will look different compared to what we’ve ever known to keep up with the times.

To navigate the future, shopping mall owners and tenants are using data. At pass_by, we offer the highest in market accuracy with 94% correlation to ground truth, over 15 data inputs, and a full 90 days of predictive feeds. Book a call now.

Here’s everything you need to know on the future of shopping malls:

  • Present day landscape
  • How technology is changing the future of shopping malls
  • Mixed use developments
  • Opportunities
  • Role of e-commerce
  • Sustainability
  • Future of shopping malls
  • Present day landscape

    Malls have evolved, becoming much more than just a place to buy goods as consumer trends shift away from traditional retail experience to omnichannel. 

    • Community hubs: Coresight Research estimates 25% of America’s 1,000 malls will close in the next five years. To avoid “dead malls” and empty stores, communities are looking for alternatives. One example is the Crosstown Concourse in Memphis, which was once a Sears, Roebuck & Co. retail and distribution center. Now, it’s a mixed-use building of apartments, office spaces, restaurants, and retail stores. 
    • Make shopping an event: Rather than only selling products, malls now aim to make the retail experience just that—an experience. This includes events, masterclasses, a varied retail mix, job shows, and much more. 
    • Pop-up shops and kiosks: To bring customers back into the mall, pop-ups and kiosks can deliver a fresh experience at a low cost. They also have a lower startup cost. Short-term leases are an ideal solution for retailers looking to expand or test a new space and for mall owners breathing new life into a mall. 
    • Improved digital experience: The interest is part of daily life and retail has adjusted to accommodate this through mobile apps, self-service kiosks, loyalty programs, and unique partnerships. 

    The future of shopping malls is difficult for mall owners and retailers to navigate. But by implementing data-driven decision-making, optimizing tenant finding, and utilizing an omnichannel experience whenever possible, malls do have a great and innovative future to look forward to. 

    How is technology influencing the future of shopping malls?

    Gone are the days when shopping malls were simply a collection of stores. In today’s fast-paced digital age, malls must do more than just offer a variety of products. They must also provide a unique, engaging and often, Instagrammable experience to draw today’s tech-savvy consumers.

    Virtual reality

    Technology is significantly influencing the future of shopping malls by enhancing customer experience. One key way this is happening is through the integration of augmented reality (AR) and virtual reality (VR) technologies.

    These technologies are being used to create immersive, interactive shopping experiences, allowing customers to try on clothes virtually, visualize how furniture might look in their homes, or explore different stores within the mall without physically being there.

    Over a third of consumers used VR to visualize how how furniture would look in their home. In turn, only 13% of shoppers aged over 55 years did the same. Other uses included overlaying of makeup and virtual try-on of clothes.

    Example: IKEA developed The Place App. The app lets shoppers utilize augmented reality with their phone camera to put furniture into their homes in the virtual world. This way, consumers can easily see if a piece of furniture suits their home, decide between products, and make a purchase decision with lower chances of returning the item. 

    AI

    Artificial Intelligence (AI) is another technological advancement shaping the future of malls. AI can be used to analyze customer behavior, preferences, and foot traffic, enabling retailers to offer personalized recommendations and promotions.

    This not only improves the shopping experience for customers but also helps retailers increase sales and customer loyalty. AI can also be used to improve inventory management, predict demand for products, and ensure that stores are always stocked with the items customers want.

    While generative AI is catching the headlines, AI is being put to work with great success behind the scenes in retail. 

    Example: Our predictive insights have up to 90% accuracy compared to ground truth verified foot traffic data. Retailers use this data to predict the number of visitors for the next 90 days and optimize their stores. 

    Mobile apps

    Mobile technology is also playing a crucial role. Many malls and retailers are creating their own apps, which can guide customers to stores, provide information about sales and promotions, and even allow customers to make purchases directly from their phones. These apps can also collect data on customer behavior, which can be used to further personalize the shopping experience.

    Example: The SIMON Malls app offers 3D maps of all SIMON malls in the USA, plus information on opening times, dining reservations, exclusive promotions, and in mall navigation. 

    Interactive kiosks

    Another transformative trend is the use of digital signage and interactive kiosks. These technologies can provide customers with real-time information about sales, promotions, and events, as well as directions to stores.

    They can also be used to display interactive advertisements, engaging customers and encouraging them to make purchases in high foot traffic areas.

    Example: Self-service kiosks are growing in number as retailers see the potential and efficiency, but few retailers manage kiosks like Walmart. Customers can use self-service kiosks in Walmart to locate an item, even down to its exact location on a shelf, and check if a product is in stock. The kiosk then gives directions to the desired product on a 3D map. For heavy items, customers can use the kiosk to request home delivery. 

    Omnichannel retail  

    Lastly, the integration of e-commerce and physical stores, often referred to as ‘omnichannel retailing,’ is another key trend. Many retailers are finding ways to connect their online and offline operations, allowing customers to buy online and pick up in-store, or return online purchases to physical stores. This not only provides customers with more convenience but also drives traffic to the malls.

    Example: Starbucks is known for its innovative omnichannel retail strategies. The Starbucks app offers reward points, lets customers order ahead of time, and (with Starbucks’ partnership with Spotify) allows customers to view songs played in-store and save them to a playlist. 

    How shopping malls are changing to mixed-use

    Mixed-use means a shopping mall is a development that includes uses beyond retail, including office spaces, fitness centers, apartments, commercial space, and event areas. By 2030, it’s expected that 45% of shopping malls will incorporate mixed-use development.

    In an analysis of 135 mall development projects, JLL found that over 53% of redeveloped malls included housing, and 34% included office spaces. These were the most common uses, but other purposes such as retail were also merged into the developed. 85% of projects kept a retail anchor on site. 

    Complete revelopment is an option for some malls, such as those in high demand housing areas. Other malls can make adjustments as well. Over 50% of shopping malls are expected to add non-retail anchors by 2025, such as fitness centers, office spaces, or residential units.

    Adding a diverse business mix or considering redevelopment options could be the next steps for your shopping mall. 

    Opportunities

    As shopping malls continue to change with the times, there are plenty of opportunities for tenants, mall owners, and investors beyond the traditional commerce malls offer. 

    Experience-driven spaces 

    In a digital age where buying products is just a few clicks away, shopping malls must evolve to offer more than just a retail experience. They must become experience-driven spaces.

    The newly designed malls could potentially host classes, art exhibitions, pop-up shops, or mini-fashion shows. It’s about creating those moments that draw visitors in, motivating them to capture and share their experiences on social platforms, and ultimately encouraging more people to visit. 

    Example: The dog-friendly mall Fashion Show Las Vegas installed a dog wall art. 

    Partnerships with high end retail 

    Partnerships with high-end brands can add a luxury edge to malls, attracting a more affluent customer base and driving more profit per sq.ft.

    Example: Toronto’s Yorkdale Shopping Centre is renowned for its luxury retail offerings that attract both locals and tourists alike. Correia estimates that by 2025 about 18% of Yorkdale’s square feet will be dedicated to luxury retai. 

    Diversifying investment 

    Including non-retail experiences can attract a broader group of consumers. For instance, brick-and-mortar retail malls could consider incorporating residential and office spaces, gyms, or even co-working spaces. As a result, they accommodate a larger demographic, leading to increased foot traffic and higher usage of mall amenities. 

    Role of e-commerce

    E-commerce sales in the States accounted for 15.4% of total sales in 2023 according to the Census Bureau. 

    Online sales an important chunk of the retail business. While it can be a major competitor in the market, with giants such as Amazon offering a major obstacle to many businesses in the form of fast delivery via Amazon Prime, there is a way to merge e-commerce with brick-and-mortar. 

    In-store pick up rose by over 554% YOY in May 2020 while online orders increased by 194%. While this trend skyrocketed because of the pandemic, consumers still enjoy its convienience today. 

    While in-store pick up does take some effort to implement successfully without increasing waiting times, the effort is more than worth it. According to Retail Dive, 40% of in-store pickup orders result in additional in-store sales.

    For shopping malls, this means click and collect is an important aspect of e-commerce that needs to be seamlessly implemented. 

    How will sustainability trends affect shopping malls in the future?

    Sustainability trends are already affecting shopping malls. It’s not only consumers, investors, mall owners and tenants are all looking at ESG trends with interest. 

    A major example of this is the Mall of America. In 2024, the Mall of America took part in Earth Month by selling vintage clothing, child-friendly environmental activities, and informative sustainability tours of the mall. It also included a partnership with One Tree Planted. Customers could take part by scanning a receipt into an app. For every receipt scanned, a tree would be planted. 

    The days of simply donating to charity are over. In the future, shopping malls will be actively involved in sustainability trends. Some ways this is already happening are: 

    • Charity round ups: Consumers may opt-in to round up their basket total at checkout to donate to an environmental charity. 
    • Enviromental iniatives: Shopping malls can take part in tree planting programs and have ESG goals. 
    • Renewable energy: With vast rooftop space, malls are ideal users of solar panels. In 2019, The Mall at Short Hills installed 9,000 solar panels. Expected to offset more than 1,900 tons of carbon a year, the system produces enough energy to power roughly 403 homes for a year.

    What is the future of shopping malls?

    Unless you have a crystal ball, no one can say with exact certainty. But, with predictive insights and data, we can start to paint a picture. It’s clear that shopping malls will remain, but their form and feel will be different. 

    As consumer behavior changes, malls, too, will continue to change to match. We’ve already begun to see this with augmented reality, mobile apps, and omnichannel retail. 

    The future of shopping malls is one of variety where digital experience is at the forefront. Expect to see more pop up shops, mixed use redevelopments, a wide business mix, and more ways to connect online in and out of the mall. 

    To navigate the future, shopping mall owners and tenants are using data. At pass_by, we offer the highest in market accuracy with 94% correlation to ground truth, over 15 data inputs, and a full 90 days of predictive feeds. Book a call now.

    Future of shopping malls Faqs 

    What is the average lifespan of a shopping mall? 

    The average lifespan of a shopping mall is about seven years. 

    What will shopping malls look like in the future? 

    Shopping malls are likely to look different in the future. Some malls may be redeveloped or repurposed into a mix of residential, commercial and office use. Smart shopping malls will implement digital experiences, such as VR product visualisation, to improve the customer experience. 

    Malls will also be more sustainable with solar panels on rooftops and trees in the area to meet ESG goals. 

    How will the rise of online shopping impact the future of malls?

    Online shopping has an impact on shopping malls, but it is likely malls will remain in a different form. Malls will use in-store pick up to encourage online shoppers to visit the mall along with events, digital technologies, and engaging experiences to make in-store shopping a unique and appealing experience to compete with e-commerce. 

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    Kelsie Colclough
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