{"id":111906,"date":"2023-08-24T14:33:00","date_gmt":"2023-08-24T18:33:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=111906"},"modified":"2023-08-29T14:34:21","modified_gmt":"2023-08-29T18:34:21","slug":"why-are-malls-dying","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/why-are-malls-dying\/","title":{"rendered":"Why Are Malls Dying in the US? (+ How to Save Them)"},"content":{"rendered":"\n<p>Why are malls dying in the United States? What factors are contributing to their downfall? How can they adapt for the future?<\/p>\n\n\n\n<p>In the 1980s, the mall was a vibrant epicenter in America. Today malls are struggling to survive, their demise fueled by online shopping, large department store closures, and the COVID-19 pandemic. America\u2019s 700 remaining malls are trying to stay alive by modernizing stores and digitizing processes.<\/p>\n\n\n\n<p>Keep reading to learn why malls are struggling and what can be done to revive them.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-evolution-of-malls\">The Evolution of Malls<\/h2>\n\n\n\n<p>In the 1980s, <a href=\"https:\/\/www.shopify.com\/retail\/future-of-malls\" target=\"_blank\" rel=\"noreferrer noopener\">more than 50% of US retail sales<\/a> occurred in malls. Today, American malls are dying, showing some of the <a href=\"https:\/\/www.wsj.com\/articles\/local-malls-stuck-in-death-spiral-plunge-in-value-a7998b7d\" target=\"_blank\" rel=\"noreferrer noopener\">lowest levels of performance and success<\/a> across all types of commercial real estate.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-history-of-malls\">History of Malls<\/h3>\n\n\n\n<p>The rise of the American mall coincided with <a href=\"https:\/\/www.businessinsider.com\/the-rise-and-fall-of-the-american-mall-2020-7\" target=\"_blank\" rel=\"noreferrer noopener\">suburban growth and prosperity<\/a><strong> <\/strong>in the 1950s, <strong>offering a \u201cthird place&#8221; for communities to congregate beyond the home and workplace.<\/strong> Architect Victor Gruen pioneered the indoor mall concept with the 1956 Southdale Center, sparking a mall-building frenzy across the country.<strong>\u00a0<\/strong>By the 1980s, 1,000 malls were being built in the US each year. <\/p>\n\n\n\n<p><strong>Today, <\/strong><a href=\"https:\/\/www.forbes.com\/sites\/pamdanziger\/2023\/03\/20\/how-to-bring-zombie-malls-back-to-life\/?sh=340ea3356531\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>just 700 malls remain<\/strong><\/a>, their demise fueled in recent years by <a href=\"https:\/\/www.wsj.com\/articles\/local-malls-stuck-in-death-spiral-plunge-in-value-a7998b7d\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>online shopping<\/strong><\/a><strong>, department store closures, and the <\/strong><a href=\"https:\/\/www.businessinsider.com\/the-rise-and-fall-of-the-american-mall-2020-7\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>COVID-19 pandemic<\/strong><\/a>\u2014all of which led to declining foot traffic and, in turn, more store closings. From 2018 through 2020, mall cornerstones like Macy\u2019s, JCPenney, and Sears <a href=\"https:\/\/www.wsj.com\/articles\/local-malls-stuck-in-death-spiral-plunge-in-value-a7998b7d\" target=\"_blank\" rel=\"noreferrer noopener\">closed 875 department stores<\/a>\u2014compared to just 175 closures in 2016 and 2017 combined.\u00a0<\/p>\n\n\n\n<p><strong>As a result, malls\u2019 value has <\/strong><a href=\"https:\/\/www.wsj.com\/articles\/local-malls-stuck-in-death-spiral-plunge-in-value-a7998b7d\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>dropped precipitously<\/strong><\/a>. Today:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>20% of malls financed through <a href=\"https:\/\/www.investopedia.com\/terms\/c\/cmbs.asp\" target=\"_blank\" rel=\"noreferrer noopener\">commercial mortgage-backed securities<\/a> are worth less than the amount of money they borrowed.<\/li><li>Older malls are valued at <a href=\"https:\/\/www.wsj.com\/articles\/local-malls-stuck-in-death-spiral-plunge-in-value-a7998b7d\" target=\"_blank\" rel=\"noreferrer noopener\">50% to 70% less <\/a>than their peak valuations in 2016.<\/li><li>Newer, \u201cwell-performing\u201d malls are worth 50% less than their 2016 value.\u00a0<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-malls-in-transition\"><strong>Malls in Transition<\/strong><\/h3>\n\n\n\n<p>Experts say that, in an effort to survive and stay solvent, malls are making a variety of physical and digital changes, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/www.shopify.com\/retail\/future-of-malls\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Modernizing outlet malls<\/strong><\/a><strong> by recruiting <\/strong><a href=\"https:\/\/www.hollingsworthllc.com\/50-digitally-native-companies\/#:~:text=Using%20this%20definition%2C%20a%20digitally,or%20all%20of%20their%20sales.\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>digitally native brands<\/strong><\/a>.<\/li><li><a href=\"https:\/\/www.shopify.com\/retail\/future-of-malls\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Turning mall kiosks into international retailers hubs<\/strong><\/a>.<\/li><li><strong>Launching<\/strong> <strong><a href=\"https:\/\/www.shortform.com\/blog\/pop-up-retail-stores\/\">pop-up stores<\/a>.<\/strong><\/li><li><strong>Adopting digital technologies<\/strong> such as \u201cendless aisle concepts.\u201d<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-malls-of-the-future\"><strong>Malls of the Future<\/strong><\/h3>\n\n\n\n<p>Experts say that for malls to thrive\u2014not just survive\u2014they must seamlessly integrate on- and offline shopping options and give customers an enhanced shopping experience. This \u201c<a href=\"https:\/\/www.shopify.com\/retail\/future-of-malls\" target=\"_blank\" rel=\"noreferrer noopener\">omnichannel approach<\/a>\u201d might offer:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Customized virtual shopping opportunities<\/strong>, like shopping by appointment and personalized consultations with expert stylists.<\/li><li><strong>Curbside pickup<\/strong>, which enables customers who order goods online to pick them up at their local store.<\/li><li><strong>Contactless payments,<\/strong> which speed up and make payments more secure.\u00a0<\/li><\/ul>\n\n\n\n<p>Further, malls need to<strong> target products, services, and experiences to consumers based on their preferences<\/strong>, which retailers can identify using data from sources such as <a href=\"https:\/\/www.techtarget.com\/searchcustomerexperience\/definition\/CRM-customer-relationship-management?Offer=abt_pubpro_AI-Insider\" target=\"_blank\" rel=\"noreferrer noopener\">Customer Relationship Management systems<\/a>, apps, WiFi, and GPS. Some experts say that effectively leveraging consumers\u2019 interests will allow malls to reinvent themselves as \u201c<a href=\"https:\/\/www.kearney.com\/industry\/consumer-retail\/future-of-shopping-centers\" target=\"_blank\" rel=\"noreferrer noopener\">consumer engagement spaces<\/a>\u201d that blend on- and offline retail; cater to different demographic groups\u2019 interests; and prioritize innovation, sustainability, and community connections. Forms these spaces might take include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Innovation centers<\/strong>. These \u201csmart\u201d spaces would allow customers to use novel technologies, consult with experts, and potentially exchange personal shopping and product assessment data for discounts on items. <\/li><li><strong>Values centers<\/strong> would bring together tenants with shared beliefs or identities\u2014such as local designers and craft brewers who care about animal rights and the local community.<\/li><li><strong>&#8220;Retaildential&#8221; spaces<\/strong> would integrate retail and housing services to cater to specific demographics, like young urban hipsters or retirees. For example, a space dedicated to older adults might include medical and estate planning services, community rooms, and exercise facilities.\u00a0<\/li><li><strong>Destination centers <\/strong>would emphasize immersive experiences such as indoor skiing, roller coaster rides, or museums.\u00a0\u00a0<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Why are malls dying in the United States? What factors are contributing to their downfall? How can they adapt for the future? In the 1980s, the mall was a vibrant epicenter in America. Today malls are struggling to survive, their demise fueled by online shopping, large department store closures, and the COVID-19 pandemic. America\u2019s 700 remaining malls are trying to stay alive by modernizing stores and digitizing processes. Keep reading to learn why malls are struggling and what can be done to revive them.<\/p>\n","protected":false},"author":8,"featured_media":111910,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,24],"tags":[727],"class_list":["post-111906","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-society","tag-articles","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Are Malls Dying in the US? (+ How to Save Them) - Shortform Books<\/title>\n<meta name=\"description\" content=\"In the 1980s, more than 50% of US retail sales occurred in malls. Today, malls are dying. 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