'Shoptainment' will save shopping malls, analyst says
Published in Business News
Before the COVID-19 pandemic turned the world upside down, industry analysts across the board were lamenting the death of the shopping mall.
Online shopping had gripped the American consumer, people were ordering dinner online with delivery right to their door, and once longstanding brick and mortar stores including massive chains were shuttering locations all over the country.
Bruce Carlson, the managing director for Northern California for Kennedy Wilson Property Services, who works in the “shopping mall relocation” business, said the industry seemed like it was destined for demise. Carlson and his employer were one of 24,000 businesses who recently attended the three day International Council of Shopping Centers annual convention at the Las Vegas Convention Center, and said the outlook pre-COVID-19 was grim.
“Everyone was freaking out five years ago because Sears was closing, J.C. Penney was closing stores, Macy’s was closing stores,” said Carlson. “So you have two ends of a mall, the anchors, which are now wide open, so there was a lot of terror around that.”
Carlson said those malls are still mostly around, however they now have new tenants anchoring them, which has drastically reshaped the look of large plots of commercial land in countless cities and towns. Large retail stores have now been replaced by more smaller, community driven tenants, chopping up spaces that were once filled by big box stores.
“Now we’re seeing apartments in those spaces, medical, health care uses, and in some cases offices have gone in because of their location to residential,” he said.
According to a McGraw Hill Education study, malls saw an increase of traffic last year, with American malls and outlet centers reporting an occupancy rate of more than 93 percent, up from 91 percent the previous year. Across all U.S. malls and outlets, 2022 saw more stores announcing openings than closing.
Part of the rebirth is credited to what some are calling “shoptainment,” which means previously predominately retail-based spaces are incorporating more entertainment options, keying on people’s desire to get out of their homes after COVID-19.
Carlson said he’s now working with co-working company WorkWise and escape room company Escapology, which is located at Town Square Las Vegas, to find new locations to open specifically in shopping centers. He’s also working with Urban Soccer Park, an Idaho based company that builds small five-a-side soccer fields in areas normally reserved for commercial spaces.
The original designers of Town Square, Design 3 International, were also at the ICSC convention, and said that when Town Square first opened in 2007, its open air, 97-acre design — which had everything from a children’s park to art galleries and a movie theater — was seen as groundbreaking. Now it’s all the rage, said Design 3 International’s Director of Marketing MJ Dame, as “experience” has become the anchor tenant.
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