BOOM: Retail is Rising!

Shopping center occupancy rates have dropped for the first time in a decade. According to Cushman & Wakefield, the retail vacancy rate is 5.4%, as reported in the New York Times. The article goes on to report on new and expanded shopping centers and malls throughout the U.S. This is consistent with a recent Street Fight feature based on a Placer.ai report.

During and after the pandemic, we saw huge indoor retail spaces turn into ghost towns. Major brands have been filing for Chapter 11, some moving to online-only models and others radically reducing their footprint sizes.

Most savvy retailers have developed omnichannel shopping experiences, so people can buy online and pick up in-store, shop online only, or visit their local retailer to try on or view options before going home to buy.

But the brick-and-mortar shopping center is, apparently, here to stay. But with some new twists!

• Eatertainment spaces (like entertainment venues and activities like axe-throwing, gyms, and family fun centers) abound. Pickleball centers are a mall’s fantasy tenant. They take up large footprints and draw hundreds (if not thousands) of new visitors to shopping centers and malls.
• Service businesses like health centers, tailors, and even co-working spaces.
• Mall operators have long relied on retail-driven events to drive store traffic. However, many shopping centers now view themselves as community gathering places. Student art shows, brand activations, and other popular activities can be found in malls, along with traditional brand stores (many of which are creating and marketing their own interactive in-store experiences and promotions).
• Footprints may be getting smaller in some cases. On the other side of the multi-court pickleball center may sit a micro retailer or a major brand that has decided to minimize.
• Kiosks and pop-ups have been staples of shopping malls for a while. They remain a great way to test new product concepts or provide a semi-permanent shopping experience for brands not ready or willing to commit to retail space. Stores-within-stores are also cropping up, like the Sephora/Kohl’s collaboration.
• Directories are no longer just signs throughout a mall. Location-based technology is used throughout shopping areas to drive traffic to new stores, special promotions, and specific products. 

Whereas anchor stores used to be primarily big-box retailers, we are starting to see a shift to other types of retailers and experiences to draw traffic to both indoor and outdoor malls. We’re also seeing more live/work/shop centers.

It’s all about convenience and giving today’s consumers what they want — all in one place  (and knowing where they are and what they may need on any given day)!

For more insights into retail and MULO (multi-location) trends, please join us at Street Fight LIVE 2024 on November 7th at Meta’s Chicago headquarters.