Survey: Malls to Flourish as Centers Tap Into Experience-Led Shopping
More than half of the U.S. population visited a shopping mall in the past three months. In the future, Americans adults are confident that physical stores will continue to capture the majority of their retail purchases. Shoppers’ priorities are changing, and successful shopping centers are expanding their reach beyond traditional retail, offering entertainment, services and other activities to keep consumers coming back.
The future of shopping centers is going to be determined not only by what you can buy there, but also by what you experience there. American shoppers are going to malls in great numbers — 165 million people in the past three months — but increasingly they're going there because of what the shopping experience has become: a variety of choices, in both goods to buy and entertainment to enjoy. And the very best retail locations are going to be leading this trend.
That’s the clear message of a survey commissioned by the International Council of Shopping Centers of more than 1,000 adults, who were surveyed in February. The overall message is one of strength for the retail and retail real estate industries. Two-thirds of adults said physical stores will continue to capture the majority of their future purchases. A significant share of American adults expect shopping malls to exist five years and 10 years from now; however, nearly half of adults expect those malls to look different due to factors such as online-only retailers taking up physical space as well as renovation or redevelopment.
It’s no wonder, considering that the retail experience has already changed so much. Retail locations have undergone a stunning shift, with updates in store mix as well as entertainment and food options. American adults approve of the changes, with 70 percent of adults agreeing that malls should focus on creating engaging experiences for consumers — not just great shopping, but also entertainment, services and other activities.
Nearly 60 percent of American adults agree that shopping malls they visit have done just that, staying fresh and keeping up with consumer tastes. Just over half of American adults say they agree that retail and shopping malls will emerge in a better position in the future. And just under two-thirds of American adults are rooting for malls to thrive, precisely because they're valuable assets to their communities.
Clearly, there’s a question of perception vs. reality taking place. A surprising number of Americans — 63 percent — believe that a “retail apocalypse” is occurring due to the rise of online shopping; however, the occupancy rate across the retail real estate industry stands at 93.1 percent. It’s not unexpected that given the torrent of negative media accounts of some retailers’ struggles that a majority of Americans think the industry is struggling. At the same time, adults by a wide margin (66 percent) agree that retailers need to be in both physical locations and online.
And that’s exactly what’s happening. The advantage that physical retail offers is both in embracing omnichannel and in moving to the kinds of in-store experiences that consumers increasingly want. Consumer tastes are driving that future: 61 percent of Americans say they would like to see physical stores maintain their size but shift from offering a wide range of inventory and focus more on “interactive brand experiences” and other ways to support all retail shopping channels.
Incredibly, three out of four Americans want their physical retail to be vibrant and diverse, offering a mix of retail and services, especially restaurants — precisely because it helps their local community when such malls exist. Retailers and real estate owners agree, and they’re embracing the idea of physical retail as more than a shopping center. It’s not uncommon for retail centers to feature farmer’s markets, craft fairs and live entertainment.
Retail centers have long been community destinations, and consumers continue to count on them as vital gathering places. Through enhancements of the customer experience, shopping centers will be strongly positioned to engage and serve consumers for seasons to come.
Tom McGee is the president and CEO at the International Council of Shopping Centers (ICSC), the global trade association of the shopping center industry.
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