The Fall and Rise of the American Shopping Mall
In recent decades, spending after-school hours at local shopping malls was a rite of passage for teens and young adults, serving as an important social space for cultivating independence in a social setting. These experiences provided a first taste of consumerism and personal responsibility. The American mall not only provided a venue for leisure activities but also functioned as a microcosm of societal structures.
However, the economic anchors of American shopping malls were department stores, whose sales have steadily declined due to the surge of online retail and the expansion of big-box stores over the past two decades. “Zombie malls” became eerie symbols of a bygone era, with the number of active malls in the U.S. dropping from 2,500 in the 1980s to around 700 today. Yet, over the past two years, mall traffic has grown steadily and significantly, with the Mall of America reporting that its foot traffic increased 11 percent per month in 2024. So, what’s driving the resurgence of the American mall, and what does that mean for retailers that have long relied on their success?
The Rise of 'O2O' Commerce
Online-to-offline sales, or “O2O,” have grown steadily over the past decade as the line between digital and physical consumerism continues to fade. The global O2O commerce market is projected to grow by about 19 percent annually through 2033 — making this one of the most important retail trends to watch. Generation Z is leading the way, with 70 percent of young consumers initiating their shopping journey through social media platforms. However, with 63 percent of all consumers beginning their purchase journeys online, young adults represent merely the leading edge of a critical trend in how Americans shop.
How Malls Have Become E-Commerce Showrooms
Online ads and social content have a powerful effect on creating retail desire, but they also provide an incomplete sensory experience that no virtual try-on can match. Following an engaging online interaction with an equally satisfying physical shopping experience, traditional retailers evolve from bricks-and-mortar to “clicks-and-mortar.” This sets a standard for consumer expectation that no Instagram reel or social influencer-led dupe product offering can match — critically important since nearly three-quarters of all Gen Z consumers regularly choose such alternatives to name-brand items.
3 Keys for Retailers Riding the O2O Wave
For retailers looking to take advantage of this youth-led return to traditional retail and mall shopping, there are three critical considerations:
- The "phygital" handoff: While nine in 10 consumers want seamless interactions that carry their preferences and personal data from online to in-store experiences, only 29 percent of retailers currently meet this expectation. Retailers that bridge the gap between online and offline shopping have a three-to-one advantage over those that fail to meet this need.
- The age of impulse: Today’s consumers spend more on impulse than ever before, and about half of shoppers under 30 are likely to add additional items to their intended purchase at checkout. For anyone who believes the increase in impulse purchases is tied to the growth in e-commerce, eight in 10 impulse purchases are made in a physical retail store.
- Turning content into commerce: Social shoppers peruse videos and other content for everything from fashion tips to lifestyle choices. The more a retail experience feels like a curated shopping experience and less grab-and-go, the more appealing it will be to these shoppers and the more likely they will return. This also presents an ideal opportunity for add-on impulse items that enhance both the monetary and perceived value of the shopping experience.
While Gen Z is leading the way back to shopping malls and in-store shopping, their needs and expectations are rapidly evolving the retail experience for all generations. With their physical expanse and variety of options for both shopping and leisure activities, shopping malls offer an ideal venue for O2O commerce — and in doing so may have well saved themselves from retail extinction.
Ian Baer is the founder and chief soothsayer of the strategic insights platform and marketing consultancy Sooth.
Ian Baer is the founder and chief soothsayer of the strategic insights platform and marketing consultancy Sooth, has been solving marketing’s greatest challenges for over three decades. He has spent his career helping major brands achieve extraordinary success and challenger brands box above their weight class in leadership roles with Publicis Groupe, TBWA, Rapp, Deutsch, and others.
