The Future of Shopping Malls

Our clients' problem is a consequence of the continuous change in customer needs and the abundance of shopping malls competing for the same customers. According to a Deloitte study, commercial density in Spain is 341 m2/1000 inhabitants, with an average of 9 shopping mall openings per year. The problem is real: 43% of Spanish shopping malls need repositioning or will soon become obsolete.

Globally, the situation is even more serious. In the article "Why The Death of Malls is more about than Shopping", Professor Leonard Schlesinger theorizes that malls "were built for social interaction patterns that increasingly don’t exist". For new generations, malls are places where their parents used to hang out. This, coupled with busy schedules and a wide variety of websites and apps for shopping and socializing, is making malls obsolete.

When asked about a possible solution to this problem, Daniel Hurwitz, retail investment advisor, replies: "I don't think we are overbuilt, I think we are underdeveloped." Started in 2000, Deadmalls.com documented over 300 closed malls in the United States, and the number is growing. The project's goal is to raise awareness about how rapidly the retail sector is changing and that entrepreneurs must find solutions to adapt to new customer demands.

Commercial spaces must be reinvented. But can we somehow combine offline and online shopping to get the best of both worlds? And what role does technology play in this fusion?

We believe the solution is not to demolish old malls as Hurwitz suggests, but to combine the advantages of online and offline sales to build a superior shopping experience.

Firstly, malls shouldn't even try to compete with online stores, says McKinsey. Traditional malls will never match the convenience, availability, and price of online stores. Instead, malls can offer extraordinary experiences. Live concerts, games, go-karts, exhibitions, spas, and fitness events will make customers want to spend more time and money shopping.

In the study "The Future of Shopping Malls", Lubelczyk & Brown state that the role of technology in the 20th-century mall was for power systems. In the 21st century, its role is to create platforms that connect individuals. Tomorrow's mall is a hyper-connected retail city that uses technology such as AI-infused walkways, eye scanners to personalize customer visits, and smart changing rooms. Retailers will have to use specific technologies to track data in order to anticipate and meet real-time demands.

To improve the customer experience, shopping malls need to identify the customer touchpoints that are most responsible for satisfaction. These are the areas where our client will invest to create a cohesive customer experience that will generate increased customer spending and loyalty.

An example of combining the advantages of online and offline sales is SneakerBoy, a showroom where customers can see, touch, and try on any style or size from the sample gallery. Merchandise is ordered online and shipped directly to the customer.

In a presentation on the future of retail, Doug Stephens, one of the world's leading retail industry futurists, talks about retail as an experience. We know that the value for Generations Y and Z goes beyond products. The solution would be to combine the two and create a truly immersive shopping experience where we don't buy products; we buy stories. In his opinion, physical stores remain relevant because they satisfy our need to socialize and connect with people who are genuinely enthusiastic about products.

To succeed in the future, the retail industry needs to resemble the consumer it serves, write Brown and Lubelczyk. Our job as consultants is to continue questioning the role of shopping malls and explore technologies that transform them into modern, relevant, and immersive shopping destinations.