Are Malls Over?

What people have abandoned is indoor, stale, sunlight less, copycat malls with the same awful pizza and Chinese chains and the same terrible jewelry stores.

People want shopping centers to reflect regional and local character, be in town centers, and offer high quality unique options with a few staples. Get rid of the huge parking lots and add a grocer.

However tacitly this article is pointing to a possible larger problem in the Midwest where cold weather, and permanently depressed economy and a talent drain is leaving them without the tools to build interesting gathering places. This is a far larger and sadder issue.

We could call these things something catchy... like "downtowns".

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There is a reluctance among posters here to consider a "yes" to the question in the title. Which seems strange and perhaps self-conscious. Consider:

"Mall traffic, for a number of years, has been slowing down. Whether it continues to decline somewhat over time, I think that’s realistic to assume."

People from companies as large as the Gap rarely get more explicit than that when talking about dying aspects of their business. The writing is on the wall, folks.

I think the only way to compete with online shopping and with Wal-Mart, is with an experience that goes beyond efficient commerce. Some people, some of the time, will gravitate toward an authentic in-person social environment that is interesting overall, and which happens to include interesting shops.

This also tends to make the place more interesting for tourists, which at least up to a point can have a beneficial impact

Yes, retailers face heated competition from the likes of Amazon, and yes I am not the typical mall demographic. But the malls I know—assuming they have a spectrum of trendy retailers—tend to be just as busy as ever when I have reason to visit. I hate the crowded parking lots as much as I ever did.

If they're stuck in the 1990s with Sbarro, Foot Locker, and JC Penney, yeah, they're probably suffering. But that's just not keeping current with consumer demand and isn't really an indictment of the model in general.

But the more interesting part is at the end - as shopping malls become less desirable, rents will go down. This could lead to a radical reinvention of what a mall looks and feels like. So malls as we know them might be dead, but "the mall" isn't done yet.

[1] http://economix.blogs.nytimes.com/2014/03/13/this-is-the-rea...

It's very clear that city centers are growing everywhere because that's what young people are gravitating towards. It's a lifestyle thing and if they don't consider the lifestyle people aspire to in their future plans, they are going to go bankrupt again.

Take a look at SF for an example. Many people would love to live in the few blocks surrounding the commercial areas of the Mission, the Haight (upper and lower), North Beach, Union Street, Hayes Valley, etc. Those areas are desirable because they are supremely convenient. They are the "modern mall" because they are also the "timeless mall", i.e. the mall that naturally forms when people decide where they want to shop instead of corporate overseers. It's a pattern that exists everywhere in the world in big modern cities to small towns designed before the advent of the car.

Betting on mixed use buildings creates "captive demand", since your commercial store customers conveniently live right upstairs. And they are happy to live in such buildings because they provide the ultimate access by foot to food, bars, supermarkets and other businesses that enrich their lifestyle.

There are a few thing they need to do to make such mixed use properties desirable.

* Mixed use properties need authentic business with unique identity instead of franchises (e.g. a building with a starbucks and a moe's underneath it isn't as desirable as one with a neighborhood coffee shop and a local burrito joint). * The deals struck by commercial owner's associations (COAs) need to consider the needs of the HOA which is often formed after the COA for any mixed use property. Any property (like the Beacon in SF) where the COA has unfair deals that prejudice the residents of a building often end up in litigation that suppresses the value of the the property in the building causing the building to move to having more renters than owners.

Unfortunately many of the new building projects in SF don't take this into account. There are a ton of new projects going up south of the ballpark. All those properties will be filled because of the extremely limited stock of housing, but they are not going to be desirable places to live because of how few of those properties are designed to be mixed use, which is what will make that area feel like a neighborhood instead of a vertical suburb that you need to leave in order to visit a commercial center.

I live in Seattle. There's a lot of malls, shopping districts, and other kinds of collections of shops. There's also a lot of money in the town, to support all these stores of all sizes.

Malls are dying all over because money is increasingly concentrated in the hands of fewer and fewer people. People who want their malls to thrive should be campaigning for a living wage for everyone (or eve better, a basic income) - because all those people will have enough money to happily buy all their pretty trinkets.

It's easy when you have 3,200 employees that you need under one roof, but malls would work great for for 20-500 employee businesses as well. The larger companies would take the spots used by anchor stores and of course the smaller companies could subdivide or take the smaller stores.

There's plenty of parking, they're located in the suburbs where many people live - and the food courts can even stay open, those employees have to eat lunch somewhere.

Where I live, there are...maybe around a dozen proper stereotypical malls within an hour drive. Of those, the two malls I literally grew up in have had very different trajectories.

The one next to my highschool is a veritable empty shell. I think it sits at 40% occupancy, with entire wings boarded up, lights turned off and otherwise abandoned. When I was in High School it was the city center, so bustling and full of people it was often hard to walk in a straight line. I'd leave school and go to the mall instead of taking the bus home, mill around in the arcade for a bit, eat some cheap Chinese food in the food court, bum around in Radio Shack or the electronics section at JC Penny or just hang around with friends mallrats style. It seemed like it would stay this way forever.

But some key demographic shifts happened in the 2000s and the entire city changed, leaving the mall a grotesque enlarged gangrenous tumor hanging off of the attached Walmart. Strangely, the arcade that was there, then closed, is back open again and one of the few signs of life in the entire place.

I've thought a lot about what happened, and the basic conclusion is that it had to do with the housing boom and bust. In the 2000s as the housing market was exploding, people who had lived in this older city suddenly found out their houses had doubled in value. They sold them off and turned the equity into a down payment on a new house in new suburbs. Those new suburbs came complete with new malls (the two new malls near the new suburb I live in are pretty jam packed all the time) and everybody left.

So who bought those old houses? The people who were working on building the new suburbs. In this case largely immigrant workers from Hispanic countries. They needed the cheapest possible housing, and these older areas, though now much more expensive, were still lower cost than the new suburbs.

Because of the higher housing costs and the lower pay these new immigrants had, expensive mall shopping just wasn't on their regular agenda. Better bargains were the draw and Walmart boomed, outgrew their original store and struck an agreement with the mall for cheap property and rent if they could become the new anchor at the mall. If you drive a circle around the mall these days, the parking lot outside of the Walmart is packed to the gills, there are maybe 2 dozen cars in any other lot at the mall combined. A walk through the mall tells the same story, Walmart is buzzing with activity, but right outside the doors, nobody goes anywhere else.

To give you an idea what a huge shift this is and that I'm not imagining it, when I graduated, my highschool was something like 85% White, and 3% Hispanic. In 2012 it was less than 30% white, and 42% Hispanic. For comparison, the demographics of the entire region are 55.41% White and 16.3% Hispanic.

The other mall, in another nearby town, is doing well. It's a larger mall, and the demographics of the area didn't really change all that much. It's not quite as busy as it used to be, the anchor stores seem to be the most empty, but it seems to be getting along fine.

Now in the 2000s, two new malls sprung up in the newly built suburbs. One, a traditional all under one roof enclosed 1.4 million sq ft mall. It's new and pleasant and does pretty well. It's not packed at all times, but business is obviously doing well enough there. The other is an open air discount outlet mall and it's packed, shoulder to shoulder, at all times. I bet if I were to go there right now I'd have trouble finding parking. It's booming, and there's talk of them expanding the property to a sister mall across the main town thoroughfare with a connecting pedestrian tunnel.

There's also a pair of high-end luxury malls in another nearby town that have been through all of this pretty much without hiccup. A time traveler from 1998 to today wouldn't notice much difference except for the fashion.

So yes, I think some malls are dead or dying. That much is clear. But I think the reasons for it are more than just Amazon. There's still lots of services I get from my local malls. I don't go every week, but the 3 or 4 times I do go I inevitably walk out with a few hundred dollars worth of clothes and other goods. And looking at the other people there, the demographics span from young to old, I don't think Amazon has quite replaced the kind of buying where you have to go see the product.

Some stores have caught on to this, and have a seamless exchange program from their online stores. They know that you'll end up buying something you don't like or can't fit into, so they let you bring it back to their physical store, because that's less hassle than shipping it back. They'll even time online sales to preceed in-store sales a bit, so when you come to the store to return the ill-fitting item, why don't you browse the 50% of sale they're offering right now?

edit

Thinking about this more, I think a similar effect can be seen in the midwest. As agriculture labor shifted to much cheaper migrant workers and automation, the people who used to live in these places year round either became less affluent, or moved away. Either way the local malls had a smaller pool of eligible customers and they die off.

"...how come my local mall does more business in an afternoon than the entire Internet handles in a month?"

http://www.newsweek.com/clifford-stoll-why-web-wont-be-nirva...

More relevant to HN: The comments so far suggest that many of us are pretty far removed from not only the demographics that use malls, but also the people who run them and the shop owners and managers that are their tenants. It's important to remember, though, that this doesn't mean they don't exist or that they're somehow wrong.

Many malls are still successful, and to suggest that because some are closing the model is dead is baseless.

In Canada, where we have a lot less malls, they seem to be growing more popular. With renovations and extensions being built to attract and accommodate more shoppers. But there aren't that many major malls here, and they stick to major population areas. I'm always surprised the size of malls in small towns when I visit the US. Northwood, Ohio has a population of 5,000. That doesn't seem like it could sustain a mall the size described, even if you include the surrounding area and assume there's no other malls in the area.

I think the model will change, but malls will stay around for a long time. You'll have larger malls servicing more population, rather than malls for every town.

When I come back home, I would like to take my son to the mall as well and spend the morning just browsing around and buying trinkets. It's fun!

Amazon may be cheaper but come on, going to the mall is not all about shopping, it's about the experience!

http://www.straight.com/news/608306/vancouver-approves-oakri...

The only good places for malls are cute little cities that attract a lot of small town tourists, and places with a lot of people too old to understand the internet but rich enough to not have to work.

Crappy malls are dying. Decent malls in more affluent areas are diversifying their experiences and thriving. In some places, indoor malls make a lot of sense. I live in Minnesota (home of the original indoor mall, Southdale). It's cold here a good chunk of the year, and an indoor mall isn't a half bad idea.

When I go to malls now it seems like nothing but designer clothing stores. I swear there used to be a lot more diversity in the the types of stores you'd find. I'm not sure if this is a real trend or just the haze of childhood memories.

- West Edmonton Mall (Edmonton, AB). In one sense, it is the mother of all greybox malls, surrounded by an asphalt moat. But: it's accessible via local transit, and it's very much in the model of an artificial downtown: it contains hotels, apartments, a hockey rink, an aquarium, and a variety of other things not in the simple greybox mall. This is because it gets really freaking cold in Edmonton in the winter and it's nice to go "outside" without going "outside"; and the diversity of stuff that's there keeps it more alive than at, say, Woodfield (outside Chicago, IL). The food court felt less like a food court and more like a street that had a bunch of little food shops on it. Basically, they've adapted "downtown" to the needs of their climate.

- The Ala Moana Mall (Honolulu, HI). I mention this mostly to contrast the previous one. It's laid out like a greybox mall, but since it's Honolulu, they just skip the whole "roof" thing on the central ways. So it's really more like a pedestrian street with a lot of shops on it. Also, it contains (or is adjacent to?) some non-shop things, and it's well-connected by transit. EDIT to add: There are outdoor malls other places, too, and they're sort of in vogue right now. What makes this one different is how well-adapted it is to its surroundings.

- Providence Place Mall (Providence, RI). Built much more recently (1999 or so), it does include a parking deck but isn't surrounded by asphalt in all directions. It's got entrances that are right off a relatively walkable street, with a couple transit connections (and it's about two blocks from the main central transit station). Internally, it feels nothing like a classic greybox mall: it's five stories with shops on both sides, and lots of windows give it plenty of natural light. It felt much more like a part of downtown than an alternative to it.

So basically, it's possible to set up your mall in such a way that it steers clear of the major problems plaguing malls; and there's certainly reason to think that reinvention rather than abandonment is the mall's likeliest future.

It was run by a gentleman of Greek descent, whom my Grandmother knew, as she seemed to know everyone, and served brunch, lunch, dinner, like any other small cafe. I would routinely get a hot dog, served on toasted white bread. It was tremendous.

I miss those days, and the subsequent teen years of the nineties spent mall-ratting with my friends, hitting the record store, book store, the arcade (don't get me started on the demise of the video game arcade) people-watching...

Times change, and I assume, so will these structures, whether it be to fade into irrelevance or transform into something vibrant and communal again.

Our local mall has 3 anchor stores: Macys, JC Penny, and Sears. Two of those three have reported sales increases in the last quarter but it's a mystery on how Sears stays in business.

The other popular stores are all gone - American Eagle, The Gap, etc. Instead, new tenants have replaced them which make the place look like an indoor flea market.

Also enhancing the flea market look are the kiosks of people reselling things from cell phone cases to cheap sunglasses and worse jewelry than the mall jewelry stores, which are half gone as well. There's even a store that's almost like a 7-11, they sell candy bars and bottles of soda and chips.

Just because not every mall is succeeding, it doesn't mean the whole category is doomed. (Not that I actually like them, but enough people certainly do.)

UPDATE:

So I am from NYC, and I have lived in urban areas my entire life. Finding the right stores so that I could make immediate purchases has never been an issue for me, but based on early comments, I clearly have a myopic view.

I can see how a mall could potentially offer an "urban" experience (meaning that food, stores, people are all conveniently located in a nearby area) in a non-urban area.

The luxury part is a problem too in that Chanel, Gucci etc are given free/low-cost storefronts to up the image of the mall which not only raises prices for normal tenants but means they put their goods prices up too so they look like a serious alternative to the luxury brands. Chinese malls in particular have a lot of made-up Chinese-owned store brands with foreign sounding names, selling utter rubbish at wildly inflated prices.

I wish the 'high end' here was JC Penney or Sears. And forget a reasonably priced Kung Pao chicken; I hope you enjoy chicken feet and birds nest.

1. Instant gratification....If I'm excited about a new product, I can get up immediately and travel to the store, find and pick up the item. Sure, this entails an effort of its own, but at least I'm taking action instead of waiting for a package to come.

2. Ceremony: You may not appreciate this unless you're a videogame buff, too, but there was nothing like waiting in line for GTA5. It was truly ceremonial... High school students, construction workers, businessmen, etc., all stood with me because we were so excited to tear off the packaging of that game. The store even hosted a party featuring competitions and prizes.

Will malls survive? I don't know....the prices, selection and convenience of Amazon are hard to beat. But my advice is to capitalize on the instant gratification and the ceremonial aspects of shopping in-person. Online retailers haven't yet found a way to duplicate this IMHO.

Additionally, I know that best buy and guitar center will price match any price I show from an online retailer on my phone (this is so not obvious, but just ask). Just knowing that, I will occaisonally go to the mall or physical shop to actually look at things & try them out.

I miss the tradition malls because some had unique and good food places. As well as arcades, movie theaters, and places to hang out. Malls that are thriving do so because there is enough population around to support the businesses and they have new stores coming in to fill out the empty spaces.

>Internet sales reached six per cent of total retail spending in the fourth quarter of 2013

I thought that would be a bit higher.

I rarely go to the mall for shopping, but I go many times a week for a walk, a fancy dinner, or just to meet people.