The rise in popularity of e-commerce platforms has made shopping more convenient and time-efficient than ever, making it easier for shoppers to purchase items from their favorite brands with the simple click of a button and without having to enter a physical store.
As great as online shopping platforms may be, they have decreased the need for traditional shopping malls, threatening their existence.
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The former vibrant, crowded malls that used to be known as the hang-out spots of choice are simply not what they used to be. They have become more empty as the years go by, with too many vacant storefronts that are slowly transforming them into abandoned structures that could almost emulate a scene from "The Walking Dead."
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Due to the amazing real estate lying under these huge constructions and the rise in lease prices, thousands of malls face being completely demolished or repurposed and turned into new developments that bring greater profit.
However, a recent turn of events has just flipped the mall business upside down, providing a glimpse of hope for these endangered shopping complexes.
Image source: Shutterstock
Mall traffic rises and gives hope to a dying business
September and October were tough months for local malls, but In November, malls saw some of the highest foot traffic of the year.
According to a study by Placer.ai, foot traffic at indoor malls was up by 6.4%, open-air shopping centers increased by 4.8%, and outlet malls rose by 3.8% year over year.
These increases are mainly attributed to the huge pull of in-store shoppers on Black Friday and the days leading up to it.
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Over the last couple of years, companies have turned Black Friday deals into multi-day affairs. Instead of offering customers deals on just one day, most have implemented early promotions. This allows customers to shop more calmly, simultaneously avoiding the shopping craze and incentivizing them to spend more money.
On Black Friday weekend, open-air shopping centers saw the highest visit increase out of all mall categories, with a foot traffic spike of 6% compared to last year. Indoor malls also saw an increase in traffic of 5%, with outlet malls up by 2.7%.
Although online shopping may be efficient, in-person shopping provides customers with some perks that can only be obtained when entering a physical store. These include trying on clothes, seeing the items in person, and even getting in on exclusive in-store deals.
The largest shopping center owner is hopeful for the future of the mall business
Simon Property Group (SPG) , the largest shopping center owner in the U.S., has also been affected by the extinction of traditional malls and has faced its fair share of rough years. However, the resurgence of malls has started to affect its business positively.
Although the company reported negative net income for its third-quarter earnings report of 2024, its occupancy increased by 1% compared to last year.
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The Simon Property Group attributes this increase to new companies like SKIMS, who have gone from being fully e-commerce platforms to entering the in-person shopping space. The younger generations have also revived the mall business by not only shopping in-store but also using it as a local hangout spot, just like it once was.
"The mall continues to be a unique gathering place, said Simon Property Group CEO David E. Simon during an earnings call. "We're seeing a rejuvenation of the younger consumers wanting to hang out at the mall."
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