Allison Wheeler

Ms. Leila Chawkat

G/T Independent Research Period 1

May 12, 2023

Counteracting the Death of the American Shopping Mall

Table of Contents

I. Abstract

II. Introduction

III. Literature Review

IV. Data Collection Methods

V. Conclusion

VI. References

Abstract

This paper investigated strategies for counteracting the death of shopping malls in

America. This study used a mixed-methods approach, including review of literary sources and

the surveying of consumers. The findings revealed and went into depth of several factors,

including the rise of e-commerce and changing consumer preferences, that have contributed to

the decline of malls. This information became the background that supported the continuation of

this study by identifying ways that shopping malls and in-person retail can be changed. Shopping

malls will only survive if they become destination locations for retail, dining, entertainment, and

recreation. The results of this study have important implications for the future of the American

shopping mall, providing valuable insights for consumers, business owners, and industry

professionals alike who seek to address this ongoing challenge.

 Introduction

During the 20th century, shopping malls created the foundations of suburban

America. Multiple generations can recall the memories that remain instilled in their minds. The

bright colors of how people once knew it to be are fading to black. Are Americans watching the

slow death of shopping malls in the United States?

The decline of brick-and-mortar retailers, particularly in American shopping malls, can

be attributed to many factors such as the increase in online shopping, the shift in consumer

behavior due to recent events such as the COVID-19 pandemic, the change in the commercial

real estate market, a surge of vacancies and closures, and a slow shift to redundancy. The decline

of American shopping malls can be counteracted by turning shopping malls into destination

locations: a well-rounded experience for shopping, dining, entertainment, and recreation.

Literature Review

There are many contributing factors to the decline of the shopping mall that are

essential background for finding solutions.

Department stores take up a major part of shopping malls. “About 30 percent of

the total mall square footage in the United States belongs, or did at one time, to

department stores like Macy’s and Nordstrom and JCPenney” (Loofbourow,

2021) Department stores are considered the “mid-market” and it is these stores

that are failing. This failure isn’t specifically due to e-commerce, as the lower

market; stores like Walmart, etc and the higher market; stores like Nordstrom, etc

are not failing in the same way the mid-market is. (Callahan, Clark, 2017) “A

long time fixture of American culture, shopping malls have suffered for decades

amid a rise in online shopping, a decline in visitors in department stores, and,

 more recently, the COVID-19 pandemic, which kept consumers at home.” (Levin,

2022) Brick-and-mortar retailers as well as traditional shopping malls faced

significant pressures when online shopping and e-commerce became increasingly

relevant. This started long before the pandemic. (Morgeson, 2022) “At the height

of the pandemic, forecasters suggested that over one-third of all malls would

permanently shutter. Despite these predictions, malls persist.” (Wells, 2022) The

pandemic had a major impact on changing consumer habits.“People are less likely

to spend money on expensive items that will go out of style quickly” There can be

a generalization made that people are being a lot more careful with how they

spend. (Valensky, 2022) Usual business methods just won’t work anymore in a

post-pandemic world. “The pandemic has rapidly changed consumer shopping

habits, and both online and offline retail strategies will need to follow suit.”

(Davies, 2022)

The commercial real estate market is impacting the present changes relating to the

shopping mall decline.

The surge of in-store closures is prompting mall owners to “walk away”

from struggling properties. (Fung, 2017) There is less appeal to malls

because they’re outdated in comparison to new modern retail spaces such

as outlet villages and pop-up shops. (Valenksy, 2022) “They [mall owners]

need to create new reasons to come, or extend a visit to the mall.” (Loeb,

2022) Mall owners must create a new business model in order to secure

leisure anchors. (Devendeville, 2020) Their properties have existing

 needs, but it is up to the will of owners to take initiative and invest in mall

redevelopment. (Aizenman, 2021)

In order to survive the decline, it is essential that shopping malls become an

experience; destination locations for retail, dining, entertainment, and recreation.

Circumstances such as location, access to water, and public transportation

make shopping malls excellent candidates for redevelopment and reuse.

(Aizenman, 2021) The structure is there for shopping malls, it just needs

to be used strategically. Department stores are no longer the attraction to

shopping malls. Giving shoppers variety rounds out the mix of tenants,

drawing in more people because they can do more at the mall than they

could a decade ago. (Zumbach, 2016) In the present day, US retail

spending on food and drink already surpasses what they spend on

groceries. (Mitchell, 2019) Consumers desire an experience, and it can be

proven that they are willing to spend for it. “Visitors no longer come to

shopping malls primarily to buy next season’s fashions; they go to

socialize, to engage and be entertained.” (Mitchell, 2019) Therefore, it is

obvious that food, beverage, entertainment, and recreation are the new

magnets, driving foot traffic into malls. A proposed lease strategy shift in

the industry is that 30% of a mall’s leasable area shall be devoted to food

and entertainment. (Aizenman, 2021) The most successful malls today

incorporate a variety of entertainment, fitness, personal services, and food

tenants. (Schmidt, 2020) For example, The American Dream in East

Rutherford, NJ still managed to open in 2019, despite the industry’s

 present decline. It features an amusement park, a water park, an indoor ski

hill, and an ice skating rink. (Hartmans, 2023)

Data Collection Methods

Methods:

The goal of this research study was to determine the causes for the decline in American

shopping malls and most importantly, how this downfall can be counteracted. In order to

successfully work towards the objective of the research, a qualitative research design was

determined to be the ideal choice. Collecting this data aimed to analyze current trends in

consumer behavior relating to the shopping mall and its related alternatives. A qualitative

research design is effective in identifying trends in consumer behaviors because it allows an

enriched exploration of people’s behaviors, perspectives, and personal experiences. Another

component that needed to be carefully considered was the method that would be used to collect

the data. Because the objective of my research requires finding common behaviors between

American consumers, using a questionnaire to collect data was the most beneficial way of

producing meaningful information to the research. Self-identified American consumers are an

extremely broad demographic to target. Therefore, this data collection method was best in

ensuring accuracy in data because a multiplicity of people were able to answer the questionnaire.
 Analysis/Results:

After an analysis of the data collected from the questionnaire, commonalities were

determined between the behaviors of American consumers, mostly those between twelve to

twenty years of age. Many conclusions can be made as a result of this data, which can help us to

understand the rapid decline of these shopping malls.

Respondents were asked “What reasons do you still visit shopping malls in present

times?”. At an 80% majority, the most common answer was to shop around while not looking for

anything in particular. This contrasts with the 55.4% of respondents who visit shopping malls to

shop for a specific item in particular. The first trend that can be inferred from this data is that

when visiting shopping malls, consumers prefer a browsing method of a shopping over shopping

for a specific item.

Another commonality within the data is that 89.2% of respondents identify Amazon as an

alternative to mall shopping that they use more frequently. This is not surprising for many

reasons. Amazon can be seen as a favorable option to the majority of consumers because of

efficiency, convenience, competitive pricing, etc. The second most common frequent alternative

to mall shopping is that stores such as Walmart or Target have everything needed by the shopper.

66.2% of shoppers agree to this statement. When single stores have everything needed, shoppers

have less of a reason to visit the shopping mall.

The most surprising conclusion that can be withdrawn from the data is that 73.8% of

respondents see an increasingly noticeable decline in shopping malls. It is not staggering that the

majority recognizes this decline, but rather that there are 26.2% of respondents who do not see

this obvious decline. The majority of respondents to this questionnaire are younger consumers,
so they might not be able to identify a decline because they don’t have a clear reference point to

what malls used to be like.

Discussion:

In conclusion, while the decline of the American shopping mall is a concerning issue, this

data provides valuable insights into potential solutions that could help revive the industry.

Through the analysis of trends in consumer behavior, changes in the commercial real estate

market, and the impact of the COVID-19 pandemic, it has become clear that shopping malls

need to transform into experience-driven destinations in order to survive.

The data collected in this study specifically explores commonalities between the

experiences, perspectives, and behaviors of American consumers. Using similarities in what

consumers are looking for in their shopping experiences, such as the ones identified in this data,

is what allows strategies to be developed and implemented to improve the attractiveness and

competitiveness that the shopping mall industry may currently be lacking.

Consumers are choosing Amazon for efficency, convenience, and competitive pricing, as

well as stores like Walmart and Target where it is easy to find a specific item that they are

looking for. It is crucial for shopping mall owners to adopt a holistic approach that incorporates

the latest trends in retail, dining, entertainment, and recreation. Reimagining the shopping mall

as a destination that offers a wide range of experiences will lead to malls attracting a generation

of consumers who prioritize experiences over products.

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