retail news in context, analysis with attitude

The Washington Post had several stories over the weekend about the implications of the impending death of so many Americans malls. Some excerpts:

• "Dozens nationwide have shuttered in the past decade, and a quarter of the estimated 1,100 that remain are projected to follow by 2022, opening large swaths of empty space … The die-off has created challenges for the municipalities and developers tasked with repurposing millions of square feet of vacant retail space and parking lots. But the successes have taken multiple forms: community colleges, public preschools, churches and libraries. Some old malls have turned into micro-apartments or microbreweries, and at least one abandoned shopping mall is now an Amazon fulfillment center, offering a glimpse into consumers’ shifting habits and priorities."

• "Shopping malls are increasingly adding eye doctors, dental offices and cancer centers to their lineups. Medical clinic leases at shopping malls have grown nearly 60 percent since 2017, while leases for clothing stores have fallen about 10 percent, according to data from CoStar Group.

"The nation’s largest mall, the Mall of America in Bloomington, Minn., this month opened a 2,300-square-foot walk-in clinic with exam rooms, X-ray machines and a laboratory. The facility — run by M Health Fairview in a former Shake Shack — offers physicals, travel vaccines, blood pressure checks and other routine medical services. Executives say they hope the clinic will serve the 40 million visitors who come to the mall each year, as well as the 13,000 people who work there."

• "Southdale Center in Edina, Minn., is getting it this month in the form of a Life Time 'resort,' complete with a rooftop pool and beach club. The new gym — which also has a full-service spa, cafe and co-working space — will take the place of a former J.C. Penney store. Life Time is spending $43 million building the three-story facility … Life Time now has country club-like locations at malls around the country — including the Houston Galleria, Tampa’s International Plaza, and Oklahoma City’s Quail Springs Mall — and plans to open more than 30 more mall gyms in coming years. The company tends to take over spaces left behind by large department stores such as Macy’s, Sears and Lord & Taylor, which tend to have their own parking lots and access to the broader mall."

• "Simon Property Group, the country’s largest mall owner, recently invested $5 million in Allied Esports and announced plans to create 200 mall gaming lounges for competitive video gaming events across the country. It’s also creating a video gaming tournament, called the Simon Cup, that will take place in malls in New York and Los Angeles, with final championship rounds in Las Vegas."

• "(Malls) that are thriving are spending millions reinventing themselves as integrated lifestyle hubs — adding yoga studios, medical clinics and microbreweries — populated with more upscale shops. But such targeted investments are often coming at the expense of mall operators’ lower-tier properties — and analysts say the divide between rich malls and poor malls is widening … Even retailers on relatively stable financial footing, including Macy’s, are pruning hundreds of underperforming stores to focus on flagship locations. These closures, analysts say, are also having a disproportionate effect on lower-tier malls and shopping centers, making properties like Landmark Mall in Alexandria, Va., a kind of ground zero for America’s changing retail landscape."

• "These days, the most successful malls tend to be dominated by brands that appeal to higher earners, like Nordstrom, Apple and Lululemon, as well as up-and-comers like Untuckit and Peloton. They also tend to have invested heavily in restaurants, spas and specialty gyms that keep customers coming back, week aft week, even if they’re doing more of their shopping online."
KC's View:
In some ways, this strikes me as a microcosm - or maybe, since it is such a big canvas, a macrocosm? - of retailing in general. The ways in which malls adapt - or do not adapt - to their changing circumstances can provide good object lessons in how stores can and should compete.

It isn't by doing the same old thing.