Shopping Mall Trends to Watch For in a Post-Pandemic World

By : 360 Realtors

26 September, 2020

The COVID-19 crisis has changed the way we look at retail zoning in malls. Now the cookie-cutter approach to repurposing the space is neither feasible nor viable for mall operators because the demand for space and demographics are different in each area. We have listed seven trends that will affect the future of shopping malls:


1. End of an Era for Anchor Tenants


Initially, the shopping malls were centred around anchor tenants. The purpose of an anchor tenant has traditionally been to drive footfalls into the mall. Worldwide, the department store category as a whole has been in downfall for at least a decade now. In the last decade, the US has witnessed the closure of more than 1200 department stores. The poor performance of department stores has had a painful ripple effect on malls.

Shopping patterns have changed with more and more consumers choosing to shop at different vanilla retailers offering a bouquet of deals. New-age malls have also stopped focusing on anchors to drive, instead they are adding a whole host of over-the-top experiences to attract customers.  


2. Retail Mix is Changing

The retail mix is changing in malls. Earlier, as much as 70% of stores in a mall was allocated to soft goods retailers selling footwear and apparel.  Malls are shifting that mix towards more entertainment, F&B and experiences.  



3. Rise of Digitally Native Tenants

Digitally native brands are amid testing brick-and-mortar retail. These online-to-offline brands are witnessing a major chunk of purchases made at their brick-and-mortar stores.  Lenskart, Firstcry, Caratlane, Zivame, Pepperfry are some of the digitally native brands which are now one of the leading vanilla tenants for malls. Even Amazon is planning to locate its stores in malls. A year back, it opened Amazon 4 Star store in Oakbrook Center, Chicago, and very soon is planning to enter the physical retail formats in India as well. Some of the drivers causing digitally native brands to open stores are high customer acquisition, more flexible lease terms, greater availability of space due to vacancies and the fact of the matter that customers still prefer to have the touch and feel experience before making the purchase.


4. Dawn of Pop-up Retail

When we talk about digital-gone-offline, pop-up shops are having a moment. Temporary storefronts leverage the scarcity principle and the excitement of never-before-seen products to provide an experience that drives shoppers to show up — and buy. From leading e-tailers to luxury fashion brands, retailers of all sizes are popping up across the country to provide curated shopping experiences and engage customers. Pop-up Retail not just earns revenue for the brands but also for the mall operators. Pop-up stores even help the brands in interacting with customers face-to-face, collect shopper data, and generate social buzz.



5. Resizing/ Recategorizing/Rezoning

Mall operators have transformed vacant space into other uses including offices, entertainment and grocery and restaurant tenants to revitalise the mall. For example, if a mall operator adds a grocery store or a pharma/drug store or a convenience store to a mall, then the consistent weekly traffic that comes along with these categories of stores can translate into more sales for other retailers in the mall.  Sometimes, instead of introducing new types of retail in vacant space due to the exit of a large retailer like a department store, space is cut up making space for smaller tenants. 


6. Experiential Retail Will Rule the Roost

New-age customers would splurge more on an experience rather than buying commodities. Mall operators are now leveraging on creating community experiences, experiential retail as a way to stem declines in footfalls. In post-pandemic times, the role of in-house FEC/entertainment zones, F&B/ casual dining, community hub within a mall will see a spike because now people will look at spending time in a hygienic, clean, safe space where all the SOPs are adhered to. As travel will now be confined, more and more people will visit malls for recreation purposes rather than shopping. 


7. Growing Traction Towards Sustainable Retail Brands

In the post-pandemic world, people will be more cautious toward the environment and will prefer to shop from ethical, sustainable brands. Many brands like Adidas, The Body Shop, H&M, Uniqlo have special sustainable ranges. In the future, customers would prefer shopping from brands that are having a bare-minimum subsequent impact on humans and the environment. These brands will create financial value while protecting the environment and generating social value, both within operations and along supply chains.