12 Oct, 2017

Is Rebranding The Only Hope For Shopping Malls?


E-commerce has been the talk of the retail industry ever since stores like Amazon and eBay appeared on the scene and disrupted shopping as we know it.

With the rise of e-commerce, a new customer landscape was created. These customers possessed different priorities, compared to the brick and mortar shopper. They wanted a quick, and seamless way to shop, from the comfort of their computer screen. Walking into a shopping mall suddenly became a secondary preference for these shoppers.

“The shift in how people are shopping means the future of retail fulfillment is no longer just about more stores or shopping centers,” Cushman and Wakefield analysts wrote.” Business Insider reports. 

The debate about e-commerce stores vs. brick and mortar stores has been a heavily discussed topic among retailers. Some say brick and mortar is not dead, others argue the opposite.

 So, Who’s Right?

The debate can depend on the age of the shopper, and where they are found in the generation gaps. Younger generations are known to be tech-savvy, so that plays a role in their shopping preference. Baby boomers have shopped at brick and mortar stores longer, so some say that they have built habits to prefer malls.

Despite the age theory, online shopping has not killed the brick and mortar concept completely, it has just created a new conversation for retailers to understand. Malls are starting to listen.

According to a recent report found on RetailDive, mall developers are rebranding due to vacancy rates more than ever.

Just how much has the vacancy rates of malls increased? 

“For Neighborhood and Community malls (strip malls), the vacancy rate was 10.0% in Q2, up from 9.9% in Q1, and up from 9.8% in Q2 2016. For strip malls, the vacancy rate peaked at 11.1% in Q3 2011.” Reis reports. 

Vacancy rates rose when big retailers like Macy’s, Sears and Gap decided to close 100+ stores in a variety of malls in 2017 alone. These stores were closed in order to meet the needs of their customer, to put their focus on a more digitally-centered approach. The reasons are pretty simple. Technology is more expensive than clothing, and more clothing means more employees. Closing stores, in order to create a digital shopping experience, is a cost-saving and effective move for large retailers.

With stores like Macy’s no longer occupying these spaces, one would suggest that the shopping mall will lose a large number of customers, causing foot traffic to decline. All of these components are negative for malls.

“Shopping centers and malls are increasingly looking to diversify their portfolios as longstanding anchors like Macy’s, J.C. Penney and Sears close stores and leave gaping holes at their properties. Those closures are exacerbated by specialty retailers like The Limited, Wet Seal, Payless, Rue21, Bebe and Payless reducing their footprints or shuttering altogether.” Retail Dive reports. 

Simon Property Group CEO David Simon is remaining hopeful that retailers will go invest in stores once again. Until then, malls are forced to create new spaces like food concessions to take their place.

Besides from food concessions, what else are malls doing to stay relevant in the retail space?

Malls Are Rebranding

In order to keep up with the ongoing digital trends, malls are forced to rebrand and create new strategies to target customers. These efforts are innovative and designed to bring in new customers and stay ahead of the e-commerce competition, and most times digital components are integrated.

“Recent research has suggested that many malls need to revamp their business models to focus less on department stores. Simon in specific announced that it would invest $1 billion to redevelop its mall assets earlier this year.” Retail Dive reports. 

When it comes to the shopping experience, digital components are now a crucial factor to success. Even when shoppers are in the store, they are most likely on their phones. We live in a world where we can always be connected digitally. Mobile phones give customers the power to be more on the go than ever before, which means the retail industry is forced to adapt.

Shoppers depend on their phones to research things like coupons, price checking, and product research. Knowing this, brick and mortar stores, especially malls, can incorporate digital components to operations.


In September, shopping mall operator Simon Property Group announced that chatbots will be installed on Facebook messenger for all the Simon malls in the U.S.

The goal of this strategy is to be able to connect with customers in a seamless way.

“Patrick Flanagan, vice president of digital marketing and strategy at Simon Property Group, told the publication that his company saw an opportunity to use chatbots to enhance customer service and provide shoppers with a quick, convenient way to access information about each mall, such as how to navigate the malls or find specific stores.” RetailDive reports

Simon partnered with Snaps, a marketing conversation platform in order to build the bot for a brick and mortar mall. The bot will work with the messenger app and will be able to answer questions on a 24/7 basis. This will allow customers to feel more engaged with the shopping experience in-store, as well as receive more personalized encounters.

The bot is designed to know things about the customer using data in order to make information available digitally. In an interview with eMarkterer, Patrick Flanagan, Vice President, Digital Marketing, and Strategy, Simon Property Group revealed that the bot will work as an always available digital concierge.

So, if a customer is walking around the mall, and has a question, they can access the bot immediately and customer service will assist them. Just like that, all with the swipe of their mobile phones.

“As the power and reach of messaging apps grow, the need to offer shoppers great brand experiences through these platforms is also growing. For most brands, this means that great platforms are needed to build, manage and measure one’s messaging efforts.” Patrick Flannagan reports through eMarketer. 

The key to integrating chatbots into brick and mortar strategies is to make sure that there is data centralized on the app, and the platform is up to scale with the digital developments constantly occurring.

Digital Media Screens

Advertising just became a whole lot more interactive in malls. With digital media screens, customers can be engaged and interacted with in a virtual way.

Westfield Corporation, a large shopping center company has put digital media screens into their malls this year, replacing the traditional advertisements. Instead of seeing ads on escalators, 450 digital media screens will be displayed in 17 out of 33 malls in the U.S. These screens will give shoppers up to date and relevant information messages connecting to the stores in the malls.

Along with displaying messages, the screens will work to track how many customers walk by the display, which collects real-time data about customers such as age, gender, and demographic data. Customer’s emotional responses to the ads can also be tracked through the digital screens, as well as determine how long they are present in front of the screen.

“At a time when people are glued to their smartphones, the screens aim to grab their attention while in the malls. However, in the future, Westfield plans on incorporating mobile into the strategy by serving ads to consumers’ phones when they are in proximity to the screens.” DigiDay reports. 

All of this data can put retailers in a position to understand information about their customers that can be valuable when it comes to making decisions regarding how to properly target customers.

Advertisers can also benefit from these screens because it can reveal what creative efforts work, and what do not. Brand engagement is expected to grow with these screens, which makes brick and mortar stores appealing to retailers.

What Is Next For Shopping Malls?

Shopping malls have always been a nostalgic memory, representing flourishment, both for brands and customers alike. Now, a question hangs where customers once were, haunting retailers and threatening tradition. This question has everything to do with digital transformation, and what is next for retail. Is e-commerce taking over brick and mortar shopping experiences?

As stated before, this question has a variety of answers, depending on who you ask. David Simon, for example, remains hopeful when it comes to the shopping mall, and he doesn’t believe that e-commerce is to blame for the downfall of in-store shopping. He has hope for retailers and believes that they will join the shopping mall once again. According to Retail Dive, he is up for the challenge.

“I’m hopeful that they’re going to reinvest in their stores, improve their inventory mix and service their customer better,” he said. “And, by the way, we’ve got to have the same pressure on us to do that. So, it’s a two-way street. We are up for the challenge.”

Although David Simon remains hopeful, a lot of others do not, especially the consumers that are visiting shopping malls. As customers walk through the once-very populated malls, in many locations, they are met with emptiness and a sense of “what once was.”

The New York Times reported on this notion and followed a man named Dan Bell, who visited the Owings Mills Mall in Baltimore. What he was met with surprised him, and left him with very little hope of future for the shopping mall.

“The French marble floors still gleamed under artificial light. It wasn’t quite a ruin, but it looked as if a viral outbreak had removed all life from the place.” The New York Times Reported.

Bell was so affected by this experience, that he created a segment called “Dead Mall Series” in which he captured malls across America that have very little life left in them throughout the Mid Atlantic States. These states are especially where malls have turned vacant and hollow.The series is just one example about how customers are met with feelings of uneasiness and nostalgia as shopping malls appear to be replaced with all things digital.

Although it may seem like all hope is lost, it is not. Digital transformation is designed to innovate and create new opportunity. That is exactly what malls are trying to do.

With the integration of digital components, like chatbots, and digital media screens, malls are making a comeback in the retail sector. These components are drawing in customers, both younger generations, and older generations, in order to successfully meet the needs of the on the go and digitally-centered customer that has been created in society.

As David Simon stated, retailers must be up to the challenge to face this digitally consumed world. Digital transformation is all around us, impacting our daily functions. Learning how to adapt and evolve is the key to success. Until then, we’ll meet you at the food court.


North America’s most prominent digital, marketing, technology, and business leaders from the Retail Industry are coming together October 19-20, 2017 at the Grand America Hotel in Salt Lake City, UT, for the Digital Retail Transformation Assembly. Limited sponsorship opportunities available. Download the Digital Retail Transformation Assembly Sponsorship Prospectus for more information >>

We are thrilled to announce Keynote Speaker Martine Reardon, Former CMO Macy’s and Current Founder & CEO at Reardon Consulting, and Senior Advisor, Retail & E-Commerce at NRF. Martine Reardon is best known for leading the multi-faceted world of marketing at Macy’s, from 2012 through 2016. In her role at Macy’s, she captained the company’s 1,300-person marketing organization, including advertising, creative, and brand development, social, mobile and digital media, public relations, cause marketing, media planning and consumer insights for more than 800 stores and macys.com, the sixth largest internet business in the country.

With our Digital Retail Transformation Assembly rapidly approaching, we reflect on all the digital trends that are disrupting the retail industry, as brick and mortar stores are forced to adapt to the growing technology in order to engage with customers on a personalized, on the go basis. The retail industry is shifting, in order to successfully compete with e-commerce stores, like eBay and Amazon, who are constantly engaging the online customer.

Retail is now more complex than ever. The customer has changed drastically and retailers need to learn how to connect to the on-demand customer, but also deliver a personalized experience. Malls are forced to rebrand strategies and move away from traditional tactics. Understanding the challenges that the retail industry faces are just one of the many roles that retailers have while anticipating the complex digital retail marketing environment, that is always developing.

Other speakers include Martin Barhel, Global Head of eCommerce & Retail Strategy, Facebook, and Brendan Witcher, Principal Analyst, Forrester.

Our agendas and attendee lists are for events attendees only. Apply to attend here! Already attending? Simply click the link and enter your password when requested.

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