Malls Forced to Undergo Further Transformation as They Reopen

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Not too long ago, malls were evolving formats to stay relevant and inspire a sense of community and excitement through experience. One of the truest examples was American Dream in East Rutherford, New Jersey, a 3 million-square-foot mall-meets-amusement park which had been slated to open March 19th. Now, rather the planned mix of 55 percent entertainment-related tenants and 45 percent retailers, the project will be roughly 70 percent entertainment and 30 percent retail as reported by Business Insider, making it much more amusement park than mall. The evolution begs the question, will people have the same appetite for mall environments that they once did?  

Mizuho Securities analyst Haendel St. Juste said about consumers going back to America’s malls in the story, “I think it will take a while for people to get comfortable.” 

As governors in states like Texas, Colorado, Nebraska and even New York are starting to roll out plans for staggered reopenings in the days and weeks ahead, the move appears to go hand-in-hand with a turn in sentiment by consumers, whose worry about Coronavirus seems to be abating somewhat when compared to the beginning of April.

According to longitudinal data we've been collecting on consumer sentiment around the Coronavirus since February, 82 percent of consumers we surveyed on April 20th were worried about Coronavirus, versus 87 percent on April 3, 2020. It’s a small change, but the first decrease we’ve seen since we began tracking.  Further, the impact of Coronavirus on consumer shopping behavior also ticked down slightly with 80 percent of respondents saying Coronavirus has impacted their purchase decisions somewhat or significantly versus 89 percent at the time of the last survey. The percent of consumers cutting back on spending due to Coronavirus has also leveled out, with 62 percent of respondents reporting cutbacks in spending on both April 3 and April 20.

That said, retailers, shopping centers and malls that believe consumers will line up (with six feet between them, of course) to get into stores on opening day may be sorely disappointed. Further, mall formats that have not made significant changes to ease fears of consumers who value social space highest will likely feel very dated when the doors open. Not to mention unsafe.

According to our most recent data, while the most consumers surveyed would feel safest shopping in grocery stores (54 percent) and drug store chains (50 percent), places they likely frequent for essential items already, malls were ranked lowest with only 33 percent of respondents, and department stores ranked second lowest with 37 percent, saying they would feel safe shopping in these locations.  Other retail establishments didn’t fare that much better, with less than half (45 percent) of consumers saying they would feel safe shopping at big box retailers. Only 43 percent said the same when shopping at both local small businesses and warehouse clubs. 

For malls and retailers that think handing out gloves and masks might show an act of good will, it likely won’t go far enough. The vast majority (80 percent) of respondents we asked prefer to use their own face masks and 75 percent prefer to use their own gloves rather than masks or gloves provided by the retailer when shopping in-store.

According to this piece in Forbes discussing the “new normal” in retail stores, “Physical stores will transform from experiential, social-interactive gathering centers to places of commerce and cleanliness. Social distancing is already commonplace for the U.S. population. Understanding how other countries or industries are handling the reopening process may help retailers create safe shopping environments.” The piece also discusses protocols being used in China including wearing face masks and temperature scanning before a shopper enters a store or mall.  The piece also cites the importance of home delivery.

 The malls opening first seem to have safety in mind, but whether they go far enough remains to be seen. Nebraska Crossing Mall is promising to unveil newly remodeled restaurants and outdoor spaces while detailing measures to protect employees and customers when it opens today. In Texas, Gov. Greg Abbott issued orders last week that allow retail shops to sell items curbside as a “retail to go” strategy, and require employees to wear masks and deliver packages to the customer’s trunk or back seat, with designated outside areas for pickup.

One thing is for sure, as retail visits expand past essential retail like grocery and drug stores, other retailers, and malls in particular, need to be thinking of ways to inspire a sense of safety for consumers, and they will need to go beyond offering gloves and masks at the door.  Malls must once again be reimagined, with understanding the new needs and expectations of consumers once again at the center.

mall  future of retail  retail insights  Retail Digital Transformation  Coronavirus  COVID-19  Consumer Survey  shopping mall