The pandemic hollowed out most of America’s 900 or so shopping malls but for about a hundred located in upscale markets, business could hardly be better. Gen Z digital natives are discovering the fun of physical shopping, and apparel brands are discovering the power of “phygital” marketing.
In the northeast suburbs of Philadelphia, for example, Neshaminy Mall – a one million-square-foot sensation when it opened in 1968 – was so empty and decrepit in 2024 that it sold “as is” for $27.5 million and slated for demolition. The last few remaining tenants were a beauty school, a pop-up wedding venue, and a nondenominational church.
A 30-minute drive down the Pennsylvania Turnpike, in the upscale suburbs northwest of the city, the King of Prussia Mall is one of the largest and busiest in the country, with some 450 retail tenants.
Alongside names familiar to Boomers and Millennials, like Nordstrom and Neiman Marcus, are relative newcomers – emerging, teen-centric, fashion brands like Edikted, Princess Polly, and Fabletics. Brands that started out online and built big social media followings have discovered the growth potential of adding physical stores to their digital presence – a phygital approach.
“Against all odds, the mall is winning over American teens,” according to a recent Bloomberg report. “They’re getting their ears pierced; they’re buying jewelry; they’re trying on outfits that make their parents shudder.”
American shopping malls have also caught the attention of international brands eager to enter the US market. Since 2015, Primark – a Dublin, Ireland-based fast-fashion budget retailer popular in the UK and Europe– had been trying without much success to break into the US market since 2015.
In the past several years, Primark found its opening in malls in the northeast and midwest. The company – dubbed “the Costco for clothes” by fans – had opened about 30 stores by last year and has said it plans to nearly double that number by next year.
The malls that Boomers and Millennials frequented back in the day for shopping and maybe an ice cream cone or a cinnamon bun are being transformed into experience destinations with salons, spas, and fitness studios that tap into the ever growing wellness trend. Americans spend more than half a trillion dollars a year on wellness, with Gen Z and Millennials driving much of the growth, according to a recent report by McKinsey & Company.
One of the newer tenants at King of Prussia, opening next year, is Level99, a 46,000-square-foot entertainment and dining venue with more than 50 full-scale games, puzzles, and team challenges for adults. The company has three other locations at malls in New England with plans to add more than a dozen others in the future.
The mall “revival” is one of the least expected long-term outcomes of the pandemic that was thought to be killing them off as viable retail channels. Not only did e-commerce fail to supplant bricks and mortar, it made “in real life” retail essential.
Instead of dying, malls are being reinvented into social/community destinations by way of simple logic: If you want to sell look-good, feel-good merchandise, put your stores where your customers are – next to busy look-good/feel-good services.
Subscription required.
