Malls were all the rage in the 1980s and 1990s. Almost every movie and TV show with at least one teenager depicted the quintessential mall experience. But with the rise of online shopping and Millennials’ thirst for fewer products and more experiences, the best days of malls seem to be behind them.
Millennial consumers — who are expected to account for about 30% of all retail sales in 2020 — prefer personalisation rather than generalisation. High-touch shopping experiences in intimate environments are more engaging to Millennials than the glossy, mass-appeal tactics that entice older demographics.
Add in the possibility that 20% to 25% of U.S. malls will close within five years as more department chains shutter their physical locations, and one thing becomes clear: Malls, as we once knew them, need to be reimagined to engage experience-hungry consumers.
Luckily, shopping malls in China have already pivoted their layouts toward experience-focused offerings. For those interested in what the future of shopping malls will look like, that’s as good a place as any to start.
The Evolution of Shopping Malls
Shopping mall trends dictate that experiences should come first.
When Millennials do want a mall-type experience, they would rather go to a mixed-use space of a “village lifestyle center.” These are public areas with shopping, restaurants, bakeries, cafés, and living and office spaces situated above them.
Similarly, Chinese malls put experiences first. They combine food, entertainment, exercise, and sports while making retail a distant priority. The China-based Alibaba Group’s “More Mall” concept features unmanned registers and mobile payments, but it’s about more than technology. When people visit malls, they don’t just want to buy something — they want to be a part of something.
Chinese malls include karaoke lounges, ice rinks, spas, and other amenities. Proprietors have embraced these new trends in shopping malls in an attempt to entice additional demographics to spend the day at one. Aging populations crave safe spaces to walk, and increased urbanisation means younger generations need public spaces for socialisation.
The future of shopping malls lies in popularising these combined spaces. For entrepreneurs looking to carve out a spot in one of those spaces with an innovative offering, a location-based virtual reality experience is a particularly appealing option.
More than 8,200 stores have or will close in 2019. Location-based virtual reality can slot right into those vacancies to provide spacious, experiential offerings for mall visitors. There’s a genuine interest in virtual reality, but there are still numerous barriers to home adoption.
Location-based VR centers will encourage consumers to go to the mall and experience the full scope of the technology’s capabilities.
Chinese malls are more like theme parts for adults, which is exactly what we need in the U.S. To prepare, modern retail experience centers must be rebuilt accordingly. For example, companies must support consumer desires for selfie opportunities, transfer digital experiences from the mall to social media platforms for continued participation, and encourage active engagement among guests.
Make no mistake: Location-based virtual reality in malls will be a land grab thanks to mall trends. Franchise owners with the right partnerships and capital will quickly snatch up real estate in the most profitable markets. The evolution of shopping malls means “shopping” will no longer be the primary focus — experiences are the key.
What kind of experiences do you want to create? Become a franchisee today to help shape how we enjoy malls now and into the future.