How the shopping mall is transforming

“Shop today from nine to five. Dine till late.” That’s the invitation from Eastland, a shopping mall near Melbourne, Australia.

But Eastland offers more than the traditional weekly shop-and-dine experience. The shopping center also has offices, a hotel, and a bowling alley with karaoke and escape rooms.

It’s an example of how, for many new malls, mixed use is now the focal point.

“We’ve got a hotel, we’ve got council offices, we’ve got a department of transport office, we’ve got a vibrant town square full of food and beverage and entertainment,” Luke Young, QIC’s general manager for leasing said at the Malls of the Future Summit, held in Sydney, Australia, in March, where landlords, analysts and designers met to plot the way forward for retail in the wake of the pandemic.

COVID-19 and attendant measures such as lockdowns kept shoppers confined to their neighborhoods. It also accelerated a trend that’s transforming the face of retail: Hybrid working has become a permanent feature of modern-day work, which means people are spending more time at the home office and shopping locally.

“Mixed use” is being seen as the best use of assets, with speakers and participants at the Summit examining how to incorporate and build on synergies in co-working, office spaces, hotels, even childcare and medical.

Is it even a mall?

Should these even be called shopping centers or malls? Sarah Blackmore, head of asset management at Sandhurst Retail and Logistics, says they are currently in the process of deciding what to brand their latest projects, which don’t look anything like a run-of-the-mill mall.

“We’re giving customers more than shopping as a reason to visit. We’ve got things we’re designing into it like a 300-seat open-air amphitheatre within the core of the building, we’ve got an open-air courtyard, we’ve got sporting facilities around the perimeter of the precinct,” she said. “When we’re designing a building, we’re not thinking about the customers for now but our customers for the future.”

The huge growth of e-commerce during the pandemic – once thought to be the death knell of bricks-and-mortar retail – is now working to shape future retail. Woolworths general manager, property, Jon Savell said e-commerce underpins new behaviour, especially among Gen Y, where offerings like curb-side pickup gives customers more time to stroll through the stores than traipse up and down supermarket aisles.

This flexibility “is what customers really want,” Savell said. “To drive up, do their groceries, put it in the boot of the car, then they get 30 or 40 minutes back – really it’s like valet shopping and that just creates a better experience, better time management and the time they spend up and down the aisles, they can spend in your centres.”

Bringing shoppers back

Marnie Deveraux, head of retail development at Lendlease, said the challenge of attracting customers back to shopping centers was multi-faceted. There’s a need to create spaces that people want to visit, getting the tenancy mix right as well as creating experiences, ranging from sports events to fine dining.

JLL’s 2023 Retail Grocery Outlook shows that retail momentum has swung back in favor of dining out, as restaurant retail sales outpaced grocery spending in 2022.

“Everybody wants to be entertained these days,” Deveraux said. “We’re going out for dinner more than ever before – I think that’s one way to attract customers back to the center.”

Retail managers’ core purpose is to have the community visiting more often, staying longer, spending more money and feeling safe while having memorable experiences, said JLL property and asset manager Rebecca Norton, after listening to the panel.

“We need to keep asking ourselves, ‘how do we become more relevant and what are emerging needs’, such as access to mental health support besides traditional health services, large-format adventure playgrounds, a library, a swim school? How do we integrate our customers’ routines to create a legacy for the future?”

Ultimately, shopping centers aren’t about shops, said Kelvin Taylor, project director at Diadem.

“Guinness doesn’t make beer, it provides the opportunity for communication, for gatherings, for community,” he said. “If you think shopping centres are about shops, you’re wrong. People who are developing shopping centres aren’t doing a transactional activity, it’s a relational activity. It’s all about feeling and being together.”