As convenience-seeking shoppers make more of their purchases online, malls are adapting to focus more on on-site, immersive experiences rather than just on the quality and variety of retail vendors.
In an interview with PYMNTS, Jill Renslow, chief business development and marketing officer at Mall of America, said “it’s important” for shopping centers to “repurpose” retail spaces as consumers’ expectations evolve.
“When Mall of America first opened, we were about 80% retail and 20% attractions, entertainment and dining,” Renslow said. “Now, that is shifted — we’re about 65% retail and 35% dining and entertainment, and we’ll continue to shift to try to get closer to that 50/50 split because that’s where consumers want us to go. That’s where we differentiate ourselves, and that’s what’s going to set us up for the future.”
The mall’s addition of its new on-site game-show-style amusement center, Great Big Game Show, appeals to families’ demand for fun and competitive activities, and it stays novel for repeat visits, Renslow said.
“That’s what we appreciate for attractions — ones that can bring a different experience every time,” she said.
The focus on in-person experiences comes as consumers increasingly turn to digital channels to meet many of their shopping needs. For instance, the PYMNTS Intelligence report “The Replenish Economy: A Household Supply Deep Dive,” which drew from a survey of more than 2,000 U.S. consumers, revealed that 42% of retail subscribers shop in-store less often because of their subscriptions.
As such, when consumers go to malls, they want engaging experiences, Renslow said.
“Attractions and experiences really helped us compete with that in having something different than the online, eCommerce experience,” she explained.
Plus, as consumers face budgetary pressures, many are cutting back on their retail spending while continuing to splurge on experiences. Target noted this shift to discretionary spending on experiences and away from buying products on its latest earnings call, and toys giant Mattel noted the same trend in terms of how parents spend money on their children on its most recent earnings call.
Most consumers are tightening their belts when it comes to buying nice-to-have products. The February/March installment of the PYMNTS Intelligence “New Reality Check: The Paycheck-to-Paycheck Report” series drew from a survey of more than 4,200 U.S. consumers. It revealed that 60% of shoppers have cut down on nonessential retail purchases.
Renslow noted that consumers’ gifting holiday spend has shifted more toward experiences as well. To meet this overall demand for more experiences, the mall has not only been adding more entertainment vendors but also running “over 300 events a year” in its main space, such as performances with accompanying retail pop-ups.
“People have been cutting costs or watching price on different products and goods, but when you look at experiences, that’s where families especially are investing their time and money because they know that they are special, memorable, something they can do together in person,” Renslow said. “We’re seeing a lot of that happening with consumer trends, and it’s perfect because we can deliver it here.”
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