Bye-Bye, Megamalls

The history of town squares as public gathering spaces is a long one, from Trafalgar Square in London to Times Square in New York. In rural areas, though, the space that typically serves as a town square has shifted dramatically in the past hundred years, from the robust downtowns of the early 20th century to the shopping malls of the 1950s to, today, something different still.

There was a time, Vistacor president Jim Carr says, when people went to their local mall to see and be seen. Now, though, even if people do leave their homes to go shopping, it isn’t to see anyone. Today’s 20-year-olds sit in gathering spaces and never look up from their phones. The social dynamic has changed, and so has the public meeting place.

“People care what your Facebook pictures and posts look like, not what you’re wearing or taking with you when you go somewhere in person,” Carr says. “That culture has changed how people treat places.”

This shift hasn’t gone unnoticed, either. According to CBS News, “It used to be when a sign at the mall said ‘EVERYTHING MUST GO,’ it meant a particular store was going out of business. These days it could very likely mean the entire mall is shutting down.” An entire website, Deadmalls.com, is dedicated to tracking closed malls across the country. And, as reported by the New Yorker, CEO Rick Caruso of retail developer Caruso Affiliated told the National Retail Federation, “Within 10 to 15 years, the typical US mall, unless it is completely reinvented, will be a historical anachronism—a 60-year aberration that no longer meets the public’s needs, the retailers’ needs, or the community’s needs.”

Hidden within that fatalistic quote, though, is opportunity. Development companies such as Vistacor have latched on to a single line from the quote—“unless it is completely reinvented …”—and taking it up as their goal, they are completely reimagining major retail spaces such as the former Williamsburg Outlet Mall in Virginia. Vistacor tore down the 230,000-square-foot enclosed mall and is planning to reuse its land for the Lightfoot Marketplace, a 130,000-square-foot open-air shopping center anchored by a Harris Teeter grocery store and a Walgreens pharmacy.

“We’re changing the whole purpose of the shopping center,” Carr says. “Before, it was about buying luxuries. Now, it’s a necessities-based business, things you need to run your home and life.”

When the Williamsburg Outlet Mall was built in 1982, the enclosed-mall format was already dwindling in popularity from its heyday in the 1960s. Additions to the mall were built in the late 1980s, but the building always had a turnover problem with tenants, and it changed ownership several times. “It must’ve been, at the beginning, doing well,” Carr admits. “But the good fortune didn’t last very long.” When Vistacor finally bought the property, it was the land beneath it that determined the price, not the mall structure.

The new shopping center, Carr says, will avoid the model that caused Williamsburg to limp through each quarter for the past 20 years or so, and its change in function will make it a valuable stop for area residents. Practical considerations are of paramount importance to Carr and Vistacor, including a centralized parking area that will sit surrounded by the stores so that shoppers can park once and reach any store they need—unlike in the maze of the enclosed mall. “We’re trying to land everyone in one centralized spot so [that] they can do everything they need in one trip,” Carr says. “It’s much more convenience-oriented than the old model.”

Carr says there are several factors that have contributed to the closures of malls across the country, but the answer that usually springs to mind isn’t the right one. Many assume that Internet shopping has taken over the retail sector, and though that might prove to be true in the future, it hasn’t yet. Internet sales still account for only about eight percent of the total retail market, and though the sector’s growth has been steady over the past few years, it has also been slow. What is more critical to the longevity of malls is the culture that has pervaded the modern society of Internet users: people don’t like to leave their homes as much as they used to.

“Shopping is not an experience that people particularly like,” Carr says. “Research on shopper activity and motivation has proven this. People generally want to get in and get out, and that was true before online shopping. The Internet is such a simpler solution.”

Energy cost is also one of the major—and often overlooked—factors that have caused enclosed malls to go out of vogue, Carr says. The cost to heat or cool a giant structure is astronomical, especially compared to the cost of heating and cooling individual units in a strip mall. That cost is then passed on to the retailers leasing the space, so it’s no wonder that tenants prefer to lease shops in open-air structures.

What is crucial for Vistacor and other developers to remember, Carr says, is that the idea of a public gathering space is overrated, and it doesn’t belong to malls anymore. That space is found on the Internet. The other myth that pervades the shopping center industry, he adds, is that shopping needs to be entertaining, and that’s just no longer true. Today, malls need to be convenient.

“For many, Facebook is entertaining; shopping is an inconvenience,” Carr says. The counterargument he hears most often is that women like to comparison-shop for clothing and other goods that require fitting, but Carr says this isn’t true, either. Research shows that women will make online purchases from retailers they trust, and the biggest factor in their choice is how much time they can save.

“Our reuse of this property has more value than the existing mall, and our reuse was to tear it down,” Carr says. “I think that says a lot about what’s happening to the mall format.”