Reimagining Retail: Malls — Why People Visit (or Skip), IKEA & Walmart's Big Moves, and What the Modern Mall Will Look Like

Audio by Sara Lebow, Rachel Wolff, and Emmy Liederman | Mar 12, 2025

Episode Transcript:

Sara Lebow (00:03):

Hello, listeners. Today is Wednesday, March 12th. Welcome to Reimagining Retail, an EMARKETER podcast. This is the show where we talk about how retail collides with every part of our lives. I'm your host, Sara Lebow. Today's episode topic is the Modern Mall.

(00:24):

Before we head to the mall, let's meet today's guests. Joining me for today's episode. We have two of our analysts. First up, it's podcast regular Rachel Wolff. Hey, Rachel.

Rachel Wolff (00:35):

Hey, Sara. How's it going?

Sara Lebow (00:36):

Good. Also joining us on the podcast today for her inaugural podcast, we have another one of our analysts, Emmy Liederman. Hey, Emmy.

Emmy Liederman (00:45):

Hi. Thanks so much for having me.

Sara Lebow (00:47):

Yeah, welcome to the pod. Okay, let's jump into how we landed on malls in the year 2025. It started with the news that Forever 21 is closing a bunch of its stores. That is kind of unsurprising. Forever 21 has struggled for a while and mall stores in general have been struggling, but some stores that I think of as mall stores, for example, Abercrombie and Fitch are still doing well. So I'm going to kick this off with an existential question, Rachel, why are some mall stores doing better than others?

Rachel Wolff (01:23):

Honestly, I think it comes down to the ones that are doing better, not relying on malls like Abercrombie, you mentioned, also the Gap, I would say is another one that's doing really well. Both of those companies have sort of leaned off mall and also opening smaller stores, getting closer to where their customers are. And there have been strong execution from both of them on just their ability to keep up with social media trends and really give shoppers what they're asking for both in store and online.

Sara Lebow (01:53):

And I don't think it's just the mall that is hurting Forever 21. I feel like they just haven't been able to really grow. Emmy, you said something really telling earlier, which was that Forever 21's never really had a viral product.

Emmy Liederman (02:05):

Yes, and I think with the Abercrombie example specifically, Abercrombie has been known in recent years for becoming more inclusive and just having jeans that are kind of universally a solid product for everybody. And I think a lot of fast fashion brands have also been able to leverage that. And Gap is a great example because they've done a lot of social first content and they did a campaign with Troye Sivan and are just very much in the culture. And I feel like Forever 21 is just one of those stores that's always been tacked on to a visit to the mall where your friend group is like, "Why not?" Just humor Forever 21 and do a lap around their store, but don't really have much besides just being a placeholder in the mall. I don't know if that's too harsh, but that's just how I feel.

Rachel Wolff (02:52):

Yeah, I agree. I mean, I think that Forever 21, it's not cheap enough to compete with SHEIN and it's not high quality or fashionable enough or whatever word you want to use to compete with the likes of Zara. So it really just hasn't been able to carve out this niche and it keeps tying itself to malls even as it becomes clear that that's not a winning strategy.

Sara Lebow (03:12):

This is the, what do we talk about when we talk about fast fashion? There's different layers of it. You have slower fast fashion maybe, you have higher end fast fashion, which is H&M and Zara. You have faster, cheaper, fast fashion, which is SHEIN and Temu, and then you have Forever 21 kind of having an identity crisis in the middle. But before we go too, too deep on Forever 21, let's back up to the mall itself. How are malls doing on the whole?

Rachel Wolff (03:39):

I think it's mixed. Malls always do well during the holiday season, and we saw that this year. So far in January it seems like visits are up. Placer data has indoor mall visits up 5.5%, similar numbers for open air shopping centers and outlet malls, which is interesting given that January is typically a slower month following the holidays. So maybe that's a sign that shoppers are choosing to go to malls more often. But I think in general, they're trying to figure out how do you appeal to shoppers when you don't have, let's say, your anchor department store there anymore.

Emmy Liederman (04:15):

Yeah, and I think to add to that, there's typically an anchor department store or a Cheesecake Factory I know is typically something that is like, maybe you'll go to the mall for that reason or you'll go to the mall to go to the movies. And because a lot of those businesses are struggling too, the mall is kind of suffering with that. And I think also just this idea of social shopping becoming so popular. Back in the day before people really bought clothes online and sent them to their friends, going to the mall with friends was a social activity of, "I want to buy these things and see if I can get approval from the people that I'm with." But now because so much of that comes from influencer marketing and comes from kind of following your favorite creators, just going to the mall as a social activity simply to shop and leverage the opinions of your friends, I think is redundant now with so much social shopping.

Rachel Wolff (05:11):

Well, it's interesting because I was reading the stat that was 60% of Gen Zers visit malls to socialize, and this is like a 2023 survey, so it's not the most recent, but I still thought that was pretty notable. A lot of people are going to malls, but they're not necessarily going there to shop. They're going there to go to a restaurant or maybe there's a new, it's like the VR experiences that they open up. Those are becoming a lot more popular. So I think the role of the mall is also shifting.

Sara Lebow (05:40):

Yeah, there's some Placer data that also shows this, dwell time was up in malls over the holiday season. That's not really surprising, but it was up to about 78 minutes per visit in indoor malls. Higher dwell times to me, I think means that people might be spending more time not just in those anchor stores, but also in other places in the mall, just like you were talking about. So while we see places like, sorry to Suzy who's not on this podcast, Macy's maybe struggle a little more, there are stores that people are going to the mall to visit that maybe aren't those anchor stores

Rachel Wolff (06:14):

This Yelp report found that 17 of the most popular mall brands these days are actually restaurants. So Macy's is still up there, but people are more interested to go to Starbucks or even a bubble tea cafe. That's the hot new thing in malls these days. But that's really becoming the draw as opposed to going to a department store.

Sara Lebow (06:33):

Yeah, and even those kinds of restaurants are kind of changing. Emmy, you mentioned the Cheesecake Factory, but I think it's more common to go to places that are less traditional restaurants at malls as well. A place like a sweetgreen that might offer bowls and healthier options, although I'm sure there are healthy options somewhere on the massive Cheesecake Factory menu.

Emmy Liederman (06:50):

I agree. I feel like the fact that a lot of these, I guess mid-level chain restaurants like the Cheesecake Factory and maybe Red Lobster, all of those types of restaurants are struggling and it's kind of an opportunity for malls to say, "Okay, what is something that can really attract customers that isn't sitting down and dining?" It may be having a sweetgreen that's the only sweetgreen in the proximity of a certain town, but I also feel like it's a lot of those just practical outings where you go because your iPad is broken and you need to hang out in the Apple Store while they fix it. This sounds like it's a personal experience I've had, but I just feel like it's a thing.

Sara Lebow (07:33):

I've definitely had that experience. I think that's such a good point. What draws people to malls? And I think that that brings us back to experiential. Even going to the Apple Store, going to the Genius Bar, that's an experience that mall offers and the things that are around that Genius store are the places that might get more traffic. It might be good to be near the Apple Store because that's where I'm headed while they're fixing my iPad. I think that brings us to something new, at least new to me that's happening in malls, which is companies are buying malls. Walmart bought a mall, IKEA bought mall. Why are companies buying malls? What are they doing with them and is this a trend we're going to see happening across retail?

Rachel Wolff (08:14):

I'm going to start with Walmart just because I think that one is super interesting. So they bought this site, I think it's in Pennsylvania, and they're redeveloping it essentially into a mixed use site. So we've seen this a lot with malls, but basically combining retail, entertainment, dining, but also having residences in there and hospitality concepts and office space, which sort of makes sense. If you live there, then you're going to shop there too and you're also going to eat there and possibly work in the same space. So I think it makes sense in terms of a strategy for a mall, I don't know if it necessarily makes sense for Walmart to be the one to implement the strategy.

Sara Lebow (08:52):

Yeah, leaving my Walmart apartment to go to my Walmart grocery store to work at my Walmart job.

Rachel Wolff (08:59):

The modern day company town.

Sara Lebow (09:00):

Well, it almost makes sense when you think about post-COVID migration patterns. You have people moving out of cities into suburbs. Those people still want city-like experiences, which means living near where you work or even if you're not going so far as to live inside of the mall, at least going to the mall is something that almost replicates a city experience.

Rachel Wolff (09:23):

Yeah, and on the IKEA side, their strategy is a little different. I mean, we don't know with Walmart if they're going to actually be in the mall or if they're just developing it, but for IKEA, their strategy is they buy a mall and then they become the anchor tenant. And then on top of that, they layer in other experiential things like food hall or children's play area. Again, things that you have to go to in person and it makes sense for IKEA, because they do need a lot of space to expand and this is an opportunity to insert your brand into multiple different areas.

Sara Lebow (09:53):

I don't know that this is something we're going to see other brands do as much of buying a mall. I don't know many other brands that have the capital to buy a mall other than maybe an Amazon. I do think we'll see brands being more creative with malls though. I mean, you have A-tier malls doing really well right now. You have B-tier malls doing less well. I think that's an opportunity for brands to maybe move into that real estate and become the quality store the store worth going to in that area. On the other hand, that's a huge risk if people aren't visiting the mall, that won't necessarily start visiting the mall because you put a store that people are excited about in there.

Emmy Liederman (10:31):

I think it's just a conversation about maybe the mall was the most convenient option before it was so easy to shop online, but it's never going to be the most convenient option now. It's just totally off the table. So if it can't be the most convenient option, it has to be a fun option and it has to be a social space and it has to offer something that shopping online doesn't. Something that's gone viral I would say recently, and something that I think is a leg up for department stores is this idea of having a personal stylist and someone that can really help you and give you a curated experience. So I wonder how much of that could actually be carried over to the business model of a mall. Maybe you get that heightened customer service and just more of a personalized experience and that's what actually gets you out of the house.

Rachel Wolff (11:21):

Yeah, I think that's a really great point. And I think a lot of malls are trying to generate the kind of excitement and the need to actually go with these limited time activations either with brands. There was one with Skims, I forget where it was that did really well and there's one I was looking at American Dream and they have a JONASCON, which for those who don't know is a 20 year anniversary of the Jonas Brothers, like one big festival. And so that's their way of getting people to go to the American Dream Mall, which if you're a-

Sara Lebow (11:53):

Will the Jonas Brothers be there? New Jersey legends.

Rachel Wolff (11:57):

Yes, they will be there.

Sara Lebow (11:58):

Wow. New Jersey legends in a New Jersey legend of a mall.

Emmy Liederman (12:01):

Do you have a date and time on that event by any chance?

Sara Lebow (12:06):

If anyone wants to meet Emmy, she'll be at JONASCON.

Emmy Liederman (12:08):

Yes, exactly. That's why I'm clearing it up for every listener that wants to meet me there.

Sara Lebow (12:13):

I mean, that's obviously a good way to draw in Gen Z. And Emmy, you mentioned that Gen Z might not necessarily need to go to malls because they can do the same sort of socializing online. I think there's a flip side of that where the things that a mall offers, which are products that are available to you and community to shop for those products beside, those are sort of things that are online that Gen Z likes that they might want replicated IRL. And so now instead of talking about replicating the in-store experience online, we're talking about replicating the online experience in a mall. But I could see the draw there.

Emmy Liederman (12:52):

Definitely. To add to that, I think the buying something online and picking it up in store is a combination of an e-commerce and an in-person activation. And I feel like that's something that brands can really leverage for consumers that are younger and still want those in-store experiences and still want to be able to try something and talk to a human being before having to order something and have to return it, which we all hate doing. I think just there are some really creative ways, maybe not even that, but creative ways to gamify the combination of shopping in-store and shopping online that maybe people just need that additional push to be able to get to the mall.

Sara Lebow (13:36):

Yeah. Some of our mall pushes that we've mentioned just to recap, are leveraging buying online and pickup in-store for bringing people into malls, leveraging experiences, particularly limited time experiences to bring people into malls or thinking beyond anchor stores to what stores are in the middle of the mall, what stores are available in B-tier malls. And also thinking of places like maybe the Apple Store as something that's more like an anchor that you can be near. Before we close off, I'm curious about what you guys see as the future of malls. What do you see as the successful version of the mall?

Rachel Wolff (14:12):

So I mentioned American Dream already, so I'll just go with that. And first, this is not to say that every mall can replicate what American Dream is because not every mall can have an indoor ski slope or a theme park or a water park or any of those things, but I think that the way that they've been able to really mash those experiences with retail to get people through the doors has been really effective. They are actually doing well as far as malls are concerned. They had an 11% increase in foot traffic last year. So whatever it is they're doing is really working.

Emmy Liederman (14:44):

I can really see a change in, I think the food options around a mall. We were talking a little bit about these bigger chain restaurants failing and for example, sweetgreen maybe coming into the mall. And I think in addition to that, also having healthier options at malls because younger consumers are really concerned about health and wellness. And then also I think having some of these D2C, very much e-commerce centric brands like Warby Parker for example, having that at the mall so people go there to really fulfill some type of practical need and then they're like, "Okay, I'm here. I might as well do X, Y, Z, or I might as well just roam a little bit." So figuring out what does consumer need in person look like now versus when malls were at their heyday, and how can you create that experience?

Sara Lebow (15:35):

Okay. Well, that is all we have time for today. Thank you for being here, Rachel.

Rachel Wolff (15:39):

Thanks for having me.

Sara Lebow (15:40):

Thank you, Emmy. Congrats on your debut.

Emmy Liederman (15:42):

Thank you for having me. Very excited for the-

Sara Lebow (15:42):

Enjoy JONASCON.

Emmy Liederman (15:44):

Jonas Brothers event, yes.

Sara Lebow (15:47):

Thank you to our listeners and to our team that edits the podcast, they edit them all. We'll be back next Wednesday with another episode of Reimagining Retail and EMARKETER podcast. And on Friday, join Marcus for the Behind the Numbers show.