The future of shopping malls and retail
Philippe S.
Senior leader, Advisor and connector in #AI #Web3.0 #Spatial web #IoT # Smartcities #mobility #Digital Twins #cognitive computing #AI Governance and regulation
As brick-and-mortar retailers struggle to increase their online presence while profitability dwindles, regional shopping malls are finding it extremely hard to fill empty spaces and replace anchor stores.
The health of shopping malls is closely tied to the health of the retail industry, which faces multiple problems, including the rise of e-commerce, store closings, declining pedestrian traffic, changes in consumption patterns and weaker consumer incomes. While these pressures are not new, their combination is intensifying the pressure on retailers, which in turn affects mall owners.
There are over 1,100 malls and 40,000 shopping centres in the US alone where China’s largest mall covers over 7 million square feet and is larger than the Pentagon. That’s a lot of real estate to keep profitable and with substantial equity and debt capital invested in retail real estate, investors have to wonder, are regional shopping malls the next troubled asset class?
Westfield shopping center group offers what potentially can be the last hope for the Malls of the future: a vision of developing an upgraded experience economy that might mean that today's malls have a chance of staying in business.
The group’s ten-year vision for the future of retail - “Destination 2028” - is full of hanging sensory gardens, smart changing rooms, and mindfulness workshops. Westfield’s proposed shopping center will be a “hyper-connected micro-city” with an incredible amount of personalisation. Smart bathrooms will provide individually customised nutrition and hydration tips; eye scanners and AI can personalise and orient traffic based on prior purchases; and magic mirrors will offer virtual reflections of you wearing an entire range of new products.
Westfield’s “Destination 2028” aims combine entertainment, wellness, learning, and personalised product-matching, —and they’re betting that this is worth the inconvenience of leaving home to do your shopping.
It’s a big bet – it’s a bold bet, but if successful, retail will become a convergent industry, where time spent at the mall pays multiple dividends. Shopping becomes healthcare becomes entertainment becomes education etc.
One thing seems sure enough – Shopping malls will not be the same business ever again!