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

Summary

Behind the Numbers: Reimagining Retail Podcast Summary

Episode Title: Reimagining Retail: Malls — Why People Visit (or Skip), IKEA & Walmart's Big Moves, and What the Modern Mall Will Look Like
Release Date: March 12, 2025
Host: Sara Lebo
Guests: Rachel Wolf, Emmy Lederman
Podcast: Behind the Numbers by EMARKETER

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Introduction

In the March 12, 2025 episode of Reimagining Retail, host Sara Lebo delves into the evolving landscape of modern malls. Joining her are seasoned EMARKETER analysts Rachel Wolf and Emmy Lederman, who explore the shifting dynamics of retail spaces, the struggles and successes of mall-based stores, and the innovative strategies companies like IKEA and Walmart are employing to reinvent the shopping experience.

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The State of Mall Retail

Sara Lebo opens the discussion by highlighting the recent closure of Forever 21 stores, a development that underscores the broader challenges faced by mall retailers. However, not all mall-based brands are faltering. Rachel Wolf attributes the resilience of stores like Abercrombie & Fitch and Gap to their strategic shifts away from traditional mall dependencies.

Rachel Wolf [01:22]: "The ones that are doing better, not relying on malls like Abercrombie you mentioned... have leaned off mall and also opened smaller stores, getting closer to where their customers are."

Emmy Lederman adds that Forever 21's lack of a viral product and its identity crisis have hindered its growth, especially compared to more adaptive brands.

Emmy Lederman [02:05]: "Forever 21 is just one of those stores that's always been, like, tacked on to a visit to the mall... but don't really have much besides just being like a placeholder in the mall."

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Mall Foot Traffic and Consumer Behavior

The conversation shifts to the current performance of malls. Rachel Wolf notes a positive trend with indoor mall visits increasing by 5.5% in January, signaling a potential resurgence.

Rachel Wolf [03:38]: "Maybe that's a sign that shoppers are choosing to go to malls more often."

However, Emmy Lederman points out that the decline of anchor stores and the rise of online socializing have transformed malls from shopping destinations to social hubs.

Emmy Lederman [04:15]: "Just going to the mall as a social activity simply to shop... is redundant now with so much social shopping."

Rachel Wolf highlights that modern mall visits are less about shopping and more about socializing and experiences, with 60% of Gen Zers visiting malls primarily to socialize.

Rachel Wolf [05:11]: "A lot of people are going to malls, but they're not necessarily going there to shop... Those are becoming the hot new thing in malls these days."

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The Shift to Experiential Retail

Sara Lebo and her guests discuss the rise of experiential elements in malls, such as VR experiences and unique dining options, which contribute to longer dwell times. Sara mentions that indoor malls saw an average visit duration of 78 minutes during the holiday season.

Sara Lebo [05:40]: "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."

Restaurants have become significant attractions, with 17 of the most popular mall brands being eateries. Rachel Wolf observes a shift towards trendy and healthy dining options like Starbucks and bubble tea cafes.

Rachel Wolf [06:14]: "People are more interested to go to Starbucks or even like a bubble tea cafe. Like that's the hot new thing in malls these days."

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Major Retailers Buying Malls

A pivotal part of the discussion centers on major retailers like Walmart and IKEA purchasing malls to transform them into mixed-use spaces. Rachel Wolf explains Walmart's strategy of integrating retail, entertainment, dining, residences, and office spaces to create a self-sustaining community hub.

Rachel Wolf [08:14]: "They're redeveloping it essentially into a mixed-use site... combining retail, entertainment, dining, but also having residences in there and hospitality concepts and office space."

IKEA, on the other hand, is using mall acquisitions to become anchor tenants while incorporating experiential elements like food halls and children's play areas.

Rachel Wolf [09:23]: "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."

Emmy Lederman suggests that while this trend might not be widespread due to the capital required, it represents a creative way for brands to engage consumers in a post-COVID world where suburban living demands integrated lifestyle experiences.

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The Future of Malls

As the episode wraps up, Sara solicits predictions for the future of malls. Both analysts foresee malls evolving into multifunctional spaces that prioritize health, wellness, and personalized experiences.

Rachel Wolf [14:12]: "The way that they've been able to really mash those experiences with retail to get people through the doors has been really effective."

Emmy Lederman emphasizes the importance of integrating healthier food options and leveraging direct-to-consumer brands to fulfill practical needs while enhancing the overall mall experience.

Emmy Lederman [14:44]: "Figuring out, like, what does consumer need in person look like now versus when malls were at their heyday and how can you create that experience?"

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Conclusion

The episode concludes with Sara acknowledging the innovative approaches being taken to revitalize malls, from experiential activations to strategic real estate acquisitions by retail giants. The insights provided by Rachel Wolf and Emmy Lederman offer a comprehensive look into how malls are transforming to remain relevant in an increasingly digital and experience-driven marketplace.

Sara Lebo hints at future discussions and encourages listeners to stay tuned for upcoming episodes that continue to explore the intersection of retail and modern consumer behavior.

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Notable Quotes:

• Rachel Wolf [01:22]: "The ones that are doing better... have leaned off mall and also opened smaller stores, getting closer to where their customers are."
• Emmy Lederman [02:05]: "Forever 21 is just one of those stores that's always been... a placeholder in the mall."
• Rachel Wolf [05:11]: "A lot of people are going to malls... [to] go to a restaurant or maybe a VR experience."
• Sara Lebo [05:40]: "Higher dwell times... people might be spending more time not just in those anchor stores, but also in other places in the mall."
• Rachel Wolf [08:14]: "They're redeveloping it essentially into a mixed-use site... combining retail, entertainment, dining, but also having residences in there and hospitality concepts and office space."
• Emmy Lederman [14:44]: "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?"

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Transcript

[Sara Lebo]

Hello, listeners. Today is Wednesday, March 12th. Welcome to Reimagining Retail, an E Marketer podcast. This is the show where we talk about how retail collides with every part of our lives. I'm your host, Sara Lebo. Today's episode topic is the modern mall. 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 Wolf. Hey, Rachel.

[Rachel Wolf]

Hey, Sarah. How's it going?

[Sara Lebo]

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

[Rachel Wolf]

Hi.

[Emmy Lederman]

Thanks so much for having me.

[Sara Lebo]

Yeah. Welcome to the pod. Okay, let's jump into how we landed on malls in the year 2025. It's. 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 Wolf]

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, you know, opening smaller stores, getting closer to where their customers are. And, you know, 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 Lebo]

Yeah. 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 Lederman]

Yes. And I think with the Abercrombie example, specifically, Abercrombie has been known in recent years for becoming more inclusive and just like, having genes 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, like, 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, like, tacked on to a visit to the mall where your friend group is like, why not just like Humor Forever 21 and do a lap around their store, um, but don't really have much besides just being like a placeholder in the mall. I don't know if that's too harsh, but that's just how I feel.

[Rachel Wolf]

Yeah, I agree. I mean, I think that Forever 21, it's not cheap enough to compete with Shein and it's not, you know, like high quality or, you know, 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, like, that's not a winning strategy.

[Sara Lebo]

Yeah, this is like the. What do we talk about when we talk about fast fashion? There's like different layers of it. You have slower fast fashion. Maybe you have higher end fast fashion, which is H and M. And Zara, you have faster, cheaper fast fashion, which is Shein and Teemu. 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 like the mall itself. How are malls doing on the whole?

[Rachel Wolf]

I think it's mixed. You know, 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%. Same 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, but I think in general, you know, 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 Lederman]

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 go to the mall to like go to the movies. And because a lot of those businesses are struggling to. The mall is kind of suffering with that. And I think also just this idea of social shopping becoming so popular, like back in the day before people really bought clothes online and like sent them to their friends. Going to the mall with friends was like 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 some of that, 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 like leverage the opinions of your friends, I think is redundant now with so much social shopping.

[Rachel Wolf]

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. Right. Like a lot of people are going to malls, but they're not necessarily going there to shop. They're going there to, to go to a restaurant or you know, maybe there's a new it' like the VR experiences, they open up. Those are becoming a lot more popular. So I think the role of the mall is also shifting.

[Sara Lebo]

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 Suzie, 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 Wolf]

This Yelp report found that 17 of the most popular mall brands these days are actually restaurants. Right. So like Macy's is still up there, but people are more interested to go to Starbucks or even like a bubble tea cafe. Like 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 Lebo]

Yeah. And even those kinds of restaurants are kind of changing, changing. Emmy 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 Lederman]

I agree. I feel like the fact that a lot of these, I guess, mid level like 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 like sitting down and dining? It may be like having a Sweet green. That's the only sweet green in the proximity of a certain town. But I also feel like it's a lot of those just like practical outings where you go because like 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 Lebo]

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 the going to the Apple Store, going to the Genius Bar, that's an experience that that mall offers. And the things that are around that like Genius store are the places that might get more traffic. Like 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 a 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 Wolf]

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. Right. Like if you live there, then you're going to shop there and you know, like you're also gonna 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 Lebo]

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

[Rachel Wolf]

Modern day company town.

[Sara Lebo]

Well, it almost makes sense when you think about like post Covid migration patterns. You have people moving out of cities into suburbs. Those people still want city like experiences, which means l 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 Wolf]

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, like things that you have to go to 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 like insert your brand into multiple different areas.

[Sara Lebo]

Yeah, I don't know that this is something we're going to see other brands do as much of buying a mall because 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 eight 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, they won't necessarily start visiting the mall because you put a store that people are excited about in there.

[Emmy Lederman]

I think it's kind of just a conversation about maybe the mall was the most convenient option. Like before it was so easy to shop online, but it's never going to be the most convenient option option now. Like 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 like 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 like a personal stylist and someone that can really help you and give you like a curated experience. So I wonder how much of that could actually be carried over to the business model of a mall. You know, 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 Wolf]

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

[Sara Lebo]

Will the Jonas Brothers be there? New Jersey Legends?

[Rachel Wolf]

Yes, they will be there.

[Sara Lebo]

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

[Emmy Lederman]

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

[Sara Lebo]

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

[Emmy Lederman]

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

[Sara Lebo]

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 like things that are online that Gen Z likes that they might want replicated irl. And so now instead of talking about replicated, replicating the in store experience online, we're talking about replicating the online experience in a mall. But I, I could see the draw there, definitely.

[Emmy Lederman]

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 get, you know, order something and have to return it, which we all hate doing. I think just like there are some really creative ways, maybe not even that, but creative ways to like 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 Lebo]

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 is 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 Wolf]

So I mentioned American Dream already, so I'll just, you know, 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 got had an 11% increase in foot traffic last year. So whatever it is they're doing is really working.

[Emmy Lederman]

I can really see a change in, I think, the food options around a mall. We were talking a little bit about these, these bigger chain restaurants failing and for example, sweetgreen may be coming into the mall. And I think in addition to that, also having healthier options at malls because younger, younger consumers are really concerned about, about health and wellness. And then also I think having some of these, like D to C, 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 xyz or I might as well just roam a little bit. So figuring out, like, what is, what does consumer need in person look like now versus when malls were at their heyday and how can you create that experience?

[Sara Lebo]

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

[Rachel Wolf]

Thanks for having me.

[Sara Lebo]

Thank you, Emmy. Congrats on your debut.

[Rachel Wolf]

Thanks.

[Emmy Lederman]

Thank you for having me. Very excited to be here.

[Sara Lebo]

Enjoy Jonas. Com.

[Emmy Lederman]

Jonas Brothers event. Yes.

[Sara Lebo]

Thank you to our listeners and to our team that edits the podcast. They edit the mall. We'll be back next Wednesday with another episode of Reimagining Retail, an emarketer podcast. And on Friday, join Marcus for the behind the Numbers show.