Tuesday, March 12, 2024

Quote of the Day (Kate King, on the Transformation of a Landmark Mall)

"[M]all giant Simon Property Group is spearheading a $400 million spending spree to make Southdale Center in suburban Minneapolis much more than just shopping….The Southdale overhaul reflects big shifts in how Americans are going to the mall—once an iconic place to hang out for hours and buy everything from soap to suits.”—Kate King, “A $400 Million Bet Says This Is the Mall of the Future,” The Wall Street Journal, Mar. 9-10, 2024

In a former job that required me to research and monitor the shopping center industry, I used to groan whenever I read Wall Street Journal articles about malls. So myopic was this coverage that I often doubted whether the newspaper deserved its onetime self-proclaimed image as “the daily diary of the American dream.”

As the Journal was at the top of the journalism “food chain,” influencing what stories would get covered elsewhere, an unseemly delight appeared to take hold in many instances at other metro dailies about the “death of the mall” and “the retail apocalypse.” 

I also doubt that many reporters asked if the death of malls exceeded, for instance, the death of newspapers—let alone how these publications’ advertising departments would replace the pages formerly paid for by department stores that might have vacated malls.

Certainly, large, enclosed centers were undergoing a transition that could be jarring at times. But my beef with the Journal was that, more often than not, its diagnosis of malls’ problems was simplistic.

Somehow, it usually boiled down to one factor, constantly overshadowing anything else: malls were getting clobbered by the Internet.

Then, when COVID-19 came along, the refrain changed: Nobody will ever go to malls again! Everybody’s going to sit home and order everything on their computers or smartphones.

Few if any of these articles acknowledged other reasons why malls were undergoing a sea change, such as a far more competitive physical retail environment that often featured freestanding big-box stores like Wal-Mart; the middle class that had once sustained mall department store anchors now withering, especially after the 2007-09 global financial crisis; and a long-term shift in consumer spending from goods to services.

In this regard, I read Kate King’s article on Southdale Center this weekend with measured satisfaction. 

None of the trends I mentioned were cited to explain why the “new amenities” included in Southdale (luxury apartments, an extended-stay hotel, restaurant space, fitness centers) were expected to boost the performance of this historically important mall (generally regarded as the first enclosed, climate-controlled, department-store anchored center in the country).

(BTW, this “new amenities” “trend” is not that new; malls have been experimenting with them for a decade, maybe more.)

But at least this time, a Wall Street Journal reporter managed to get through an entire article about malls without using the words “Internet” or “online sales.” There was no consideration of how correct doomsayers were about the return of people to malls, but at least there did seem to be an implicit admission that this was happening.

At some point, Ms. King or another Journal writer might ask to what extent “omnichannel retailing” (i.e., engaging consumers in multiple physical and digital touchpoints) is changing the function of malls in the post-pandemic environment; how successful other malls have been in changing their properties to a more mixed-use environment with some combination of office, hotel, apartment, and other spaces to complement retail; and why, while some malls are indeed declining or even dying, others continue to flourish.

But thankfully, readers can now better sense that malls aren’t “dead” but are changing into a type of marketplace originally envisioned by Southdale’s influential architect, Victor Gruen: a communal gathering place much like those he knew from his youth in Europe.

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