Exchanges Welcome: The Fate of the Mall

Teens aren’t the ones riding the escalators at the mall anymore, but that doesn’t mean the industry led by Simon Property Group is going down.
Sometime this month, between trying to find a store with fitness bands in stock and picking through the stack of remaining XL sweaters in J. Crew, it might cross your mind that the mantra “malls are dead” must have been a public-relations ploy by Amazon. While malls in the so-called “urban core” neighborhoods (Indy’s once-vibrant suburbs of the ’60s and ’70s, like Lafayette Square) have rotted into bleak retail carcasses or morphed into bland outdoor shopping centers because the demographics of their neighborhoods have changed, others, like The Fashion Mall, appear to be about 90 percent occupied. When you’re standing 10-deep in line at Anthropologie waiting to buy a gift card, the only thing that will feel dead is your hope of getting a table at The Cheesecake Factory.
Last year’s holiday shopping season did disappoint retailers and mall-owners somewhat, including Indy-based Simon Property Group. In the company’s 2013 annual report, CEO David Simon wrote, “I believe we had a perfect storm (literally and figuratively) that led to anemic sales for our retailers, including a short holiday season compared to 2012, a shift to durable goods that was cyclical in nature, an increase in income taxes, and general economic and political uncertainty.” But the letdown was partly due to exceedingly high expectations—according to Simon’s annual report, shoppers had returned to malls in the first half of that year, raising projections for a big finish. This year, the National Retail Federation forecasts a 4.1 percent increase in holiday sales, and the University of Michigan said in October that consumer confidence is at a seven-year high.
Still, something is definitely different at the mall these days, and not just the unconventional operations that have found a home there—boutique car showrooms, satellite college campuses, charter schools, and newspaper offices among them. It’s the average age. On a weekend night, you have to look around and wonder: Where did all the teenage mallrats go?
When I was a high-schooler, back in the early 1990s, a dimly lit store like Abercrombie and Fitch that reeked of Drakkar Noir would have been prime kissing territory. The biggest reason we drove 35 minutes to a mall every single weekend was to meet boys. Yes, we shopped, too. Or at least browsed and swooned. I usually had the entire inventory at Express memorized—that’s how enthralling racks and racks of new clothes were, even to a bookish good girl. But when the stores closed, we didn’t go home. We’d put on our new white Keds and go upstairs to the massive arcade, which was attached to a food court and cinema. The complex opened in 1990 at Southern Indiana’s River Falls Mall, across the river from Louisville, just when I got my driver’s license. My best friend and I would play air hockey and hope cute boys from other schools noticed us. After an hour of giggly flirting, we’d get in someone’s car and go cruising. A long line of hand-me-down Pontiacs and shiny Mustang GTs crawled between River Falls and the older mall across the street, slow enough for passengers to check each other out and drivers to honk if they wanted to pull over and talk. I still remember some of those guys. Bebop, a tall, aloof Vanilla Ice type. Brian, who spoke with a kind twang and wanted to be a firefighter. The guy who loudly complimented my booty with the instantly legendary phrase “Baby got more cake than Duncan Hines!” We never drank; we never saw a joint; we didn’t even want to find a boyfriend. Flirting and kissing in the backseat was our idea of youth gone wild.

“We want them to shop, go to movies, and eat at restaurants,” says Simon’s Les Morris. “Not sure we want to promote the mall as a hangout area.”

I was relieved that times changed before my nieces and nephews, who grew up in the same area as I did, got their driver’s licenses. How foolish we were to jump into cars with older guys we’d just met, before we had cell phones. (Especially Bebop, who terrified us by turning off his headlights and racing through a series of hairpin curves behind the mall.) I’m not naive—I know teens these days would regard my era’s mall socializing as chaste an activity as my mom’s sock hops. But there are other factors keeping them from the malls, too. Gas prices are higher, for one. And with sports travel teams and increasingly difficult high-school classes, teens don’t have as much free time. It wasn’t long ago that Hoosier students with decent grades didn’t have to worry about getting accepted to a state college; that’s not the case anymore. Plus, tastes have changed. When young people do go out, they prefer Starbucks to Spencer’s.
Which isn’t to say teens don’t hit the mall at all. Their visits are down 25 percent in the last 30 years, according to the International Council of Shopping Centers, but every demographic’s are. The larger shift is cultural. The high-school set just doesn’t regard the mall as the be-all, end-all social center, where they might be discovered by a modeling agent, see Tiffany perform, flip their hair at an air-hockey table, or press their face into a bed of dull nails at Spencer’s. (Well, that was then—the store has gone a lot more Fifty Shades of Grey lately.) I doubt kids experience heart palpitations when they spot virgin mall territory from the interstate, as I used to do on road trips. They beeline to H&M and Forever 21, spend an average of $160 per month, and go home to watch Netflix and text. Don’t look for a remake of Mallrats anytime soon. “We just did a survey that said 89 percent of those in younger generations are likely to shop at the mall for the holidays,” says Simon spokesperson Les Morris, emphasizing that they still affect the bottom line. “We want them to shop, go to movies, and eat at restaurants. Not sure we want to promote the mall as a hangout area.”
It’s easy to understand why. Even this honor-roll student horsed around and did dumb things when her parents weren’t watching. I brought two escalators at Union Station to a violent halt by lifting the lid on the emergency button, for no good reason. Once (and only once), I skipped school and went to the mall, and my friend, a serious student like me, shoplifted a Metallica concert tape at Suncoast Video. One of our favorite shenanigans at River Falls was to spray adults in the parking lot with Silly String from our car and speed away in a snickering fit. The only consequence was getting followed to a stop sign once by an angry bystander who then poked me in the eye. These days, you can easily imagine much worse.
By the time the shootings involving kids near Circle Centre in 2011 and 2013 took place, malls had already begun instituting stricter policies. Some Simon centers required anyone under 18 to be accompanied by a guardian from 3 p.m. until close. It’s hard to say how strongly those rules are or were enforced, but they have left a definite impression. “Malls have chased teens away,” says Richard Feinberg, a professor of retail management at Purdue and co-author of The History of Malls. The centers aren’t moving in the direction of teen-specific hangouts, either. My old playground in River Falls is now a Bass Pro Shops. Circle Centre’s original arcade on the top level is still hanging on, but Simon—despite dubbing the younger generation “Mallennials”—hasn’t expanded amenities for teens to fill the adjacent spaces vacated by World Mardi Gras. Feinberg says mall jobs for teens have dwindled, too, going instead to adults who needed part-time work during the recession.
Feinberg advises, though, that mall operators aren’t struggling (“sales have been steadily rising”), nor are they ignoring the Millennials and their money. “Clearly they’ve tried to get H&M in every mall,” he says. Sears—which, if you haven’t heard, is hanging on by a spaghetti strap—has partnered with an Irish fast-fashion retailer called Primark to help turn its business around. The first Primark pop-up will open inside Sears in Boston late next year; no plans have yet been announced for the two Indy-area Sears stores that remain after Washington Square’s closed in the summer. “It’s even a lower price point than H&M,” Feinberg says of the import, which sells trendy separates for under 10 euros in its overseas stores.
Simon and its brethren might not be discounting Millennials’ wallets, but they don’t seem to be trying to own their hearts the same way they held my generation’s affection. David Simon told the media in October that “we’re going to experiment and do lots of things oriented around [Millennials] to make them an important consumer base,” but didn’t elaborate. Of course mall operators can’t ignore Millennials—they’re the largest generation in American history, and retailers need them to stay on pace with the Boomers’ heavy spending habits (currently, the latter group accounts for 50 percent of the country’s $3 billion in retail sales). But in 20 years, without an emotional relationship with malls, will Millennials gravitate there for entertainment and retail therapy, as the Boomers and Gen-Xers still do?
That might be a bigger threat to malls than online shopping, which the public assumes has hurt malls more than it has. Web purchases account for only 9 percent of all retail spending, according to Feinberg, and now e-commerce sites from giants (Amazon) to tiny independents (Indy’s Righno Boutique for men) are starting to open brick-and-mortar locations. Simon spokesman Morris says malls aren’t fighting e-commerce anymore; they’re finding new ways to bring the two worlds together through “click-and-mortar” shopping. One example is a new service called Deliv, which is like Uber for your mall purchases. Malls that participate in Deliv will allow customers to leave their bags at the counter while they continue to shop. For about $5, Deliv will deposit all of the shopper’s bags at home that same day, at a time designated via an app. Shoppers can also order online and choose Deliv as their shipping method for same-day delivery. Simon and a few other retail giants invested $12 million in the startup last year and began rolling out pilot programs in the fall. If it goes well, Deliv could expand to Indianapolis.
My 45-year-old friend Cathy—who calls The Fashion Mall her “Zen”—posed an interesting theory for why teens no longer need malls in their lives the same way previous generations did: because they can create their own identities online and try on different personalities. It made sense; part of my early attachment to malls—which extended to daydreaming about being locked inside one overnight, left alone to pretend the entire place was my closet—wasn’t just because they offered our only access to clothes in the pre-Internet era. They were our primary avenue to all the things—music, wardrobe, books, prom dresses—that helped us define ourselves.
Social media has replaced this essential step of adolescence. Temple professor Alison Novak, who specializes in the media’s perception of Millennials and their consumer habits, says one of the top reasons teens turn to Twitter is to share images of stuff they like in cyberspace. “We know that’s one of the ways teens use social media: replacing what would have been a physical experience with things online,” she says.
And malls face other challenges, like the dwindling number of department stores and the yawning vacancies left in their wake. Remember Lazarus? I do—it’s where I used to pine for the Esprit outfits, and where I experimented with expression in the late ’80s by talking my mom into buying me mix-and-match knitwear called Multiples, including a long-sleeved black jumpsuit cinched with a wide red cummerbund. When Macy’s bought Lazarus, the company didn’t need both stores. I don’t know where people buy Esprit anymore.
In addition to allowing newspapers like The Indianapolis Star to set up offices inside, malls have dealt with vacancies by putting more emphasis on cinemas and restaurants and turning the structure inside-out to transform it into a “lifestyle” shopping center. Stores with their own exterior entrances are typical in these environments, too. It worked on the south side of Castleton Square Mall, where the dead Lazarus space is once again bustling with an AMC theater, a Johnny Rocket’s, an Aveda salon, and a few stores. One of these days, apartments could spring up on the edges of the parking lots—or even in a vacant Sears or JCPenney. Simon has been partnering with residential developers on detached properties at some of its approximately 200 shopping centers outside of Indianapolis, and its competitors have put rentals under the mall’s roof. In a strange twist of fate, Millennials might eventually call the mall home, even if it’s not where their heart is.