Deep Dive: The Mall Is Not Dead, Part 3 – Five Predictions for Five Years Out
We conclude our Mall Is Not Dead series by looking ahead to the future of the shopping mall in the US. Over the coming years, many malls will reshape their offerings by moving away from a focus on apparel stores clustered around department store anchors toward more diverse networks that include nonapparel retailers, leisure and entertainment tenants, event and pop-up spaces, and business service providers.
Here, we look ahead five years to 2023, and explore the impact that major changes in consumer demand and retail channels will likely have on US malls. We predict that:
- More than 1,000 department stores will probably close between 2017 and 2023, reducing total sector store numbers by one-fifth.
- Consumers will continue to grow their spending on experiences at the expense of retail purchases.We expect consumers to be redirecting an additional $78 billion to discretionary services at the expense of discretionary goods by 2023.
- Online apparel sales will more than double between 2017 and 2023. This means an additional $73 billion of apparel purchases will switch from stores to e-commerce by 2023.
- By 2023, millennials’ spending power will have grown to reflect their maturity. We estimate that US millennial households will wield more than $5 trillion in consumer spending in five years.
- Retail alternatives will also chip away at traditional channels. By 2023, US shoppers will be spending an estimated $17 billion on online meal kits, beauty and personal care subscriptions, and online apparel resale and rental.