What: American malls evolve from 1950s shopping destinations to modern experiential centers, with premium locations thriving despite e-commerce competition through strategic repositioning and youth engagement.

Why it is important: This evolution highlights how market constraints and strategic adaptation are creating a sustainable future for physical retail, challenging previous assumptions about e-commerce's impact.

The American mall landscape has transformed dramatically since the opening of the first enclosed mall in Minnesota in 1956. While only 900 malls remain operational today, compared to thousands in their heyday, premium locations are showing remarkable resilience. Major mall operators like Simon Property Group and Macerich have seen significant market value increases, with Simon's value rising by half and Macerich's by four-fifths between early 2023 and late 2024. This success is driven by focusing on high-performing "A malls" where footfall has returned to pre-pandemic levels. The stabilisation of online sales at 16% of total retail spending, combined with digital brands like Warby Parker expanding into physical locations, demonstrates the continued importance of brick-and-mortar retail. Limited new construction and low vacancy rates of 4% have created favorable market conditions, while initiatives like Netflix's experiential venues are attracting younger consumers, suggesting a sustainable future for well-positioned malls.

IADS Notes: Recent developments in mall performance demonstrate a significant shift from predicted decline to strategic revival. According to the Los Angeles Times in March 2025 , mall operators are successfully attracting younger consumers through experiential retail, with 60% of Gen Z visiting malls primarily for socialisation. WWD's November 2024 coverage  of Simon Property Group showed this strategy's success, with occupancy reaching 96.2% and increased leasing volumes driven by partnerships with trendy brands. WWD's December 2024 analysis  revealed how Simon's $1.3 billion investment in redevelopments and community-focused approach led to a 6.4% traffic growth over Black Friday weekend. The Financial Times' December 2024 report  highlighted historically low vacancy rates of 6.2% in open-air shopping centers, challenging e-commerce doom predictions. These trends suggest a fundamental transformation in retail real estate, where strategic positioning, experiential offerings, and limited new construction are creating sustainable market conditions that benefit both retailers and property owners. The success of premium malls, particularly in attracting younger demographics through innovative experiences like Netflix's planned venues, indicates a resilient future for physical retail spaces that effectively balance traditional shopping with modern consumer preferences.

Shopping malls are making a comeback in America