Are modern shopping centres losing their status?

Katerina Bukhvostova

Two years ago we questioned what the future of shopping centres would look like. The webinar we hosted together with Kamppi’s shopping centre manager offered great insights into the operational side of one of the largest shopping centres in the Nordics and, at the same time, brought together our thoughts on the future of these multifunctional hubs. In this blog post, we decided to take a fresh look at how things have progressed during these last two years by looking at the global situation.  

So, in 2017 - are the shopping centres of today getting anywhere close to their vision of the future? Before we get ahead of ourselves, one thing is clear - things have not stayed the same during such a short period.

For some, the situation has got tough. Hundreds of shopping centres across the globe have been closing, and this process hasn’t stopped - just take the example of countries like the USA or China. The medium sized, out-of-the-way locations have been hit particularly hard by this crisis. Their foot traffic decreased drastically once anchor department stores (such as Macy’s, J.C. Penney, Kmart) began closing their doors - leaving shopping centre management wondering who is going to pay the bills and fill the thousands of newly vacant shops. With the change in consumer habits, the prominent role of e-commerce and the rise of technology being key reasons for these closures, it is hard to believe that this will slow.

The experience that e-commerce cannot deliver

There is, however, a bright side to this. Those who have realised early on that the retail landscape is transforming faster than ever have managed to turn their businesses around to adapt to customer needs or are at least starting to do so. Modern consumers show no sign of displeasure about spending time in physical locations. On the contrary, they are very eager to stay in the hubs as long as it matches their daily routine and offers something beyond shopping. With clear convenience-oriented tendencies, a lot of shopping centres are adjusting their looks and offering more to consumers, such as a large number of services, including plenty of dining and entertainment options.

Some people come to these locations to spend even more time than the management expects, which was the case in the Kamppi shopping centre. The longest dwell time happened to be during early afternoon when people come for lunch, run their errands and generally spend more time in comparison to after work hours. Thanks to real-time analytics of customer movements, detailed information on their behaviour makes it easier to serve the demanding consumers by learning the paths they take. Their whole daily routine could be centred around the same place, provided everything is conveniently located: they could work nearby and come for lunch, followed by dinner with friends or after work shopping, use various services or simply go to cinemas, gyms or even language courses.

Smart cities and the merging of borders

The shopping centres of today represent the trend towards “global urbanism" and “smart cities”. Merging with urban surroundings and utilising outdoor locations alongside multi-storey buildings create a totally different, more inspiring atmosphere, where residents are happy to spend more time. A good example is the the Dubai Design District where people work, dine, live and shop - all in one area. It becomes almost impossible to separate the actual city from the shopping centres in the same way consumers no longer differentiate between clicks and bricks - for them it is just shopping. Developing IoT retail technologies are one of the key accelerators in this process, helping everything and everyone stay more connected than ever.

What conclusions can we draw?

Claiming that all shopping centres are dying out is rather inaccurate, as they are simply adapting to customer preferences and needs. This may be the case with suburban locations, which have stopped serving their purpose and are unwilling to change. It is them who are inevitably facing a tough future...

Whether these modern hubs should still be referred to as ‘shopping centres’ or not is up for debate, we are of the opinion that what is happening right now should not be called the death of the old format but an organic transformation which is already here and now, not in the future.

More on this topic:
8 Key metrics for malls to optimise layouts, conversion and advertising
Nordic's largest shopping centre: wi-fi analytics will drive our marketing decisions


Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.