May 23, 2018
By 2023, malls will include new uses and experiences while moving away from apparel, said CoreSight founder Deborah Weinswig. “Over the coming years, many malls will reshape their offerings, moving from a focus on apparel stores clustered around department store anchors, to more diverse networks of non-apparel retailers, leisure and entertainment tenants, event and pop-up spaces, and business service providers,” according to Weinswig.
In a new report charting the retail trends that will determine the makeup of malls in the next few years, Weinswig writes, “Many forward-thinking mall operators and real estate owners are already reshaping their tenant mixes. Those property firms that are proactively dealing with market shifts by broadening their range of tenants now—rather than simply reacting to apparel store closure programs and bankruptcies as they arise—look set to be the most resilient as the apparel market shifts further.”
Department store consolidation is among the trends that will prompt these changes. CoreSight predicts that we’ll see as many as 1,200 department stores go dark by 2023. The main impact will be on lower-traffic regional malls.
A shift to services will also shape tenant mixes. “Looking ahead to 2023, we expect consumers will be redirecting an additional $78 billion to discretionary services at the expense of discretionary goods,” Weinswig writes.
CoreSight expects online apparel sales to more than double between 2017 and 2023. That translates into an additional $73 billion of apparel purchases moving from stores to e-commerce channels within five years.
Not only hard and soft goods sales will gravitate toward the web. CoreSight sees retail alternatives contributing to the erosion of traditional channels. By 2023, the firm predicts, U.S. shoppers will be spending an estimated $17 billion on online meal kits, beauty and personal care subscriptions, and online apparel resale and rental.
Furthermore, by 2023, millennials’ spending power will have grown to reflect their maturity. “We estimate that U.S. millennial households will wield more than $5 trillion in consumer spending in five years,” writes Weinswig.
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