By Benjamin Raziel

LOS ANGELES — For the past two decades, the rise of e-commerce, shifting consumer behavior, and a lack of strategic repositioning have led to the steady decline of the American mall. Dwindling brick-and-mortar profits, exacerbated by the COVID-19 pandemic, resulted in a wave of cutbacks and downsizing across the country that cast the future of the American mall in doubt.

But Tyler Mateen, founder and CEO of Cannon TTM, believes the mall isn’t dead yet and could be revitalized with the right strategy and investments. With a change in direction, malls can still bring droves of shoppers back to the in-person retail experience — and this change has already started at the HHLA mall in Los Angeles.

“The current version of the American mall is failing, but it doesn’t have to,” said Mateen. “Similar to how the Sherman Oaks Galleria underwent a significant transformation in the early 2000s that reshaped the concept of the mall from a traditional, enclosed space to an open-air lifestyle center complete with integrated office spaces, restaurants, a gym, and multiplex cinema, malls today can evolve by focusing on changing the image and function of the mall through revolutionary shopping, entertainment and dining experiences. There is still plenty of opportunity for the American mall to become the community’s all-in-one hub again.”

Tyler Mateen’s company bought the HHLA mall, formerly The Promenade at Howard Hughes Center, for about $80M in 2023, and has already attracted tenants that Mateen said will help reimagine the mall as the go-to entertainment and lifestyle destination in Los Angeles.

According to Mateen, the old model that shopping centers have relied on since their inception is no longer viable. A recent study from IBIS World found that shopping mall revenue has decreased by 4% over the past five years. Although consumers have slowly returned to brick-and-mortar stores since the pandemic, shoppers need new reasons to come back.

Consumers’ changing preferences led Tyler Mateen to bring on Meow Wolf, an immersive art production company with installments across the country, as a tenant this year. Meow Wolf plans to open a permanent exhibit in the mall in just over a year, taking up a portion of the building’s Cinemark space.

“I’ve always wanted to bring immersive, forward-thinking experiences to the mall,” said Mateen. “Meow Wolf and other entertainment offerings will be the hallmark of HHLA’s next phase.”

These immersive entertainment experiences are quickly becoming a focal point of malls’ appeal to consumers. HHLA also recently welcomed 60out Escape Rooms as a tenant, with the mall serving as the company’s flagship location for escape rooms and virtual reality entertainment.

Shopping malls across the United States are following in HHLA’s footsteps, incorporating more immersive, interactive and entertainment-based tenants. With the inclusion of arcades, movie theaters, laser tag, go-carts, indoor sports and even roller coasters, malls are attracting a brand-new audience of experience-seeking consumers.

Macerich, a Santa-Monica-based real estate developer, recently announced its plans for a $100 million revamp to its Green Acres Mall, including new experience-focused tenants, Launch Family Entertainment and Chuck E. Cheese.

“We are looking to bring in more entertainment and more experiential uses,” said Macerich Senior Vice President of Leasing Eric Bunyan in a recent Newsday article.

This shift towards in-person experiences targets consumers who crave the immediacy that made online shopping so popular, particularly Gen-Z consumers. According to the International Council of Shopping Centers, younger consumers now prefer in-person as much as online shopping, if not more. Gen-Z, who make up 40% of global consumers, are increasingly interested in the instantaneous gratification of trying and buying their products in person. Malls across the country hope to bridge this gap with entertainment by offering tactile, immediate experiences that can’t be replicated at home.

By expanding their entertainment offerings, malls can return to their status of being a centralized hub for consumers’ shopping, dining and amusement needs. The Simon Property Group, an Indianapolis-based real estate investment trust, announced its Keystone Fashion Mall would undergo major redevelopments until the end of 2026, featuring a new dining and entertainment complex and office spaces.

“We have sort of a concept of live, work, dine, play, shop, you know, it’s sort of this all-inclusive experience for individuals,” said Simon Property Group Chief Administrative Officer John Rulli in a recent Fox 59 article.

These changes have already yielded positive results. A study from Coresight Research found that consumer traffic in malls is up more than 10% on average compared to pre-pandemic levels.

“The death of the mall is wildly exaggerated,” Coresight Research Founder and CEO Deborah Weinswig said in an interview with USA TODAY. “The other side of that is the opportunity is more significant.”

Experience-focused renovations, such as HHLA’s, attract consumers by reminding them why the mall was a cultural institution in the first place. The shopping mall’s convenience, diversity and immediacy have always had obvious staying power, but Mateen believes that consumers just need to be reminded of their benefits with a new angle.

“There’s no question that immersive technologies will redefine the future of entertainment and retail,” said Tyler Mateen. “These innovations, still in their infancy, are evolving at an unprecedented pace, captivating audiences and consumers alike. The Sphere in Las Vegas serves as a remarkable example of the transformative power and attraction of immersive experiences. As they continue to be refined and more accessible to consumers, these experiences will only become more compelling, allowing shopping malls to once again be prominent entertainment and retail destinations.”