The future of shopping malls: Digitalization

“Malls are on their last legs.”
“Malls are not dead. They’re evolving”

Both are quite contradictory yet somewhat true statements.

According to Coresight Research, 25% of America’s malls will close over the next 3-5 years.

That brings us to the second statement - "Malls are evolving, not dying".

There is some truth to this. First Insight’s study found that 71% of consumers spend more per visit in-store than online.

If not for the pandemic, this number would still hold good. So why are some malls thriving when others don’t make the cut?



Millennials and now Gen Z have increasing purchase power and malls that have embraced technology to cater to their needs are reaping the benefits. In fact, the arguments for digital malls can no longer be ignored given the ongoing pandemic.

Sources: PwC future of Customer Experience Survey 2017/18

While eCommerce did witness a surge even from baby boomers, people were still eager to go back to get in some ‘revenge shopping’ at malls (with the right precautions, of course).

The case for digital malls is two-fold:

  1. It is safer for both consumers and employees
  2. It provides a richer shopping experience

How does a shopping mall become a digital mall?

One of the roadblocks to adopting technology is that it often requires a huge investment.

But that is only true if you plan to build an Amazon Go like experience. Malls can leverage the power of existing apps with some easy integrations to increase footfall and engage customers through the purchase journey. Or even rely on an app-less loyalty program to incentivise purchases and repeat visits.

What consumers are looking for is simple - a digitised experience both online and offline. Think digitised browsing, virtual fitting rooms or pop-up shops

How going digital can boost revenue for shopping malls

While we’ve discussed the need for digital malls, the benefit of doing so bears elaborating.

#1. Better customer experience to increase sale value

86% of buyers are willing to pay more for better customer experience. In fact, offer a personalised experience and 49% of buyers will make impulse purchases. Better customer experience and personalisation are a product of digitisation.

Digital malls differentiate the consumer offering with an emphasis on experience and convenience.

Sources: PwC future of Customer Experience Survey 2017/18

#2. Adopt experiential shopping to increase engagement

Arguably, experiential shopping is a subset of improved customer experience. But as with customer experience, experiential shopping is a vast topic and deserves to be discussed separately. First, what is experiential shopping? Experiential shopping can be summed up in two words - immersive and shareable. It could be as small as adding a humble QR Code on a product that delivers an Augmented Reality experience or a mall-wide digital scavenger hunt with lucrative prizes. Experiential shopping is where retail meets entertainment.

IKEA showcased a successful implementation by inviting 100 Facebook contest winners that were allowed to stay overnight at an IKEA store in the UK and got to sleep on their choice of bedding. And experiential shopping doesn’t need to be a permanent fixture. In 2015,TOMS’ placed VR headsets in 100 stores to give shoppers an immersive experience to see how the ONE for ONE campaign for Peru had positively impacted locals.

#3. Create contactless experiences to increase foot traffic

The pandemic has made one thing abundantly clear - health and safety is the #1 priority. As restrictions lift and people start returning to some form of normalcy, keeping them safe and engaged can only be achieved through embracing digitisation.

Source: Fnedine Menu by Bambulabs Inc, 2021
  1. Contactless dining: Malls with food courts and restaurants have implemented digital menus to offer a safer dining experience. And experts believe that it is here to stay. Customers are also encouraged to provide feedback to better the service and earn reward points.
  2. Shopping appointments: As strange as it sounds, shopping at malls can require an appointment. Much like how you would make an appointment at the dentist, some malls offer the option to customers to book a slot where they come in and shop without having to constantly worry about social distancing.
  3. Contactless digital vouchers and payments: A great way to incentivise customers to shop is to offer prepaid vouchers and cashback vouchers. Not only does this improve footfall but also tap into customer buyer intent. 92% of consumers in the US use coupons when making a purchase. Cash has given way to 100% contactless payments and rise in self checkout kiosks. Enabling contactless payments is faster, doesn’t hold up the line and overall better for customer safety. 
  4. Virtual assistance: Customers that need assistance can request it through in-store online chat or interact with smart packaging and signs to understand more about a product.

#4. Data analytics to predict consumer spending habits

Imagine being able to predict what product your customer is more likely to buy, viewing a heat map to identify hotspots and being able to distill customer feedback in a meaningful way. Digitisation provides analytics that are otherwise unavailable. When shared with brands, malls can work with brands to map out a store flow conducive to buying, readjust rent based on how ‘hot’ a zone is and implement customer feedback.

Digitalisation of shopping malls can also help malls understand how many touch points customers need to make a purchase and which type of display attracts the most attention. Along with other valuable metrics, this can help you create a powerful marketing strategy - delivering relevant campaigns based on customer segments, time of day and location.

At any point in a customer’s purchase journey, you can reach out to them and give them that extra push they need to make a purchase. Whether it’s nutritional information on a grocery item or a discount on a pair of jeans that they have added to their digital cart or even post-purchase engagement to motivate repeat purchases, digitisation is key.

Why digital partnerships are key to going digital

It’s hard to talk about digitisation and not think of an app.

There are shopping malls that experiment with creating apps but there are several problems with this. Building and maintaining an app is expensive. The median cost to build an app is $171,450 (Clutch) and maintenance is nearly 20% of the total cost (MobileAppDaily). Then you have the added cost of marketing the app and actually getting consumers to download and use it.

Source: Google/Ipsos, Mobile App Marketing Insights: How Consumers Really Find and Use Your Apps (U.S.), May 2015.

A Think with Google article revealed that 1 in 4 installed apps are never used. So even with all the sunk costs, you are looking at minimal adoption rates.

Digital malls could rely on app-less engagement methods but the execution and analytics are often a struggle.

And let’s be clear.

Apps are not the problem. People like apps. They just don’t want to download another app. So, malls should consider partnering with digital platforms that already have a rich user base. Partnerships with super apps, fin-tech, banking, lifestyle and mobile wallets can help you get in front of your ideal customers.

Your digital mall lives as a mini app within multiple high-penetration digital platforms maximising your reach and creating a virtual shopping experience. 

Digital platforms benefit from this engagement since they are able to offer their users unique offers via rich and hyper-local merchant content and improve engagement. And, of course, users get access to special discounts, relevant offers and the ability to shop virtually that gamifies their shopping experience.

A clear win-win situation for all stakeholders.

What is the future of shopping malls ?

Today, consumers shop across multiple channels and devices. So, a digital-first experience is no longer ‘nice to have’.

It is a must-have as more customers flock to digital malls. The mall of the future is going to be a traditional mall that has been severely enhanced to bridge the gap between offline and online.

With customers and malls both rallying to go digital, it is a win-win scenario that will only result in further retail tech advancements.

Share this article


Get FREE access to
try the platform for yourself.