A sharp decline in consumer traffic for indoor malls, and a slightly less impactful reduction in outdoor mall traffic, hit retailers hard during the pandemic, but it wasn't enough to knock either medium down for the count, a new study from consumer data analytics company Placer.ai found.
The study looking at the data from 10 indoor malls and 10 outdoor malls across the country found that while significant reductions in traffic were expected and found, the shopping centers are rebounding nicely, and could learn some lessons from each other moving forward.
The week of May 4, indoor shopping centers were down 74.6% year-over-year, while outdoor centers were down 74.5%. As of June 8, those numbers rebounded, showing a decline of 41.7% for indoor malls and 33.5% for outdoor venues.
Although the "decline of the American shopping mall" has been in the national conversation for over a decade, they are still here and still doing business. They were, at least, until mid-March when the pandemic took hold of the retail industry and slammed it to the ground.
But, comparing those June numbers with those tallied the week of March 9, the last week before the pandemic came down in full force, the indoor centers showed only a 9.2% reduction in traffic, while outdoor centers saw a reduction of 15.8%.
Part of that decline, and its subsequent comeback, is due to the True Trade Area (TTA) the facilities have. The TTA is a measure of the larger population in the expanded area around the center that the malls can expect to draw customers from.
Because of many stores in both indoor and outdoor facilities being closed and only a limited number of "essential businesses" being open, the TTA for both was way down in May, but as of June 8 was tracking only 9.7% behind what it was the week of March 9.
The report concluded that the model of outdoor malls, which tend to center around essential retail and also provide a more clear path to socially distance oneself, could provide some lessons for their indoor counterparts for as long as the aftershocks (and potential full reboot) of the pandemic remain.
The report also concluded that while neither model, through this exercise, proved to be immune to the effects of COVID-19, the specific characteristics that each medium provides might be of interest to businesses looking to diversify their outlet offerings in the future.
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Patrick Smith
Patrick Smith, based in New York, covers the business of law, including the ways law firms compete for clients and talent, M&A and corporate work, leadership and marketing innovation. Reach him at [email protected] or on Twitter at @nycpatrickd
