Outdoor Shopping Center Sales Inch Closer to Pre-Pandemic Levels, While Indoor Malls Have Better Quality of Visitors

Outdoor shopping centers continue to be the preferred retail experience for consumers. By the end of August, consumer traffic was down only 24.6% at outdoor shopping malls compared to pre-pandemic foot traffic, according to research from Placer.ai. This is a significant recovery from March and April, when outdoor foot traffic was down nearly 100%. Indoor malls have not fared as well. The same report shows that indoor mall foo traffic, while also vastly improved from March and April, is still down 37.2% from pre-pandemic levels.

While both outdoor malls and indoor malls are improving overall, week-to-week data also show volatility. For outdoor malls, the week of August 31 was a decline from August 17, when foot traffic was down only 18%. The week was a post pandemic hit a peak for foot traffic. Indoor malls actually outperformed outdoor malls the same week for the first time during the pandemic with foot traffic down only 17% from pre-pandemic levels.

While outdoor malls have seen stronger foot traffic, indoor malls have seen a higher caliber of visits, according to the Placer.ai research, meaning that on average visits at indoor malls were longer and consumers traveled a further distance. At the beginning of August, consumers stayed at indoor malls an average of 64 minutes, while consumers at outdoor malls stayed only 51 minutes. Shoppers also traveled a longer distance, showing that the true trade area of indoor malls was 25.4% larger than outdoor malls. By the end of August, indoor malls had a true trade area difference of 78.6%. Still, early June seems to have been the peak for distance traveled. In early June, indoor malls had an 87.8% true trade area difference over outdoor malls.

While indoor malls lead in some areas, retailers are seeing the benefit of outdoor shopping, particularly in a post-pandemic world and a world where pandemic could become more common. Macy’s is one of many traditional retailers planning to launch an outdoor shopping model to drive traffic and ultimately revenue. This could become an earmark of the retail evolution.

Earlier data from Placer.ai also showed potential opportunities for department stores as a result of the pandemic because department stores have the ability to consolidate several brands under a single roof. This could help stores increase foot traffic through a direct-to-consumer model.

Placer.ai, however, also proposes an alternate trend that could emerge. Indoor malls have the potential to cross-shopping and better access to different types of customers. These features could encourage some outdoor retailers to shift operations indoors. Direct-to-consumer shopping trends could compound with these features and ultimately drive some experiences indoors.