Ann Lamont
Ann Lamont

Malls need to ‘lead from the future’

by Ann Lamont. The shopping centre industry needs to display bold and innovative leadership to stay in the emerging future.

by Ann Lamont. The shopping centre industry has a window of opportunity to display bold and innovative leadership – to both tenants and consumers – to stay ahead of the emerging future. Senior Lecturer at MIT, Otto Scharmer, refers to the importance of “leading from the future as it emerges”. Indeed, as Anna Robaton states in The Future of The Shopping Centre Industry Report from the ICSC Board of Trustees that, “[The] rapid advance of technology and the growing influence of the millennial generation, among other trends, have created both new challenges and opportunities for shopping centre owners.” There are no definitive answers yet as to where retail is moving, as trends keep evolving, particularly in the context of COVID-19. Shopping centre owners will require bold, agile leadership and the willingness to experiment to remain relevant and to lead from this emerging future.


The shopping centre of old is dead, Abha Bhattarai wrote in The Washington Post article, Malls are dying in 2019; and the thriving ones are spending millions to reinvent themselves. She wrote that, “One in four US malls is expected to close by 2022, according to a 2017 report by Credit Suisse.” This was before the pandemic hit, and the number of shopping centres that have closed has been exacerbated by the pandemic. Yet in South Africa the majority of shopping happens in shopping malls. In 2019 in an article written for Accenture, John Watling stated, “according to a Visa survey, 63% of South Africans said they prefer to make purchases at a mall, and Urban Studies found that 76% of South Africans visit a mall at least once a week.”

How do shopping centre owners reinvent themselves considering different country contexts? What do these future trends mean? The digital transformation of retailers irrespective of the ecommerce uptake in any given country, as well as the digital potential of shopping centres is creating many opportunities. Etailers are requiring physical space and experiential stores. Increasingly no retail tenants should be thought of as bricks and mortar or online but rather a blend. Shopping centres recognising and facilitating this will be able to lead. This will also require alternative rental models that use geofencing models to determine sales. Etailers which have created physical stores will not be prepared to pay rental based on a turnover that includes sales on items not stocked nor delivered in that store.

“It seems as if every day there is an etailer announcing it is opening physical stores. At the same time, our retailers are investing in technology to deliver a platform that meets their customers’ needs,” said Stephen Lebovitz, president and chief executive officer of CBL & Associates Properties, Inc, quoted in a recent article. Omnichannel retailers will also increasingly be looking for fulfilment support and warehousing which should be part of any future shopping centre planning. This can be evolved into exciting consumer-facing concepts. For example, since 2013, Paris has been developing ‘logistics hotels’, which are smaller mixed-use developments used for delivery logistics, located in residential neighbourhoods instead of the industrial urban fringe. The most unique ‘hotel’ is Chapelle International which opened in April 2018. The hotel is an example of the city’s innovative approach to the urban planning of logistics in the era of ecommerce. It also hosts a data centre, offices, sports facilities like tennis courts, and an urban farm.


Shopping centre owners, with the advent of Wi-Fi data and other ways to track movement in and around a shopping centre, have the options to create direct relationships with consumers and to collaborate with retailers to share consumer data and facilitate loyalty programmes. Some shopping centres such as Westfield in Australia have chosen to enter the ecommerce value chain directly with the formation of Westfield Direct. Westfield Direct has provided an additional direct to consumer e-channel via Westfield Direct for its tenants. Westfield makes the sale and manages fulfilment on behalf of its tenants. “We believe Westfield online is simply a new marketplace which will complement our existing shopping centre business. We believe physical and online centres will be mutually reinforcing,” said Steven Lowy, previous Westfield Group managing director.

It is therefore imperative that the shopping centre owner of the future think not only of its traditional landlord /tenant role; but of its direct role with consumers and how this can support both tenant and consumer needs.  Similarly, to the landlord retailers which also need the ability to experiment with new retail models. Large retailers can experiment around ecommerce and agile experiential stores, and growing trends in digital adoption; but very few can experiment in real space. So how do shopping centre owners provide their bigger retailers with experimental stores, but also provide their smaller retailers with knowledge and information.

Unibail-Rodamco, Europe’s largest listed commercial property company, has established an innovation incubator, UR Lab, that is working with internal and external stakeholders, including retailers, to monitor trends, test concepts and implement the strongest ideas at the company’s shopping centres. In short, shopping centre owners need to create an omnichannel environment that integrates bricks and mortar with ecommerce; provides alternative commercial models for digital sales; supports fulfilment infrastructure; collaborates with tenants around data; forms a direct relationship with consumers; and provides experimental space and thought leadership to its tenants.


Main image credit: Photo by Ali Mahmoudi on Unsplash.



Ann Lamont is Executive Chairperson of the Two Oceans Aquarium Education Foundation. She has spent her career supporting individuals, organisations, and society to find solutions to the complex challenges of our times. She has significant business experience and has been an investment banker at Rand Merchant Bank; strategy consultant for Monitor Company; and until recently an Executive Director at EY. She is a Synergos Senior Fellow and Aspen Global Leadership Network Fellow.


– Receive the Retailing Africa newsletter every Wednesday • Subscribe here.