There’s no denying that today, malls are a commercial cornerstone of modern society. They have come a long way since The Galleria Vittorio in Milan – widely considered the world’s first mall – welcomed its first visitors almost 150 years ago.
The Galleria Vittorio combined retail, dining and café culture at a central point between the cathedral and opera house. In essence, a community hub that was, and is today, the place to see and be seen in Milan.
From there the concept developed from open-ended arcades connecting locations, to enclosed spaces. In the US, they became suburban destinations of convenience. By 1960, there were 4,500 malls in the US, and others were jumping on the bandwagon.
As ‘suburbanisation’ took hold, the time-saving convenient shopping destinations became the idea of what constituted a modern mall across the globe. The UAE joined the ranks in 1981 with the launch of Al Ghurair Centre, which kick-started the country’s journey towards becoming a global retail hub.
Fast-forward to the present and the global mall market size is valued at $5.4 trillion, projected to grow by over 40 per cent to $7.8 trillion by 2028. This projection is not without another change to the very idea of what signifies a mall. Malls have transcended their traditional role as shopping centres and evolved into - or returned to - vital community spaces and lifestyle destinations.
Malls are about people, not just stores
The rise of ecommerce accompanied by a seismic shift in spending patterns has altered consumer behaviour and what entices guests to a physical retail destination. The convenience of shopping or picking up the weekly groceries has been superseded by the conveniences of time, social interaction and engagement in experiences.
Many have taken this as a challenge to adapt, innovate and redefine their purpose. Since 2014, the global e-commerce market more than tripled to $4.9 trillion in 2021, including a sharp spike in 2020 due to COVID-19-related restrictions. While the growth trajectory has returned to pre-pandemic levels, it is still on the rise. Last year, e-commerce accounted for almost 20 per cent of total global retail sales, and this number is projected to increase to 24 per cent by 2026.
In the face of such strong competition, malls remain popular not because of convenience alone, but because they bring people together. Like The Galleria Vittorio in Milan, citizens and residents in the GCC are looking for unique gathering places that are reflective of their community.
Contributing to the community
The contribution of malls to community building is three-fold.
- They serve as community hubs. Housing everything from shops, restaurants and cinemas to banks, gyms and medical centres under one roof.
- Malls connect communities and cultures, encouraging social interaction and evoking a sense of belonging. They present an opportunity to explore with friends and family or even experience the cuisines and traditions of other nations, shown by the fact that dining is the primary motivator for guest visitation.
- Malls offer platforms for promoting social responsibility. Through CSR initiatives, such as donation collections, malls are leading the way in inspiring people to give back to society.
Every experience matters
For malls to become active community builders, they need to address the needs of guests by providing accessible and inclusive public spaces where all segments of society are welcome. Research by McKinsey that has resonated with me references removing guest pain points and replacing them with delight points.
Creating experiences that delight guests will always be the goal. The way we achieve this, however, is always evolving in line with trends and technology.
An integral part of this approach is rethinking the guest experience. Nearly 60 per cent of consumers expect more than half of retail spaces to focus on engaging experiences. Guests are craving connectivity and personalisation.
Therefore, malls need to elevate their offerings to resonate with the local demographics. And at every step of the way, community engagement should be at the heart of everything they do. From a stakeholder perspective, malls can make a significant difference by creating a conducive environment for local businesses and providing a platform for them to grow.
Finally, malls can be instrumental in championing positive change within the community. The UAE’s Year of Sustainability and the run-up to the 28th UN Climate Change Conference (COP28) offer an ideal opportunity to embark on a sustainable overhaul.
A lifestyle destination can have a far-reaching impact through conscientious business practices and community involvement. Additionally, hosting community initiatives, integrating sustainability as part of activities and implementing best practices across the destination can create a sense of guest ownership and community responsibility.
By prioritising elements such as creating spaces for social interaction and promoting local businesses, while maintaining the quality, choice and elevated experiences guests have come to expect, malls can play a pivotal role in fostering stronger connections within the communities they serve.
The Galleria Vittorio is enduring proof of this. That’s something no e-shop in the world can replicate.