Make way for the malls - and then maybe town centers - by Carol Todreas

The retail scene today is not just one scene — it’s a theatrical drama with many scenarios. In the end, they all lead to a positive finale: even with the continued growth of e-commerce, physical retail remains the most important way to reach customers and sell merchandise.

Right now, the most noteworthy act is happening in the malls. It’s hard to believe that just a few years ago, malls were considered the lowest form of real estate. Now, they’ve been reimagined and are arguably regarded as a premium retail format and a prime venue for brands to connect with their customers. They’ve been reborn as mixed-use hubs with entertainment venues, a variety of gathering spaces, and special events that create a welcoming social experience.

Interestingly, malls have borrowed the urban concept of placemaking — the practice of enhancing public spaces to engage communities through art, cultural events, and markets — and adapted it to retail. In doing so, many malls have replaced older town centers and become destinations for people, and therefore, for stores.

Part of this resurgence comes from the rise of digital-native brands — companies that started online, built loyal followings, and then realized that physical stores could strengthen their brand identity. One of the most successful examples is Warby Parker, which began as an online eyeglass retailer shipping products from a garage. Business became so brisk that opening physical stores became the easiest and best way to engage customers and grow the brand. Warby Parker’s stores now offer an interactive, fun buying experience — and while the company still maintains a robust online presence, it now operates more than 300 brick-and-mortar locations, with a goal of expanding to 900 across the U.S.

Class A malls — those in upscale locations — have evolved from department store–anchored properties surrounded by national chains into mixed-use town centers. Many now include medical offices, workplaces, and even residential units, complementing new retail, restaurant, and entertainment offerings.

Much of the new retail is designed to attract Generation Z — the first generation born and raised in the digital age, now between the ages of 13 and 28. Gen Z-ers want to go out, shop, and be in malls. They value convenience, product touch and feel, instant gratification, and social interaction. Mall owners are responding by redesigning interiors, carefully curating new stores and restaurants, and tailoring the vibe to what excites this generation. With this success — and retailers often on waitlists for space — developers are beginning to explore the redevelopment of Class B malls, recognizing opportunities to attract other generations ready to spend.

Street-level retail and village centers could be next — but so far, they’re moving like dinosaurs: too big, too cumbersome, and too slow. Many spaces remain overpriced, tangled in red tape, and delayed by outdated municipal zoning and permitting. Property owners often have no immediate need to lease, while parking shortages and weak curb appeal make many older downtowns and town centers less inviting than the bright, welcoming atmosphere of newly renovated malls.

Opportunity? Big time.

This is an era when new retailers are expanding and demand for space exceeds supply. Developers and owners can — and should — work with municipalities to reinvest in older properties and revive town centers that still retain the charm and character of bygone days. The customer is living right around the corner, looking for connection — a place to hang out, chat, eat, drink, and enjoy. In a world filled with screen time, that kind of real-world experience is a rare and welcome delight.

Carol Todreas is principal of The Todreas Group, Cambridge, Mass.