creating a vast mirror maze of consumerism with 520 glassy storefronts. Shoppers, who have escaped an endlessly gray Bloomington,
Minnesota, sky on a Monday morning in October, drift through the
largest mall in the United States like tourists at an Atlantic City buffet. A
couple holding hands strolls into a Zales while buttery perfumes emanate from an Auntie Anne’s next door. Kids and some willing parents
fling around on the SpongeBob SquarePants Rock Bottom Plunge roller
coaster, one of 27 rides at the Nickelodeon-branded amusement park
on-site. Distant echoes of saxophone Muzak clash with both elevator
whirs and bubbly pop songs. Somewhere in this otherworldly commercial expanse are five Lids stores and four Sunglass Huts.
When the mall opened, in 1992, it represented the pinnacle of retail
convenience and a mecca for young people to gather and spend. But
the $650 million megamall was always “vaguely unreal . . . exuding
the ambience of a monstrous hallucination,” as novelist David Guter-son described it in a 1993 Harper’s article, calling it “monolithic and
imposing.” Two years later, Jeff Bezos launched his online book marketplace, which quickly grew into a new type of Everything Store, one
that fundamentally redefined the shopping experience and led some to
argue that commercial centers like the Mall of America would become
gaudy relics of an antiquated era.
Now, Wall Street analysts say, the retail apocalypse is upon us.
Amazon dominates e-commerce and has gobbled up 5% of total U.S.
retail sales. Some expect that the company will own half the online
market within the next five years, a period during which, Credit Suisse
predicts, a quarter of all malls will close. By the end of this year, more
than 8,600 stores will have shuttered in 2017, the worst year on record.
But here’s the thing about the Mall of America: It’s fighting back.
“I hear all this doom and gloom in the industry,” says the mall’s SVP
of business development, Jill Renslow, with an upbeat, Midwestern
delivery. “I’m like, ‘Folks! Keep your chin up! There’s so much opportunity!’ ” The mall completed a $325 million expansion in 2015, says
Renslow, who started working there as an intern in the mid-1990s
and has seen it endure recessions and upheaval before. A new 342-
room JW Marriott has opened upstairs, and retailers like Zara and
Anthropologie are being lured to the space. The mall is experiment-ing with new leasing models to attract pop-ups and younger players
like Untuckit and Toms Shoes. Renslow, who is eager for people coming to Minneapolis for the 2018 Super Bowl this February to visit the
mall and be surprised, doesn’t view Amazon as a competitor but as a
partner; she recently worked with Amazon to install a set of pickup
lockers at the mall. She believes retailers in general can “bring online
shoppers to brick-and-mortar.” I ask her directly: Is physical retail dying? “Not at all!” she says.
Renslow isn’t feigning enthusiasm. Despite Wall Street’s pessimism,
industry leaders sound downright bullish on the future of traditional
retail. Why else, they argue, would Amazon spend $13.4 billion to buy
Whole Foods? Sure, the competition is fiercer than ever, and icons such
as Sears and JCPenney are dying. But they believe that the narrative
has been oversimplified. “Amazon alone isn’t holding the knife,” says
N YU Stern professor of marketing Scott Galloway, who studies the retail
industry. Cultural tastes have changed. Malls grew too quickly, at twice
the rate of the population, from 1970 to 2015. Many retailers succumbed
to quarterly earnings pressures, invested in share buybacks rather than
their stores, became saddled with private-equity debt, or failed to keep
pace with digital trends. What we’re seeing now, industry executives
say, is a rational, albeit painful, course correction. One study from retail-research firm IHL Group found that a mere 16 chains, including Radio-Shack and Payless, account for nearly half of all store closings, and that