This is not the headline anyone wrote a decade ago.
The most online generation in history is the one bringing malls back.
New data from Circana shows shoppers aged 18 to 24 bought 62% of their general goods in physical stores last year. Shoppers 25 and older only managed 52%.
The gap is real. And it's changing what mall operators are building.
NielsenIQ sees Gen Z's global retail spending topping $12 trillion by 2030. That growth tops every other age group, which is a giant wallet up for grabs.
What's pulling them off their phones and into stores? One word - experience.
Mall operators are leaning into it hard. Social-friendly dressing rooms. Indoor rock climbing walls. Photo spots designed for posting.
"They value experiences almost more than they value material things," said Cory Scott, EVP of Asset Management at mall operator Macerich.
One young shopper told Fox Business they grew up during quarantine. That made hanging out with people in person feel like a big deal once life opened back up.
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The mall comeback is happening inside a stronger-than-expected retail backdrop. U.S. retail sales rose 0.5% in April from March. They climbed 4.9% from a year ago, the Commerce Department said.
That's even with high interest rates pinching budgets. The consumer is bending, not breaking.
That matters for any investor watching real estate, clothing, restaurants, and any name that depends on foot traffic.
Mall-anchored REITs - which are real estate funds that own and lease shopping centers - were left for dead a few years ago. Now they're sitting on the age group the rest of retail is fighting to win.
Mall REITs got mostly written off in the late 2010s as Amazon vacuumed up retail.
The story for Gen Z is different. They aren't picking the mall over online. They're using both. The mall is the hangout. Online is the restock.
That changes what a profitable mall looks like. Less space for stores. More space for food, fun, and photo spots.
Operators that figure that out first are the ones to watch. Macerich and rivals that have started redesigning around experience over inventory will be the early test.
If foot traffic keeps tracking with Gen Z's wallet, the next leg of the retail recovery runs straight through the mall parking lot.
Open-air malls and lifestyle centers have outpaced enclosed malls for years. The Gen Z trend is pushing builders to do more of both - open-air for daily trips and enclosed for full afternoons.
The names to watch are the operators with the cash to remodel. The ones that stick with old layouts may end up on the wrong side of a young, in-person consumer.
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