Apartments, hockey rinks and Amazon warehouses: Macy's closures will set off a wave of change at shopping malls

Many brands that typically have large stores, including Sephora and Nordstrom, are creating smaller-format stores embedded in neighborhoods. These stores feature less inventory, since customers can order items to be delivered to their homes, and store managers curate the products available on shelves to meet the needs of the specific community.

The year 2020 may bring the death of the department store, marking the end of that 200-year-old retail innovation after decades of decline. Macy’s has furloughed more than 100,000 workers.

Zoning is losing its power. New ventures are able to reach a meaningful scale before regulators (and competitors) react. The boundaries between different uses are blurring, with people lodging in apartment buildings, living in hotels, working in restaurants and retail malls, and sleeping or socializing at the office.

Instead of setting up shop in malls, brands are increasingly entering cool neighborhoods and renting storefronts next to the places where people work, eat, and seek out entertainment. Retail in “town center”-type locations is strong; according to Public Square, occupancy rates in those areas average around 95%.