Revolutionizing the Retail Experience: How AI is Reshaping Shopping Malls and E-commerce

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In the wake of the digital revolution, e-commerce h as transformed the retail landscape, posing significant challenges to traditional malls. With the convenience of online shopping and an array of options available at consumers’ fingertips, malls must adapt to remain competitive. To catch up with e-commerce and secure their relevance, the retail, shopping center and e-commerce industry need to embrace innovative strategies that combine the best of both worlds – the tangible shopping experience and the convenience of digital retail.  

In brief: AI trends in retail and E-commerce  

  • The digital revolution and the rise of e-commerce have posed significant challenges to traditional shopping malls, making it necessary for them to adapt and innovate to remain competitive in the retail landscape. 
  • Despite the threat from e-commerce, offline shopping and physical malls have shown resilience, with occupancy rates reaching impressive levels after the impact of the COVID-19 pandemic. 
  • The worldwide shopping centers market has reached a substantial value, and it is projected to experience steady growth in the coming years, particularly in the Asia-Pacific region due to the rising purchasing power of the middle-class. 
  • To stay relevant and meet evolving consumer preferences, forward-thinking shopping malls are increasingly turning to artificial intelligence (AI) to create personalized and immersive shopping experiences for customers. 
  • This article explores how AI-driven solutions can revolutionize the retail experience in shopping malls, from reimagining mall layouts to leveraging customer data for hyper-personalized marketing, ultimately fostering sustainable growth and customer loyalty in a competitive retail market. 


Building AI solutions for Retail and Ecommerce Industry

The rise of e-commerce, especially during the COVID-19 pandemic when people did not step out of their homes posed a threat to the retail industry, but offline shopping is not going to go away anytime soon. In fact, after the pandemic’s impact, occupancy rates at top-tier malls have seen a major uprise, reaching an impressive average of 95.1% in the year 2022 (according to Coresight Research).  

In 2021, the worldwide shopping centers market reached a substantial value of USD 5,231.63 billion. Looking ahead, it is projected to experience steady growth, with a Compound Annual Growth Rate (CAGR) of 5.9% from 2022 to 2028, with revenue forecasted to be around USD 7,797.36 billion (according to Grand View Research).  

The Asia-Pacific mall market is projected to witness the highest growth (CAGR of 6.7% from 2022 to 2028). This is mainly due to the rise in purchasing power of the middle-class in countries such as India and China.  

In an increasingly digital and fast-paced world, the retail landscape is evolving rapidly, and shopping malls are no exception. As consumer preferences shift, and technological advancements continue to reshape the way we shop, forward-thinking shopping malls need to embrace artificial intelligence (AI) to create personalized and immersive experiences for customers. 

Key challenges for the retail industry

While shopping malls possess a wealth of data, encompassing shopper behavior, tenant sales, and category performance, they often lack the analytical capabilities and tools to extract meaningful customer insights from this information. As a result, many mall operators continue to rely on traditional methods, personal experience, or intuition when making key business decisions, missing out on the potential value hidden within the data.  

Shopping malls have long struggled to keep up with rapidly changing consumer behaviors and preferences. Traditional decision-making processes based on intuition or historical data fail to provide real-time insights into customer needs and desires. Mall operators often grapple with questions such as which stores attract the most foot traffic, the effectiveness of anchor stores, and identifying potential “spend engines” among tenants. 

How can the retail and ecommerce industry fight back? 

The key to staying competitive lies in merging physical and digital shopping experiences into a seamless omnichannel approach. Mall retailers should reimagine their in-store experiences, develop their e-commerce platforms, and focus on personalized marketing campaigns.  

In addition, mall operators should build a customer-friendly mall layout, and focus on targeted tenant allocation, for a unique buyer experience. This approach not only enhances convenience but also provides opportunities for cross-selling and upselling, further boosting sales. 

Reimagining the Mall Layout 

Mall operators decide who will be the tenants, what size store/units each tenant will have, lacking analytical data driven decision making. Many malls have a random cluster of stores, uncategorized by brand type, product type, or price range. Mall operators must address questions like:  

  • Which specific cluster of stores or categories are the highest selling in the mall?  
  • Which stores, despite having lower sales, have unexpectedly high footfall?  
  • Are the anchor stores effectively driving foot traffic and sales into the mall? 
  • What stores or brands have the strongest appeal to consumers living or working in the mall’s geographical location? 
  • What kind of cars are spending more hours in the mall parking lot, and how many of them exited with or without shopping bags?  
  • Mall operators can analyze various data points like age and gender-specific traffic metrics, peak periods, variables such as sale season, holidays, and more. AI-enabled heatmaps can provide insights into customer movements within the mall providing top spots, shop footfalls, and bottlenecks. They can use these insights to identify low-traffic spots and employ strategies like rethinking the mall layout, to increase footfall and revenue in those areas.  

For example, installing a kiosk of a popular food joint in a low-traffic zone might increase its footfall. Another innovative strategy would be to make ‘coupon zones’ within the mall. Instead of giving out physical coupons, mall operators can create these coupon zones wherein customers can walk into that area and receive coupons on their phone from nearby outlets. 

AI Based Tenant Performance Analysis for Malls 

With the amount of data generated in malls by combining multiple sources, AI-powered analytics can help assess the performance of anchor stores and smaller tenants. Mall operators can track foot traffic and sales data, identifying which tenants truly drive business and contribute to the mall’s overall success. 

Mall operators can identify low performing zones by footfall analysis and change the mall layout. For example, if there are two high performing apparel stores with great footfall and sales, the marketing team can club two low performing apparel stores in between. This will not only result in more convenience for the customers, but also increase the chances of customers stepping into these low performing stores.  

Unexpected “Spend Engines”: Unearthing Hidden Value 

AI’s data-driven approach can uncover surprising insights regarding tenant performance. While some stores may have modest individual sales figures, they can be unexpected “spend engines” by driving cross-conversion and influencing other store sales. By recognizing these hidden gems, malls can nurture symbiotic relationships between tenants, enhancing the overall shopping experience. 

Retail as a Service 

  • Personalized Marketing: AI-driven customer profiling allows malls to understand individual preferences and deliver personalized offers and recommendations. Smartphones and IoT devices provide a wealth of data that can be leveraged to create hyper-targeted marketing campaigns, increasing customer engagement and loyalty. For instance, IoT devices can use Computer Vision and help build customer personas.  
  • They can do this by analyzing what brand of clothes the customer is wearing, what phone, jewelry, lipstick brand, and makeup they’re using, what shopping bags they’re carrying, and/or likely to carry. Based on these personas, mall operators can display personalized ads, and analyze customer reactions to make better business decisions. 
  • Digital Signages: Retailers have the opportunity to enhance customer experiences by leveraging digital signage to showcase interactive digital products and service catalogs. This innovative approach facilitates seamless browsing of offerings, granting customers effortless access to comprehensive product information and ultimately leading to heightened sales potential. 
  • Path Analysis: This will help track the impact of personalized ads and digital signages in malls. It will gain insights into what kind of ad in which part of the mall was effective, and did it lead the customer to the store or not. This will also help structure the price of ads in various parts of the mall.  
  • Mall-to-Store Analysis: Mall operators can do a mall-to-store analysis to see the number of people who visit a mall compared to the ones who visit a store. Personalized ads and digital signages will be key to analyzing customer engagement in the store(s).  
  • How many people are outside a store, but do not enter. How many people are outside a store but do not enter, how many of them enter, how many of them make a purchase, and how many people don’t. Stores can get better insights into outside analysis into window marketing and observer patterns just outside the store.  


AI is not just a fleeting trend but a fundamental force reshaping shopping malls and the entire retail industry. By embracing AI-driven solutions, shopping malls can create unique and personalized experiences that attract customers, drive loyalty, and foster sustainable growth.  

By implementing omnichannel strategies, investing in cutting-edge technology, curating memorable experiences, providing exceptional customer service, incorporating AR and VR, introducing click-and-collect services, offering contactless payment options, and prioritizing sustainability, malls can thrive in the competitive retail market. 

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