The global shopping mall industry is undergoing significant changes that are somehow causing retail professionals to ask questions and ponder an uncertain future.

Our industry in Latin America has reached a point of maturity where the construction of new shopping centers is significantly slower compared to a few years ago. Instead, the focus has shifted towards expanding, renovating, and repositioning existing shopping centers. This change in the industry’s landscape has created a demand for individuals with expertise in asset management, as opposed to those specialized in fast-paced development.

In Latin America, several countries are currently grappling with political and economic crises. Even countries that were previously seen as economically stable, like Chile, are now experiencing turmoil, which in turn is impacting the performance of retailers and shopping centers in those regions.

Moreover, a new wave of populism has emerged in the region, revealing the vulnerability of young democracies. Almost every country in this region is facing challenges to democracy and the rule of law. This political instability makes it extremely difficult for developers and retailers to make long-term plans and strategies for the future.

Despite these challenging circumstances, Latin America continues to attract new global brands. Despite the uncertainty and risks associated with the region, international brands are still expanding their presence and entering the Latin American market.

Although the retail industry in Latin America may currently be in a better situation compared to the United States, it is crucial to acknowledge and prepare for the changes occurring in the global retail landscape. While e-commerce has not yet reached the same level of penetration, it is important to recognize that customer preferences and behaviors are evolving.

Merely maintaining shopping malls in good condition is no longer sufficient. Customers are increasingly seeking unique experiences, innovative concepts, and a diverse range of offerings. Younger consumers, in particular, exhibit less brand loyalty and rely heavily on technology for their shopping needs. Therefore, brands, retailers, and shopping mall developers that fail to adapt to this new reality may find themselves struggling to stay in business in the coming years.

Latin America’s population is predominantly young, technologically adept, and globally connected. They aspire to have access to the same goods and services as their peers in more developed markets. Consequently, the tenant mix in the region’s shopping centers reflects this demand for global brands and a wide variety of offerings to cater to their preferences and aspirations.

Previously, entertainment was considered a supplementary feature, but it has now evolved into a fundamental element, and many malls are incomplete without an entertainment component.

In addition to being a market that embraces global entertainment concepts, Latin America is also the birthplace of innovative entertainment powerhouses. One such example is KidZania, a highly successful educational entertainment brand that originated in Mexico and has expanded globally. Latin America is also home to major leisure concepts, such as Cinepolis, which is the third largest movie theater chain in the world and has a significant international presence.

These homegrown entertainment ventures have made a substantial impact not only within the region but also on a global scale.

Leisure must be innovation. Our customs have changed radically, and if you decide to leave home and go to a shopping mall nowadays, there has to be a reason beyond the primary need to buy. Society demands more human and sustainable places and environments where they can enjoy their free time, places that become destinations to experience and become a part of oneself. The trend we seen in Latin America is that shopping malls are anchored by the best entertainment.

Indeed, societal changes require us to adapt and evolve. In Latin America, the food and beverage sector has emerged as another significant aspect of the retail industry. The region is not only home to several renowned restaurants listed in the World’s 50 Best Restaurants, but certain capitals like Lima and Mexico City have gained recognition as culinary destinations.

This culinary prominence is also reflected in Latin American shopping centers, which have transformed into gastronomic centers. Visitors to these shopping centers can expect an elevated food offering that goes beyond the typical fast-food options found in other regions. The focus on providing a diverse and high-quality dining experience has become an integral part of the shopping center culture in Latin America.

A new paradigm should lead us to rethink spaces, based on the true reasons for visits, interactions, and gatherings. It’s about returning to the essence of human beings. It’s the inherent action and desire to see each other, to feel, to listen, to laugh together, to cry, to share, to exchange, to play, to love, to explore. To create collective journeys that allow us to accumulate memories forever.

Developers in Latin America are embracing a new approach to space planning, going beyond traditional retail concepts. They are now envisioning spaces that foster cultural engagement, sports activities, leisure pursuits, and even academia. The aim is to create environments where people can come together, interact, and build connections.

Owners and retailers in this part of the world are partnering to transform shopping experience, because the mall concept isn’t dead in the region—but it is being reimagined. With customer experience as their shared north star, real estate owners and retailers are joining forces to deliver exceptional long-term value to customers.

Even before the pandemic, shopping centers and retailers were facing many challenges: in the region: Though incipient, the rise of e-commerce, shrinking foot traffic, and changing consumer shopping preferences threatened a way of shopping that existed for decades.

Combined, these factors will likely require retail real estate owners to adopt a more holistic view of the “jobs to be done” in retail spaces. It is no longer enough to offer the physical space for consumers to find goods; retailers in Latin America have been very innovative, they’ve been enticing consumers with a more enriching experience that fosters a sense of community. Large online retail platforms and market places such as Mercado Libre have gained share by understanding and adapting to changing consumer preferences.

Owners and retailers in Latin America are designing new environments or retrofitting old ones with new intent and purpose.

Shopping Centers in the region are going hand in hand with entertainment to ensure that the entire family has fun.

Today, they are offering a wide variety of entertainment to attract customers. Some shopping malls in the region are dedicating an increasing percentage of their tenant mix to this purpose.

This segment will continue to evolve and improve, new concepts, new experiences to consumers with virtual and augmented reality technology.

It is essential to provide a wide range of entertainment as it is the only way to attract and retain customers.