AI’s Impact on Malls and Stores: The Good, Bad and the Inevitable

AI is reshaping U.S. retail by automating tasks like personalized recommendations, dynamic pricing, and inventory management, with 68% of consumers using AI tools in the past 90 days. The ICSC and McKinsey report projects $1 trillion in U.S. retail revenue from agentic commerce by 2030, where AI agents independently search, compare, and purchase on behalf of shoppers. While AI streamlines shopping, physical stores will focus on human connection, discovery, and fulfillment, requiring retailers to assign each location a primary mission—convenience, discovery, or order pickup—to avoid inefficiency. Retailers risk failing if they spread resources too thin across multiple functions, though shopping centers may benefit from diversified tenant ecosystems. The shift highlights AI’s dual role: increasing operational efficiency while demanding retailers rethink store designs and worker roles. Cybersecurity and job displacement remain concerns, but AI is expected to drive higher-value in-store visits by automating routine tasks. Tom McGee, ICSC CEO, emphasized that AI enhances digital shopping but underscores the need for physical stores to deliver unique experiences. The report’s findings stem from surveys of 3,000 U.S. consumers and interviews with retail executives, revealing a structural shift toward AI-driven commerce. As consumers rely more on AI agents, stores will pivot to experiential and transactional hubs, balancing automation with human-centric services.