Tracy Hadden Loh is a fellow with the Anne T. and Robert M. Bass Center at the Brookings Institution. Jennifer S. Vey is a senior fellow and the Director of the Anne T. and Robert M. Bass Center for Transformative Placemaking at the Brookings Institution. The opinions expressed in this commentary are their own.

The last decade dramatically shook the retail sector. Almost 10,000 stores closed in 2019 alone.

Much of this has been blamed on the popularity of online shopping. But today's brick-and mortar-retailers are also grappling with a host of other challenges, including aging malls and fickle consumers who are demanding more from their shopping experience. While many retailers haven't been able to survive these changes, brick-and-mortar retail overall isn't dying — it's just entering a new era.

The United States has become vastly over-retailed, with estimates on retail space ranging from 23.5 to 46.6 square feet per person. This compares to just 2.4 square feet per person in Germany and 1.5 square feet per person in Mexico. Retail growth, financed by debt, has simply become overleveraged and unsustainable. The current store closures are a natural contraction of retail sprawl.

The first indoor, climate-controlled mall in the United States, Southdale Mall in Minneapolis, opened in 1956. This mall and its many successors — oriented around national retail chain anchors like Macy's and Lord & Taylor — opened as baby boomers were growing up, often decimating traditional downtown storefront retailers in the process. Like the generation that created them, these malls themselves have reached retirement age, giving new and old shoppers few reasons to patronize them over more convenient online options.

But some malls are finding new life by evolving from the traditional model. For example, the former Mercado Mall in downtown Phoenix is now part of Arizona State University's high-impact urban campus. Other malls are diversifying to reduce their reliance on anchor tenants and expanding their offerings to satisfy consumer desire for experiences , not just bargains. For example, the Southdale Mall now has an indoor soccer facility and is adding a coworking space.