Yet these prophecies of doom turned out to be all smoke and no fire — the 2026 landscape tells a very different story, one where retail has proved to be a hot commodity. Instead of withering away, it has evolved into something digital cannot replicate: experiences, community and emotion.

Across the Valley, developers and brokers agree, retail is no longer merely a place to buy. It’s a place to be.

From transactional to transformational

Since the end of pandemic-era stay-at-home orders, communities have been searching for ways to create the “new normal.” Amazon and other online marketplaces further entrenched themselves as household staples, while Target, Walmart and the local shopping mall became once-in-a-while trips.

But as the years tick by since those “unprecedented times” what many people feel is missing isn’t just the act of shopping, it’s the environment where the shopping happened. Sociologists have a name for what vanished. They describe three types of spaces: first spaces, like home; second spaces, like work or school; and third spaces, the environments where people can hang out without obligation.

It’s the coffee shop you stop at without planning, the market where you bump into neighbors, the shopping center where you browse, grab a bite or simply exist among other people. During the pandemic, those third spaces fractured. Now, communities are actively searching for them again.

Industry professionals recognize this shift, and they’re designing retail spaces specifically to fill that void. More than ever, they say, consumers aren’t just looking for places to make purchases.

That shift is reshaping everything from tenant mixes to architectural design. Retail centers that once relied solely on anchor tenants now compete on ambience. Everything from lighting, to landscaping, to music, to placemaking, the entire picture matters now more than ever.

Emma Barreca, associate broker and project manager at Diversified Partners specializing in Phoenix’s urban retail, has witnessed this realignment firsthand.

“Everything is more tailored to the user’s experience. Everyone wants the Instagrammable moment, the thing that makes people want to come back,” she says.

Social media and physical retail have developed a symbiotic relationship. A photo-friendly backdrop can measurably elevate a business. Retail and dining marketing is no longer nice words or pretty pictures manufactured by the business, it’s visual appeal and first person experience.

Restaurants and stores are now designed as sensory moments and shopping centers are the new space for people of all ages. As Patrick McGinley, president of management services at Vestar, explains, “As soon as you drive into our shopping centers, we want you to feel, ‘Oh, wow, this is the best center. I want to stay here.’”

Memory-making as strategy

If the old goal of retail was to drive foot traffic, the new goal is to keep people onsite, and keep them returning.

Vestar has become the poster child in this approach. At Desert Ridge Marketplace, the company runs concerts, seasonal block parties, dog rescue events, tree lightings, immersive pop-ups, charitable car washes and the now-famous sip-and-stroll program.

“We constantly keep it fresh,” McGinley says. “Diversity of experience is important.”

These activations aren’t gimmicks, they’re ROI drivers. A Hello Kitty pop-up drew 2,000 guests to a Vestar property. Philanthropic events raised hundreds of thousands of dollars. Most importantly, they elevate tenant sales and loyalty.

As the newer, more experience-driven retail destinations grow in popularity, traditional big-box tenants will still remain essential. Their dynamic however, has changed. These traditional stores now thrive thanks to, not in spite of, their neighbors.

“They benefit from the increased traffic we are working to provide,” McGinley adds.

The developer’s role now extends beyond leasing: creating safe, well-lit, aesthetically elevated spaces that support both national anchors and emerging regional concepts.

“Customers visit for family-friendly activations, then they can stop at Target or do a curbside pickup. It’s a nice blend,” he continues.

This change in mindset and rethinking of retail has made waves in redevelopment strategies across the Valley. With legacy malls struggling to adapt to the new demands of guests, many projects are being rebuilt from the ground up.

“Trying to redevelop without starting over is extremely challenging,” Barreca notes. “The best way is either new development or complete remodeling.”

From the tear-down-and-rebuild approach at Paradise Valley Mall to the full rebirth of Metrocenter, developers are prioritizing cohesive, future-ready environments with adaptable footprints, generous parking and integrated dining and entertainment.

The demand driving these changes is rooted in demographics. Phoenix’s explosive population growth continues to shape retail strategy.

Scottsdale alone is seeing restaurants gross $18 to $22 million annually — numbers once rare in the Valley.

As McGinley notes, communities evolve, so shopping centers must evolve too. Desert Ridge started as an entertainment hub for kids. Two decades later, those kids are adults, and the center now leans into speakeasies, upscale dining, bars and a more mature aesthetic. “We have to grow up with the community.”

Measuring success

Sales per square foot still matter, but experiential retail demands new metrics:

• Dwell time
• Visit frequency
• Traffic lift after events
• Tenant sales improvements
• Community engagement
• Tenant turnover

To track all of this, more companies are relying on tools like Placer.ai.

The platform uses anonymous cell phone location data to show how people move through real-world spaces like shopping centers, restaurants or stores. It doesn’t just know how many people visited, also known as “events,” it tracks where those people likely live or work, how long they stayed, how often they come back and what other places they visit in the same trip.

It also provides general estimates about who those people are, including things like age range, income level or whether they’re families or individuals. All of this gives developers and retailers a much clearer picture of who their visitors are and how they use a space — not just for one visit, but over time.

“Every event is evaluated for dollars spent, traffic generated and tenant feedback,” McGinley explains.

Looking ahead

All three experts agree that the future of retail is about curation, community and customization.

Barreca sees a move toward less “cookie-cutter” centers, built for people who want to linger and gather.

McGinley notes that retailers must keep opening stores, and with little new supply built in the past decade, “retail development is a huge opportunity.” Vestar alone expects to deliver four to five million square feet in the next five to seven years, including Verrado Marketplace and several East Valley lifestyle centers.

The Valley proves that retail hasn’t died, it’s transforming into a social, sensory, community-driven ecosystem. As McGinley sums it up: “It’s a corporate mandate for us — be the community gathering place, bring people together.”

In 2026, community is what retail is all about.