Retail construction is undergoing a reset. After a year of contraction in 2024, the industry is slowly regaining momentum—but what’s being built, and how, looks very different from the retail development of years past. Across the U.S., developers are focusing less on large-scale malls and more on right-sized, flexible, and experience-driven spaces that reflect modern shopping behavior. Meanwhile, technology is being woven into these environments from the earliest planning stages—not simply layered on after the drywall is up.
The implications for IT deployments and operations are significant. Understanding where construction is headed is crucial to preparing for the technology demands that will follow.
A Market on the Mend—But Not on Repeat
Retail construction spending declined by more than 12% in 2024, reflecting a pullback amid high interest rates, cautious consumer spending, and inflationary pressures. But forecasts suggest a turnaround is ahead, with investment expected to rebound in late 2025 and continue into 2026. The increase, however, is not in traditional spaces. Enclosed malls and large-format shopping centers continue to see declines in both new builds and renovations.
Instead, developers are redirecting capital toward more efficient formats: open-air retail centers, grocery-anchored strips, and mixed-use projects that combine residential, hospitality, and service-based retail under one roof. These developments reflect an acknowledgment that the future of brick-and-mortar retail is not just about commerce—it’s about community engagement and convenience.
From a technology standpoint, these changing formats require more nimble planning. What works for a 120,000-square-foot anchor store may not translate to a 15,000-square-foot urban concept. That shift affects everything from infrastructure to bandwidth to how technology is supported across multiple store types.
Technology at the Core, Not the Finish Line
In parallel with the change in physical formats, construction methods themselves are evolving. Robotics, modular construction, and even 3D printing are compressing build timelines. AI-based forecasting tools are being used to anticipate project delays and streamline procurement. These innovations are helping brands get to market faster and respond more quickly to consumer and tenant demand.
But speed is only part of the story. These new methods are also enabling a greater degree of integration between the physical and digital store environments. Smart buildings—outfitted with IoT sensors, energy management platforms, and automated systems—are becoming the norm, not the exception. These systems monitor everything from lighting and HVAC to foot traffic patterns and refrigeration status, feeding valuable data back into business and facility operations.
For IT leaders, this means technology infrastructure must be part of the construction conversation from day one. The complexity of these systems requires coordination with architects, electricians, and general contractors—not just store operations teams. Delays, gaps, or mismatches in planning can lead to expensive retrofits or performance limitations down the road.
The Rise of Small-Format Stores and Hybrid Experiences
Big box retailers are downsizing—and they’re not just trimming inventory. Macy’s, Kohl’s, Best Buy, and others are actively opening smaller-format locations that emphasize curated product selections, click-and-collect functionality, and ecommerce integration. These stores are often one-fifth the size of traditional locations, designed for speed, localization, and omnichannel consistency.
This trend is not just about saving on rent or labor. It’s a strategic response to evolving consumer behavior. Today’s shoppers may start their journey online, browse in person, and complete their purchase via mobile—all within the same brand ecosystem. Smaller-format stores serve as the connective tissue in that experience: local hubs that allow for pickup, returns, fast delivery, and digital interaction.
From a technology perspective, these stores punch above their weight. The tech footprint—POS systems, kiosks, digital signage, mobile ordering, wireless infrastructure—must support full omnichannel functionality in a condensed space. The network needs to be resilient, and the hardware must be adaptable enough to evolve with the store’s role in the customer journey.
Redevelopment Over New Construction
With new retail starts at a 15-year low, the emphasis is shifting toward redevelopment and adaptive reuse. Vacant malls, aging office parks, and abandoned big box sites are being converted into mixed-use spaces or repurposed for retail, healthcare, or service-oriented uses. While this approach is often faster and more sustainable than ground-up construction, it brings unique challenges.
Older buildings often require significant infrastructure upgrades to support modern technology. Power distribution, cable pathways, and HVAC systems may need to be reengineered. Ceiling heights and wall layouts can constrain how digital signage, security cameras, or access points are installed. And in many cases, deployment teams are working around operational tenants or staggered timelines, requiring phased or after-hours installation.
In our experience, reformatting projects demand a more agile and flexible approach to technology planning. One of our clients is currently adding three to five digital displays for new stores and remodels, however, there isn’t yet a standard for which stores receive them. This is causing some confusion across the GCs and trades.
Teams that understand the nuances of working in legacy spaces—and can coordinate closely with contractors and property managers—are better equipped to deliver clean, future-proof solutions without disrupting business operations.
Blurring the Lines: Where Retail Ends and Experience Begins
Blurring the Lines: Where Retail Ends and Experience BeginsOne of the most defining shifts in today’s construction pipeline is the move toward experience-based retail. Fitness centers, medical clinics, salons, restaurants, and entertainment concepts are increasingly taking over space once reserved for traditional merchandise retailers. This shift reflects a broader trend: shopping centers are evolving into mixed-use lifestyle destinations.
These hybrid spaces have different technology requirements. A restaurant tenant may need robust kitchen display systems and high-speed internet. A health clinic might require secure patient data transmission. A fitness brand could lean heavily on AV and wearables. The diversity of use cases means technology deployment is no longer one-size-fits-all, even within the same property.
From planning to execution, today’s requirements mean balancing some level of standardization with customization. That’s particularly true for brands expanding across both traditional and nontraditional retail environments—they need consistency without rigidity.
Looking Ahead: What These Trends Need from Tech Leaders
Retail construction is no longer just about square footage—it’s about function, agility, and connectivity. As formats change, so do the technology decisions. The deployment environment is more variable, the technology stack more integrated, and the expectations around timing and coordination more compressed.
For IT and operations leaders, this means getting involved earlier in the process. It’s no longer sufficient to wait for handoff from construction. Tech must be scoped alongside the site plans, coordinated with contractors, and ready to scale across formats.
It also means staying informed. The more technology teams understand about construction trends, the better positioned they are to anticipate needs, reduce issues, and help their organizations deliver on what the physical store is increasingly being asked to do: serve as a local, branded, digital-physical touchpoint in the broader customer experience.
If your team needs help reformatting its brick and mortar stores, contact us to schedule a conversation. Worldlink has worked with several brands as they modernize their store formats.