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Malls have rebounded thanks to an unlikely source: Gen Z

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Malls have rebounded thanks to an unlikely source: Gen Z

Gen Z hasn’t crossed over into the metaverse just yet.

Retail experts say these young shoppers have helped malls bounce back after the downturn brought on by the pandemic, in part because the digital space has turned Gen Z into a generation that expects instant gratification. The immediacy of touching, trying out and buying products may be the thing driving them to physical stores.

“This digitally savvy generation is used to having things immediately that they can download, access, watch,” said USC Marshall School of Business Assistant Professor Stephanie Tully. “And so from that perspective, the desire to get physical products immediately makes sense and would explain interest in brick-and-mortar.”

Gen Z — people from the ages of 16 to 26 — prefer in-person as much as online shopping, if not more, according to a 2023 report by the International Council of Shopping Centers. According to the trade group, about 97% of survey respondents said they shop at brick-and-mortar stores; 95% said they shop online for the convenience.

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“Gen Z shoppers are bringing back the mall shopping center experience,” said Kristin Grove, senior vice president of national retail leasing at the global real estate firm JLL. “They want a sense of community. They want to bridge the gap between the social media that they’re doing, and meet and shop in-person.”

The trade group’s study didn’t inquire about other generations’ shopping habits. But a 2022 report by the marketing agency CM Group, now Marigold, and the retail consulting group F’inn found that 47% of Gen Z respondents said they prefer to shop in store over online — more than any other generation.

“Despite being the first digitally native generation, virtually all Gen Z customers shop in-store and prefer physical retail at similar rates to previous generations,” Ali Esmaeilzadeh, executive vice president at Brookfield Properties, said about shoppers at that company’s Glendale Galleria.

There is good reason for malls to bank on Gen Z, which makes up 40% of global consumers with spending power clocking in at $360 billion.

For 23-year-old Nicole Tan of West Hollywood, online shopping is for browsing while in-person shopping is for buying.

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“I like to try things on,” she said as a song from the K-pop group New Jeans played in the background at the Westfield Century City shopping center. “If I see ads on social media and there are sales online, I’d maybe buy stuff online, but I usually like to shop in-store.”

Teens have long been the lifeblood of malls, with films such as “Fast Times at Ridgemont High” and “Clueless” depicting shopping centers as a beehive of excitement and activity. But the popularity of online shopping and recent economic turmoil took a toll, with many retail centers either closing altogether, being converted into office space or apartments or taking on unconventional tenants such as grocery stores.

With the easing of pandemic restrictions and the slowing of e-commerce, some malls have been revived by targeting teens and young shoppers who want more than just a place to spend money: a place to hang out, dine and meet friends.

And then there is the loneliness factor.

“There’s a lot of data showing that Gen Z is a particularly lonely generation and that it needs more social interactions,” Tully said. “[Gen Z] would benefit probably more so than other generations from going out and having those experiences in-person.”

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According to the International Council of Shopping Centers survey, 60% of Gen Z respondents said they would rather spend their money on experiences than material items, which means that refining the in-person shopping experience is front of mind for retailers.

Westfield Century City and South Coast Plaza in Costa Mesa, among other major Southern California malls, are focused on maximizing “hang time,” Grove said — the amount of time customers spend there.

“It is usually a combination of not just retail … but also great food and beverages and opportunities to do things like [take care of] daily needs,” she said. “You’re multitasking and doing some other things, not just shopping.”

Louis Schillace, senior general manager of Westfield Century City, said that in addition to shopping outlets, the mall houses a gym, an escape room, movie theaters and fine dining restaurants — keys to attracting diverse visitors.

“When you think about Gen Z and how they use the space, it gives them another opportunity to choose this space as their place to go for a night out,” he said.

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Tan, who works at a talent agency across the street from Westfield Century City, said she often goes there not to shop, but to grab dinner with a co-worker or go for a walk.

“I do more leisure non-shopping things at the mall,” she said.

About 70% of Gen Z survey respondents said that retail centers and stores offer fun places to gather, according to the ICSS report.

The malls that are thriving have the financial resources to reinvest in and renovate their spaces to meet the evolving demands of today’s shoppers, according to a 2023 Coresight Research report. And malls that cannot make those investments are suffering for it, experts say.

Shuttered stores populate the Puente Hills Mall, best known as the Twin Pines Mall from the 1985 movie “Back to the Future,” in the San Gabriel Valley. And the University of California recently announced plans to acquire the former Westside Pavilion, once a popular L.A. mall that was later converted to office space.

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Tully said turning malls into multipurpose destinations where Gen Z flocks will become increasingly important for their survival as online retailers offer shipping, delivery and return options that could disincentivize people from going to the mall to shop.

“There could be drones that deliver things to us,” she said. “Who knows what is going to transform with AI? But one thing you will not be able to have [delivered] are those [in-person] types of experiences.”

Successful shopping centers also must bring in the kinds of brands that are trendy among Gen Z shoppers, as well as socially and environmentally conscious retail stores those customers are likely to support, Grove said.

Gentle Monster — a South Korean sunglasses brand that grabbed the attention of Gen Z in recent years thanks to collaborations with the likes of K-pop superstar Jennie of Blackpink — opened a boutique at South Coast Plaza in late 2022.

Hundreds of shoppers flocked to the opening of America’s first physical store of Princess Polly, an Australian fast fashion boutique popular among Gen Z and millennials, at Westfield Century City in September 2023.

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“When we open a store like Princess Polly and we see the reaction, it was clearly generational,” Schillace said. “When we saw the lines of 500 Gen Z-ers waiting for the doors to open, the connection was there.”

More than half of Gen Z survey respondents said they were interested in supporting brands that prioritized mental health, according to the ICSS report. About 47% said they cared about brands that address sustainability and racial and gender equity.

“I try to shop small, independent brands or brands in line with my ethos,” Tan said.

Brands such as Victoria’s Secret and Abercrombie and Fitch went through highly publicized reckonings over body and racial inclusivity in the 2010s as maturing Gen Z students watched from their various social media platforms. As these legacy brands undergo major rebranding to appeal to the new generation of shoppers, those preaching body positivity and diversity such as Fenty Beauty, American Eagle Outfitters Inc.’s Aerie brand and Skims have found commercial success.

“I think that’s all attributable to a really educated new generational shopper,” Grove said. “That’s the future.”

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Paramount’s Delrahim slams ‘fear-mongering’ and partisan politics clouding Warner Bros. deal

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Paramount’s Delrahim slams ‘fear-mongering’ and partisan politics clouding Warner Bros. deal

Paramount Chief Executive David Ellison has been circling the globe, meeting government regulators who will ultimately decide the fate of his controversial $111-billion takeover of Warner Bros. Discovery.

Last week, Ellison spent two hours answering questions from U.S. Justice Department antitrust lawyers in a bid to secure a key government approval — one that few people believe is in doubt because of President Trump’s strong support of tech billionaire Larry Ellison and his son’s ambitions to amass more power.

Throughout his travels, David Ellison has been accompanied by a savvy wingman: Makan Delrahim.

Delrahim, Paramount’s chief legal officer, served as the nation’s top antitrust regulator in the Justice Department during Trump’s first term. The 56-year-old Iranian American, who grew up in Los Angeles, is the architect of shrewd moves that have brought Paramount within reach of its blockbuster merger that would redefine Hollywood.

Politics have permeated the process — even before Trump announced he would get involved. Opponents have been suspicious of the Ellisons, given the family’s ties to Trump and programming changes to redefine Paramount’s CBS, including last month’s departure of late-night comedian Stephen Colbert and a shakeup at “60 Minutes,” CBS’ newsmagazine.

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Buying Warner Bros. Discovery would give the Ellisons control of both CBS News and CNN.

Paramount’s bid for Warner Bros. has sparked dread in Hollywood for another reason, too: Thousands of jobs already have vanished through a string of media mergers.

More than 5,000 artists and entertainment industry workers have signed an open letter, calling on California Atty. General Rob Bonta to try to block the deal on antitrust grounds.

In an interview with The Times, Delrahim responded to concerns and criticisms. This interview has been edited for length and clarity:

Where does the regulatory process stand?

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We are still going through the regulatory approval process. We actually started planning for the regulatory approval filings last summer. We knew we were going to be pursuing this transaction but it took a few months longer to sign the transaction than we thought. There were some interveners [Netflix, Comcast], but we planned ahead.

Do you have a commitment from Trump or his administration that you’ll get a thumbs up?

There are no deals with the president. We have a deal with the Warner Bros. shareholders. We’ve submitted [applications] to the governments of Europe, Canada, U.K. and the U.S., and that’s where it is.

You got a head-start because you filed a regulatory approval in December — months before Paramount had a deal with Warner. Why so soon?

We were always very skeptical [the Netflix deal] would ever go through. The only way to really show the [Warner] board that our deal would get through — because it doesn’t have antitrust problems — was to move as fast as we could.

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One of the benefits being a former [DOJ] enforcer and having a team of outside lawyers who are also former colleagues and enforcers was that we anticipated what the government would ask for. Those were questions that we would have asked, and so we provided those answers.

Your timeline is aggressive. Some suggest Paramount wants this deal done before the mid-term elections.

I don’t think it’s aggressive. It has nothing to do with the midterms. The midterms do not change the officials at the Justice Department or the FCC — we have that minor application there. The midterms have no effect on the European Commission or anybody else. We’ve been very transparent and proactive with members of Congress and with the state attorneys general and the federal authorities.

Are you preparing to defend a potential antitrust challenge from Atty. General Bonta?

Well, no matter what field you’re in, whether it’s antitrust or whether you’re preparing for a football game, you always prepare the best you can for the worst, and you hope it never gets there. So, we’re preparing for challenges from anybody and everybody. But I don’t think any serious antitrust enforcer who looks at the facts, the law, the economics of this transaction will see an antitrust violation.

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Why are you so confident?

There’s no element of this merger that is anti-competitive. Once you look at it, it’s incredibly pro-competitive. It increases output, it increases jobs, and it lowers the cost to the consumers. If you actually try to block this deal, you’re going to harm consumers, you’re going to harm creative talent, because you’re going to harm the creative ecosystem — the vision that David [Ellison] is trying to deploy here. It’s transformative from the efficiencies that it creates.

David Ellison has promised to release 30 films a year. Was that commitment to show that this merger will not be a repeat of Walt Disney Co.’s 2019 purchase of Fox?

I’m quite familiar with that one because I was at the Justice Department and reviewed it. Disney-Fox was a transaction with a different thesis. Disney wanted to get into streaming and they wanted to get scripted series. It wasn’t about studios trying to increase output.

Our transaction, as David has described, is motivated to create more content to feed the theaters, then streaming. We have a natural economic incentive to create more content. We’ll still be in fourth place after this transaction on the streaming side — almost half the size of Netflix.

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David Ellison hasn’t made any commitments on the television side or pledged pledge to keep the various TV studios intact. Why?

I don’t think there’s much of an overlap on the television studios. Look, you have incredible studios in HBO, Warner Bros. Television, certainly our own studio. We’re not paying money to limit supply. It’s the exact opposite.

There is overlap between CBS News and CNN. How are regulators looking at that issue?

We’re very proud of CBS News and hopefully CNN, post-transaction. There is very limited overlap. Why? Because CBS News only airs a few hours a week of programming whereas CNN is 24/7, and it has international reach.

Antitrust regulators are going to see that it’s going to create synergistic effects. You might be able to cross-program and more people will be exposed to the incredible programming of CBS News. They’ll benefit from each other’s independent strengths.

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During the first Trump administration, you said merger conditions were problematic because it’s difficult for the government to enforce behavioral remedies. Has your thinking changed?

No, I’ve been quite consistent. If there’s an antitrust problem, you need a divestiture [selling assets]. I don’t think there’s a remedy needed in this transaction. But having said that, we’re happy to engage with regulators to discuss where they see a problem and a possible solution. We’re always wanting to engage in constructive dialogue.

Would Paramount spin off CNN?

I don’t see that. I can’t see any antitrust reason to do so. That would be a weaponization of the antitrust law, and that would not be appropriate.

Many people in Hollywood view the merger with trepidation because of the prospect of more job losses. Others see it through a political lens. How do you evaluate the politics?

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Politics is part of life. It’s part of the beautiful process of democracy. Generally, we are very empathetic to the folks in Hollywood, but this transaction will actually create more and better and exciting jobs. David is an absolute lover of films; he’s a filmmaker himself. For the first time, you are getting an owner who comes from the creative side.

Let’s be honest. There’s a lot of fear-mongering, particularly from people in Washington, D.C. They are running a political campaign. Some of these people are trying to inflict harm on this transaction really because of their own antisemitic views. Regulators and law enforcement officials will see right through that.

Do regulators share others’ concerns about the merger debt — $79 billion — for the combined company?

Some regulators appropriately have asked about it. They say: ‘This is what we have heard, that you guys are not going to be around because of this debt,’ which is just silliness. David and his family are owner-operators. They’re not rented CEOs. They have over 50% ownership. They put their money at stake and my money is on them.

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Move over, Grogu. Internet culture soars as ‘Backrooms’ and ‘Obsession’ top the box office

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Move over, Grogu. Internet culture soars as ‘Backrooms’ and ‘Obsession’ top the box office

Internet culture is showing up in a big way in theaters, as low-budget horror films “Backrooms” and “Obsession” led this weekend’s box office and beat out big franchise films like “Star Wars: The Mandalorian and Grogu.”

A24’s “Backrooms” topped the charts with $81.5 million in the U.S. and Canada in its opening weekend, according to studio estimates. The film is directed by 20-year-old YouTuber Kane Parsons, who based it on his internet series of the same name.

“Backrooms,” which reportedly had a production budget of about $10 million, stars Chiwetel Ejiofor as a furniture store owner who finds a mysterious portal in his basement. The film made a total of $118 million worldwide.

In second place was Focus Features’ “Obsession,” which hauled in $26.4 million in its third weekend in theaters, up 10% from the previous weekend’s total. The film, which had a production budget of less than $1 million, has now grossed $104.7 million domestically for a global total of $148 million.

“Obsession” director Curry Barker is also known for his YouTube sketch comedy channel.

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The success of two YouTube-native filmmakers at the box office indicates the growing power of the platform — and online culture as a whole — in attracting audiences to cinemas.

Walt Disney Co. and Lucasfilm’s “The Mandalorian and Grogu” fell to third place this weekend with a domestic gross of $25 million. Lionsgate’s musical biopic “Michael” ($11.7 million) and Sony Pictures’ family comedy “The Breadwinner” ($7.5 million) rounded out the top five at the box office, according to Comscore data.

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The robot puppeteers of Silicon Valley teaching humanoids how to make your morning coffee

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The robot puppeteers of Silicon Valley teaching humanoids how to make your morning coffee

Fernando Flores can spend eight hours a day pouring the same cup of coffee.

He is not a barista. He’s a robot puppeteer, trying to train humanoids.

He manipulates mechanical arms remotely, using hand and arm sensors to make them pick up a pot of coffee, pour it into a mug and put the pot back in the coffee maker. Flores checks for spills, then empties the mug back into the pot by hand and does it again — hundreds of times.

“The repetitiveness, it can cause some discomfort,” said Flores, who has the title of senior robotic pilot at San Francisco startup Encord. “It becomes second nature after a while.”

This Sisyphus of Silicon Valley is on the front lines of a rapidly expanding industry of robot trainers, preparing to teach and operate the army of humanoid robots scheduled to march out of nearby factories in the coming year. Encord practices, records and sells data about movement to the companies racing to bring humanoids to homes, offices and factories.

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If tech companies’ optimistic plans are to be believed, a swarm of American-built robots is about to hit the market.

Tesla’s Fremont factory stopped car production this year to make way for production lines for its Optimus robots, with unbelievable plans to ramp up capacity to 1 million units a year. Palo Alto-based 1X Technologies is already manufacturing its 66-pound, 5-foot-6 humanoid named Neo at its factory in Hayward. The company received 10,000 preorders, and its first shipment is expected later this year. Figure AI’s humanoid factory in San Jose has increased its manufacturing capacity to produce one Figure 03 robot an hour, with the goal of producing 12,000 a year.

Fernando Flores demonstrates the articulation of a robot performing a whisking motion at Encord on May 21.

(Paul Kuroda / For The Times)

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Goldman Sachs projects the global market for humanoids could reach $38 billion by 2035.

The AI of these humanoid robots needs an immense amount of data on human movement. How humans write, speak, code and compose was easily scraped off the internet, but the bots need more information to master how to stand, step, lift, squeeze, pour and perform other physical movements. That is where companies like Encord come in.

The $10 billion invested in robotics in 2026, according to CB Insights, has spawned an industry focused on training robots. Initially, that meant humans strapping iPhones to their foreheads, recording actions like cooking, cleaning and performing household chores. That, however, doesn’t capture the exact torque, force and grip required for a robot hand to work flawlessly.

Now, humans are directly guiding robots through expensive rigs that let them control the robots’ movements. Data collected using robot arms offer richer insights into motor skills and object manipulation. Encord charges clients up to $1,000 per hour for training data.

The information gathered from trainers controlling robots is “super important to bridge the next level of learning,” where robots will learn to correct mistakes and do the chores on their own, said Vineeth Velmurugan, head of robotics learning at Encord.

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The company is already working with some of the top companies in robotics, but said it couldn’t share most names. Among the clients it could mention were Toyota Research Institute and Weave, which already has laundry-folding robots in a few homes.

Brian Gonzalez pulls an ethernet cable using a robotic arm at Encord

Brian Gonzalez pulls an ethernet cable using a robotic arm at startup Encord on May 20.

(Paul Kuroda / For The Times)

Many of the new robotic data companies are focusing on industrial use cases. Robots can perform better in a structured, predictable environment, like a factory or warehouse.

Home tasks are tougher, as layouts and tasks are more varied and messy. While many bots have mastered walking, they still struggle to open doors, fridges and washing machines smoothly. They don’t know where or how to grasp a doorknob, handle or door edge or how much pulling, pushing or twisting force to apply.

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Flores has mastered making the robot arms pour coffee, but he still often spills. When that happens, he deletes records of the attempt.

“Typically, we don’t want any mistakes,” he said. “If we have more than three consecutive mistakes within a 15‑second window, that’s not going to be good data.”

Inside Encord’s test facility in Hayward, it has replicated a standard American home with a fully furnished living room, kitchen and bathroom.

In the living room, a pilot rearranges an untidy study desk. She first scatters AA-size batteries, pens and scissors on the table, and walks back to the nearby control rig to make the robot arms place each one inside the tray of a desk organizer.

Depending on the day’s training, the pilots could be opening and closing refrigerator doors, whisking liquids in a bowl, sorting silverware or turning a water faucet on and off over and over until the robot arms get it right.

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Cortney Weintz, left, and Tony Schiller record data with cameras at Encord.

Cortney Weintz, left, and Tony Schiller record data with cameras at Encord.

(Paul Kuroda / For The Times)

In another corner of the facility, people wearing smart glasses place and pick up playing cards and sort plastic plates by hand, collecting first-person videos.

One key skill for the coming bot invasion: plugging in cables.

Companies want robots that can crawl into duct spaces, identify ports and plug cables to help build the massive data centers needed for AI. Encord replicated a real data center server rack, where an operator inserts blue cables into penny-sized sockets all day.

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Many companies have entered this business. Meta-backed Scale AI and Palo Alto-based Micro1 are major players in the space. China has more than 40 state-owned robot data-collection facilities where hundreds of on-site humans mimic train bots how to move in the real world.

In Watertown, Mass., Tutor Intelligence has set up a 100-robot facility dedicated to harvesting movement data. Its robot arms, which are being trained to do factory work, are controlled by a human team split across Mexico, the Philippines and Boston. This is in part to train its robot, Sonny, which will hit the market later this year.

Elaine Batchlor sorts screws and bolts with a robot in a mockup at Encord.

Elaine Batchlor sorts screws and bolts with a robot in a mockup at Encord.

(Paul Kuroda / For The Times)

“We built the Data Factory to bootstrap the initial intelligence for the Sonny robot, so that we can begin to deploy Sonny into the field,” said Josh Gruenstein, co-founder of Tutor. Ten of its remote operators are based in Boston, and the rest are international.

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Remote operation is emerging as an integral part of the humanoid robot business. Employing teleoperators in countries where wages are much lower than in the U.S. could, in theory, mean a robot controlled by a human in another country could do a task at a fraction of the cost of having an American do it.

This month, a humanoid robot cleaning service in San Francisco called Gatsby completed a robot cleaning of a U.S. home using a teleoperator in Mexico.

The technology is still evolving, said Aron Frishberg, co-founder of Gatsby, but being a first mover means Gatsby is getting more training.

“There’s obviously stuff that goes wrong,” he said. “It’s really hard to get precise hand movements or arm movements and grab something.”

Encord co-founder Ulrik Hansen said it will be setting up a teleoperations center in its Hayward facility in the next three months. Even as more robots are deployed and master increasingly sophisticated tasks, they will still need humans to occasionally take control remotely.

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“They will need some exception handling when they get things wrong,” he said.

Hundreds of teleoperators will learn where the system succeeds, where it breaks and step in when needed. Once those patterns emerge, Hansen said, they can move teleoperations to cheaper locations abroad or to the Midwest.

Back in Hayward, Flores created new coffee-pouring challenges for his robot arms. He changed what was on the counter around the coffee maker and moved the mug to different spots. It takes a lot of know-how to puppet and train a robot, he said.

“A lot of people would (guess) this might be easy, this is dumb,” Flores said. “There actually is thought here. There actually is critical thinking.”

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