1-3 pages Marketing Assignment article reading and analysis DUE in 8 hours

Mr. Freeman, 76, owns Bellevue Square, a multilevel mall east of downtown Seattle, which features scores of restaurants, hotels, department stores and novelty shops. Foot traffic is up 21% this year, Mr. Freeman says, and he is planning a multimillion-dollar expansion—a bet that even in the age of Amazon, Americans won’t give up in-person shopping.

Mr. Freeman’s bullishness on brick-and-mortar makes him an outlier. This past week Westfield Corp., which operates some of America’s biggest high-end malls, sold out to a European rival, a move said to have been motivated by brutal e-commerce competition. “If Amazon were an animal it would be an octopus,” a Journal tech reporter recently observed—its tentacles reaching just about everywhere in the consumer economy, from products like pharmaceuticals, groceries and cars to services like housecleaning. A CNN report recently said that with anchor stores like JC Penney, Sears and Macy’s shutting down, “America’s malls are rotting away” and “the worst is yet to come.” But not at Bellevue Square, where Mr. Freeman says retailers are lining up to pay $100 a square foot for store space, about three times the industry average.

His company is family owned and has employed tens of thousands of people over three generations. It was Mr. Freeman’s grandfather who, 71 years ago, bought 10 acres in Bellevue, a town of 6,000, and developed 16 stores. Mr. Freeman’s father turned it into a multimillion-dollar shopping complex before handing it off to Kemper, who has expanded it in what is now a city of 140,000 across Lake Washington from Seattle.

Early this month Mr. Freeman and I stood on the roof deck of the new Westin Hotel (which he owns) and gazed down at tens of thousands of shoppers lining the four-block stretch of Bellevue Way that has become known as Snowflake Lane. At 7:00 each night during the Christmas season, artificial snow starts falling as a light show blankets the sky in brilliant colors. Down the way comes a Rose Bowl-like parade of floats, drummers and sleigh-riding Santa Clauses. “It’s the biggest outdoor Christmas celebration in the country, and we do it every night of the week,” Mr. Freeman says with glee. “It’s the kind of thing that brings people to the mall. I pay for it all myself.” Over the holiday season he estimates the parade attracts some 500,000 customers, who shop or eat dinner in one of the mall’s dozens of restaurants.

Mr. Freeman insists that reports of retail’s demise have been greatly exaggerated, and he’s prepared to make the case with numbers. He tells me that a 2016 government report totaled retail sales (excluding restaurants, gasoline and automobiles) at $3.4 trillion nationwide. He asks me to guess how much of that was online. I say 15%. “No,” he says, “it’s 11%, or $400 billion. And the online sales is less than 10% when including restaurants. Now, it used to be 3%, so it’s growing, and it’s not capped. But it’s still only a fraction of the business. It may someday go to 20% or 30%, but it’s not going to take over the world.”

Mr. Freeman concedes that shopping centers are tremendously overbuilt in America, but he says that’s owing to a real-estate frenzy that long preceded the online-sales phenomenon. By his estimate, the U.S. has at least 50% more retail space per person than Canada—and Canada’s figure is 50% higher than Germany’s. “It’s Germany that has it about right,” he concludes—which would mean the optimal amount of retail space is less than half the current American total. “I’ve traveled all over the country,” Mr. Freeman says. “The challenge is to find a place where retail isn’t overbuilt.” If he’s right, a severe real-estate contraction is coming, and weak stores and malls will get eaten alive. Can Macy’s survive? Probably not: “They are run by bean counters”—lawyers and accountants, not entrepreneurs.

How can a retailer flourish in such a daunting environment? By providing “emotional fulfillment,” which is one of Mr. Freeman’s favorite phrases. He means the joy customers take in seeing, touching, sniffing and testing the product before they pull out the credit card. A computer can’t match that experience, Mr. Freeman insists: “We are social animals. We aren’t robots who are going to make all our purchases from robots.”

Somewhat counterintuitively, he argues that e-commerce is “not our enemy” but is becoming complementary to retail. Here’s his challenge to anyone who thinks digital sales are set to crush the old analog kind: “Explain Blue Nile. They were one of the first to sell online jewelry. Blue Nile comes in and blows the door off as one of our most successful stores. Who else? Apple! You can buy your phone online, and they can ship it to your house. But the Apple Store almost everywhere does giant business. Microsoft—same thing. Peloton is another one. They make exercise equipment and have just opened a store next to Nordstrom, highest sales in the country. They’re killin’ it.”

With a twinkle in his eyes, he tells the story of Bellevue Square’s 1,800-square-foot Tesla showroom. Tesla is largely an internet-based company, but it helped produce one of the biggest days in the mall’s history when Mr. Freeman says it sold close to $16 million worth of cars in 12 hours. “There were lines 10 blocks long, and the average person waited five hours,” he recalls, “the way people used to wait outside stores on Black Friday. There was even a sign in front of the store that read ‘limit of two cars per customer.’ ”

If that isn’t enough, he adds: “Guess what’s one of our most successful stores we just opened up three months ago? Amazon. They already mastered online book sales. Why are they creating a physical presence? Because they know they need to connect and fuse with you as a consumer.” That’s what he means by emotional fulfillment.

He sketches out a strategy for retail in the digital age. It starts with making the mall an appealing place to visit. Parking is free, he says, and the stores are full of helpful employees. “We tell our retailers that one of the primary value added of retail shopping is the expertise that the salesclerks can offer customers,” he says, “They better be knowledgeable about what they are selling, or people will go online or to a discount store.” He urges his tenants to pay well more than the minimum wage to attract better employees, and he says most of them do.

Mr. Freeman thinks too many retailers have ignored the time-honored principle that the customer is king. He spends an hour or two a day walking through stores—“it’s my daily exercise routine”—and watching and chatting with customers. “You can’t believe the kind of intelligence I pick up from these folks,” he says.

Just as Amazon is expanding into services, shopping centers are branching out into sports, exercise and entertainment. “We have billiards, and Lucky Strike bowling,” he says. “Top Golf simulated driving ranges is the latest big thing out there.” For decades Bellevue Square has hosted one of the largest art fairs on the West Coast. “All of these activities are social experiences that are big hits with millennials,” the critical age cohort if malls are going to survive.

Mr. Freeman has been working since age 9 and has been in sales for just short of 50 years. Would he consider going the way of Westfield by selling out to a conglomerate? “Are you kidding?” he asks, “I wake up every morning like it’s Christmas Day. Even those days I’m getting the crap kicked out of me, I always love the interaction with the tenants, the employees and the customers. You couldn’t blow me out of here with dynamite.” Are shopping malls here to stay? Mr. Freeman certainly is.