(FORTUNE Magazine) – Among the economic victims of the new do-it-yourself movement are many of the old-style regional shopping malls that dot America's suburban landscape. The assiduously self-reliant have less and less use for these full-price retail centers, and their preferences are having an impact. In a recent survey by consulting firm Kurt Salmon Associates of Atlanta, 38% of respondents said they planned to shop at malls less often this year than they had in the past.

The end result will probably be a big-time shakeout. The experts say that over the next few years, as many as 300 of the roughly 1,800 regional and super-regional malls--those with over 400,000 square feet of space--will be either shut down or converted to the warehouse-style retailing that do-it-yourselfers favor. Says Carl Steidtmann, director of research at Management Horizons, a retail consulting division of Price Waterhouse: "Regional malls clearly have a life cycle, and a lot of them are in their last throes."

Those that survive will have to reinvent themselves somehow. They will have to become primary destinations once again, catering to a consumer generation no longer willing to drift through fens of boutiques while slowly annihilating the family budget.

The major focus toward that end these days is entertainment--bringing folks back under the tent with movies, video arcades, restaurants and bars, or anything else that adds to the shopping experience. "The idea is to give people multiple reasons to come to your center," says David Mudgett, president of the retail division of Koll Real Estate in Newport Beach, California. "You become the location of choice and habit."

Right now the industry is abuzz with the new fantasy atmosphere created by the Simon Property Group, a major mall developer headquartered in Indianapolis, at Caesars Palace in Las Vegas. Based in a wing of the hotel next to its casino operations, the new mall, called the Forum Shops, approximates a Roman street scene, with a polished flagstone floor and a painted-sky ceiling whose color is changed from dawn to dusk in hourly cycles by a system of computerized lights. Appropriately garish statuary--this is Vegas, after all--and upscale restaurants like Spago and the Palm lead the way to pricey retailers like Gucci, Louis Vuitton, and Gianni Versace. Each hour robotic statues on one of the fountains come alive and put on a show. Other attractions include Roman processions and nightly gladiator battles.

The full effect is more than a little surreal, and it is not at all clear that the pyrotechnics would fit in anywhere but Las Vegas. But the project's economic success has been stunning enough to bring just about every top mall developer running to take a look. The 70 retailers in the Forum Shops have been averaging an astounding $1,000 per square foot or better in annual sales since the place opened. Simon plans to expand the operation shortly.

The Simon Group's colossal Mall of America, opened in 1992 on a 78-acre site near the Minneapolis airport, is perhaps the most ambitious embodiment of the new blend of shopping and entertainment. The mall includes under its massive roof four department stores, over 400 specialty stores, a seven-acre amusement park complete with roller coasters, a 14-screen movie complex, 45 restaurants, nine nightclubs, a wedding chapel, a LEGO play center, and an 18-hole miniature golf course. From its inception, the project has been dogged by skeptics. "There are people out there who still argue that it will never be built," quips Michael McCarty, senior vice president of the Simon Group. Company officials parried the cynics for a time, running ads in trade journals with titles like if you build it, they will criticize. These days Simon officials prefer to limit their response to a simple recitation of some dazzling numbers: 35 million visitors per year, a 94% occupancy rate, and a robust $425-per-square-foot annual sales average for specialty retailers--compared with an average of $200 to $400 for the bulk of the nation's malls.

Even if such strong performance continues, critics of the concept are unlikely to fall silent. "This is a bad idea very well executed," says Steidtmann of Management Horizons, who contends that entertainment may distract people from serious shopping. But virtual unanimity seems to prevail over the Mall of America's status as a laboratory for new retailing concepts. Of particular interest to many retailers and developers are the stores there that try to involve potential customers in some sort of hands-on activity before giving them the hard sell. Most prominent among them: Oshman's, a huge sporting-goods retailer that operates a miniature skating rink, basketball court, and Rollerblade track on its premises so interested patrons can try out shoes and equipment prior to purchase.

This notion of fully interactive merchandising is hot right now, and retailing big shots from all over the U.S. have recently been making pilgrimages to a unique sporting-goods retailer called Bass Pro in Springfield, Missouri. Shoppers at this store can learn how to tie flies, then test them out on an indoor trout pond. They can also train their hunting eye on pistol and crossbow ranges on the premises. There is even an on-site taxidermist.

Another hot concept: entertainment "boxes" being developed by Sega and Sony, among others. Still in the planning stages, these would be large modular units containing various Disney-style vehicular rides, virtual-reality attractions, 3-D and Imax film venues, and the like.

While many mall developers concentrate on wooing back customers with entertainment, others are aiming head on at the beady-eyed folks who wouldn't dream of paying retail prices. As Mudgett of Koll Real Estate puts it, "For more and more consumers, finding value has become a lot more important than the shopping experience itself." That shift is what's propelling them in the direction of big warehouse discounters like Costco and Sam's Club.

In a classic case of "if you can't beat 'em, join 'em," some developers have responded by combining three or more big discounters with a few smaller retailers in giant shopping parks called "power centers." Terranomics Retail Services, a San Francisco developer, is generally credited with founding the concept and naming it, but most of the big national mall operators have at least tested the waters. Simon now operates over 40 power centers nationwide, and many of the faltering traditional malls around the country could eventually find themselves converted to the format.

Mills Corp., a Washington, D.C., developer, has taken a particularly ambitious approach to attracting the growing hordes of value-conscious consumers. The company operates four massive enclosed malls filled with hundreds of off-price and outlet shops. Each of the centers--located near Chicago, Philadelphia, Washington, and Fort Lauderdale--offers entertainment components such as festivals, concerts, book signings, and interactive games. But the real attractions are the bargains to be found on name-brand merchandise. Though retailers populating the malls run the gamut from discounters like Marshalls and Sports Authority to upscale names like Calvin Klein and Saks Fifth Avenue, Mills Corp. maintains strict pricing controls so that shoppers can be assured every store is selling below standard retail prices. "If you confuse the customer, you lose the customer," says the company chairman, Herbert Miller.

These discount centers, which go by the name of Franklin Mills, Gurnee Mills, and so on, require a large population base and soak up a lot of cash--$150 million or so a pop for construction alone. But annual sales average an extremely healthy $300 to $400 per square foot, and the company has succeeded in positioning the centers as significant tourist destinations. Tour buses by the score pull into Mills parking lots each day, and the malls average some 16 million visitors annually. That draw, company literature points out, is about four times the number of people who visit the Statue of Liberty each year.

Some industry experts question whether Miller can reproduce this magic repeatedly. But he recently broke ground on a fifth Mills project in Southern California, and company officials have identified 21 sites they think can support such a development. "This is a value decade, and we are positioned to make that fact work for us," says Miller. "We have taken the most successful delivery system ever devised, the regional mall, and retooled it for the new age."

However developers lure reluctant consumers back to their selling zones, they won't survive without fresh thinking about the mix and quality of their specialty-retail shops. A good mall operator has to rotate retailers constantly, moving out those that have fallen behind the trends. Says Anthony Deering, chief executive of Maryland-based Rouse Co., a big developer of urban malls: "The only thing you know for sure is that whatever's working well today will be an absolute failure five years from now."

Currently, for example, many malls are populated by women's apparel stores that have failed to keep up with the times. Steven Claytor, president of the Chicago retail research firm MAS Marketing, estimates that 70% of women's apparel stores feature junior fashions that cater to perhaps 15% of adult women shoppers. Savvy mall developers are replacing such shops with retailers more in line with new trends, like home-furnishing retailers that cater to cocooning baby-boomers. Says Michael McCarty of the Simon Group: "As a landlord, I don't care whether you buy a $1,700 dress or a $1,700 couch. I've just got to be sure my stores carry what you are looking for."

Of course, consumers are a moving target, and there are no guarantees that any of today's retail schemes will stand up over time. Thoughtful developers are closely watching the home-shopping trend, and they fret about the effect on their businesses when far more elaborate electronic-shopping networks are available over cable TV systems nationwide. Shawne Mastronardi, director of retail services at Kurt Salmon Associates, predicts that by 2010, 55% of the nation's shopping will be conducted in nonstore venues--online services, direct mail, catalogues, 800 numbers, and the like. Says Rouse Co. CEO Anthony Deering of the electronic revolution: "It's the one thing that really scares us."