Madonna Plaza and SLO Promenade shopping plazas.

Madonna Plaza is an outdoor mall with pretty mountain views and many fun stores. There's a Kohl's, Best Buy Electronics, Michael's Crafts, Five Below, Ulta Beauty, and Ross Dress for Less. Madonna Plaza is along the freeway so it's convenient if you need to stop on a long drive. 

Across a small street is another shopping center called SLO Promenade. It has a Sprouts Market, REI sporting goods, Hobby Lobby Crafts, Nordstrom Rack, and Cost Plus World Market with interesting jewelry, chocolates (smarties from England!- the British version of M&Ms), and home decor from around the world. 
Five minutes south is a Target, Costco, Home Depot, Whole Foods, TJ Maxx, HomeGoods, and Old Navy. So overall, this area on the west part of town has a lot of shopping options.
Drive east five minutes from there and you have Trader Joe's Market, and Whiz Kids Toys.
There's a park with a playground by a blue lake very close to this mall called Laguna Lake Park.
Nearby, check out the San Luis Obispo Childrens Museum, a good rainy day activity with tons of imaginary play activities for kids. Also, check out Downtown San Luis Obispo, especially during Thursday night Farmers Market when the whole town comes out to enjoy the scene.
While in SLO, don't miss out on the most amazing playground you'll ever see, at Sinsheimer Park.

Directions

Madonna Plaza is located at 281 Madonna Road,  San Luis Obispo, CA 93405. Exit Highway 101 at Madonna Rd and head west. The shopping center will be on your left. There are two sections (SLO Promenade is the other section) to the shopping center so make sure you see them both!

Click on map for interactive view