Integrating Entertainment Into Retail Destinations — It’s More Than Just a Movie Theater

Today, the role of a retail destination is increasingly based upon giving consumers entertainment-focused experiences that they can’t get elsewhere.

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Integrating Entertainment Into Retail Destinations — It’s More Than Just a Movie Theater

The perception versus reality of the “demise” of traditional retail has long been disconnected. Much of this disconnect is centered on a misunderstanding of retail’s role in the lives of consumers.

Today, the role of retail centers is increasingly based upon giving consumers what they demand — entertainment-focused experiences that they can’t get elsewhere. This goes beyond adding a movie theater or bowling alley. Entertainment finally has a real seat at the table in retail development. So how can developers, owners, and tenants make the most of it? The answer lies in selecting the right entertainment uses and scale for particular locations.

To do this, owners and developers must carefully and strategically approach today’s entertainment and experiential trends. From evaluation of demographics to selection and utilization of space, the smartest retail stakeholders can deliver successful experiences and achieve strong returns, provided the experience is planned and managed correctly.

“The answer lies in selecting the right entertainment uses and scale for particular locations.”

Martin Zurauskas
Changing Consumer Demands Driving Experiential Trends 

Statistics reveal that over the past several years, millennials have been spending far less money on luxury products than their predecessors — and nearly three-quarters of the generation would rather spend on experiences than things.

This is driven by a combination of factors, including more mobile lifestyles that are increasingly facilitated by technology, as well as shifting values influenced in part by watching previous generations struggle with loss during the economic downturn of a decade ago.

Today’s consumers of all ages also have more choices than ever when it comes to entertainment. Music, movies, books, games and television shows are readily available on phones, tablets, and other devices.

These factors, combined with the increasing convenience of online shopping, mean that a day out at the mall to see a movie, buy a pair of shoes and eat a cinnamon roll does not have the same appeal to most consumers that it did 10 to 15 years ago.

To meet the demand for today’s experiences, new and existing retail centers are diving into immersive opportunities to diversify far beyond shopping and dining. Examples include full-body virtual reality concepts like The VOID, which provides a complete experience engaging all five senses, as well as artist-curated immersive experiences like Meow Wolf.

Photo by HENCE THE BOOM on Unsplash

Another example is KidZania, an edutainment concept where children enter a miniature ‘city’ with its own currency and economy. While in the city, kids explore a variety of professional opportunities including flying planes, fighting fires, working in a research lab or even solving a crime.

Exciting and interactive experiences like these can draw in shoppers and families, and serve as accessible, convenient and cost-effective alternatives to more expensive entertainment venues such as theme parks.

Challenges of Constructing Experiences

Based on the success of certain entertainment and immersive concepts, retail owners, developers and tenants are increasingly recognizing and exploring the revenue-generating opportunities of implementing successful experiences.

There are several variables that developers and owners must navigate during the planning process in order to ensure a successful result, including overcoming the constraints of space to deliver an unforgettable experience.

These experiences require high capital costs to develop, so landlords often want these tenants in place and generating revenue quickly. That said, concepts and scope should take time to be developed and evaluated.

For example, the appeal of The VOID can be partially attributed to its top-tier intellectual property themes like Star Wars and Disney. However, not all virtual reality endeavors can secure and afford these big-name partnerships.

In these cases, an alternative element that offers a unique and localized appeal must be identified. Simply offering a generic virtual reality experience is likely not enough to drive sustained traffic. Further, an idea might seem great on paper, but sometimes is simply not the right experience for a particular location.

For example, earlier this year, the NFL Experience in Times Square – a 40,000-square-foot attraction featuring a 4-D roller-coaster theater – announced that it was closing its doors just 10 months after opening due to lackluster attendance.

Despite a major intellectual property partnership and a prime location with some of the highest foot traffic in the country, the experience was not a fit for a place where most people passing through are looking for the New York tourist experience and more established destinations.

The key takeaway here is clear: without performing a comprehensive evaluation of local demographics, economics and consumer demand, a wonderful idea might not survive the execution.

Devising a Pathway to Success

A deliberate process is necessary when approaching the incorporation of experiential retailers into new or existing retail developments. These experiences must meet the real estate reality of being developed in height-constrained and capacity-constrained areas. Expectations must be realistic — for example, it is not possible to recreate Hogwarts in a mall.

Additionally, stakeholders must determine how to strategically combat or work within the high peaks and low periods that retail centers experience on a daily, weekly, and seasonal basis. For instance, in addition to attracting families on the weekend, KidZania’s educational components attract school groups during the week to help offset slower times.

Is it Feasible?
Is it Buildable?
Is it Deliverable?
Is it Operable?

We’ve found that asking — and answering — the below questions helps to distill the complexity of the above and other factors, and can play a critical role in strategically guiding experiential retail projects to success:

Is it feasible? Does the concept align with the economics?

Is it deliverable? Does the plan fit within the scope of the location and budget?

Is it buildable? Is the design aligned with the necessary planning to implement the build?

Is it operable?  Is the project completely integrated and ready to open?

These crucial items must be considered and addressed by both landlords and tenants at each step in the development or implementation of a new experiential retail project to ensure nothing is missed and no component drifts out of alignment.

The trend of developing or repositioning shopping centers to provide top-notch immersive experiences in on track to continue, and to grow in popularity in the years ahead.

By taking the time to conduct a deliberate and structured evaluation process from the start, retail owners and developers will be more likely to ensure the success of their new immersive experience. This in turn helps owners to make the best use of their capital investment, and to establish experiences that will sustain foot traffic and guest satisfaction for years to come.

(This article originally appeared in Shopping Center Business, January, 2019.)


About the Author
Martin Zurauskas
Managing Director

Martin is the Managing Director for nFusion, where he leads the project management services group with vision and focus into new markets and is responsible for its global efforts. With over 30 years of experience, Martin provides leadership to nFusion’s entertainment and leisure destination project teams, implementing innovative project delivery solutions with the ‘big picture’ in mind, and his finger on the pulse of each project. Full Bio.

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