With hundreds of stores and malls putting down their shutters, 2017 is certainly a bit of a setback. Whether it’s big names like JC Penney, Macy’s and Sears announcing store closures and numerous other like Payless and Rue 21 filing for bankruptcy, this situation is being coined as the great retail apocalypse of 2017. Retail may be having a meltdown at the moment but at the same time, this does not mean that retailers are going to shy away from brick and mortar. According to EKN’s research on The Changing Role of the Store – Is Your Workforce Ready, by 2020, traditional sales processes will reduce in importance in terms of what retailers expect from stores. At the top will be theme-based stores, fulfilment centers and pop-ups. With disruptive changes occurring in the retail industry, retailers and its workforce need to prepare for and embrace evolving retail formats and technologies to offer customers a unique and frictionless shopping experience.
FTI Consulting’s 2016 Retail Outlook Report, shows that 63% of shoppers still prefer to touch and experience the product. Thus, a vast number of shoppers still prefer shopping in stores and online shopping cannot replace the allure of the shopping mall. So, what are retailers and developers doing to attract more shoppers to malls? Retailtainment is the answer.
Retailtainment is the concept of adding entertainment and experiences to the retail mix. This trend started a while ago since malls started adding typical forms of entertainment and leisure activities, like gaming arcades, bowling alleys, and movie theatres to that attract consumers. Today, entertainment concepts have evolved beyond the movie theater and venues are now adding fun and creative activities like indoor climbing, bowling alleys, skateparks, mini-golf courses and more to the retail mix. In mixed-use venues such as these, the core of the space and prime real estate belongs to traditional retail, while dining and other leisure activities are complementary pieces that are designed to drive traffic and support stores.
A survey conducted by Eventbrite, shows that millennials have a particular interest in spending their money on experiences, with 78% of Gen Y respondents saying they would rather spend money on an experience than a material thing. Today’s shoppers are looking beyond a transaction when they enter a store, they want a unique shopping experience and crave a sense of excitement about product discovery. The experiential nature of millennials presents a growing opportunity for malls to add retailtainment options to provide them with experiences to increase their value. A notable example of retailtainment is the upcoming American Dream mall in Miami, a massive 6 million-square-foot project that is slated to have millions of square feet of retail, an indoor ski slope, a water park, a submarine ride attraction, a skating rink, 2,000 hotel rooms, theaters, a performing arts center and numerous places to eat and drink.
Entertainment brands have a strong appeal with millennials and other younger shoppers, and owners and operators are embracing the fact that a strong entertainment component can drive traffic and forms valuable synergies with traditional retail tenants. Millennials thrive for fun and unique experiences, and a large number of them prefer spending their paychecks on events, travel and dining at hip venues over buying things. Keeping this in mind, many retailers and hospitality chains are opening unique experiential concepts within their stores. American craft beer titan Stone Brewing is opening a first-of-its-kind “brewery hotel” in San Diego in the first quarter of 2018.
The idea behind the space is to provide beer lovers with a unique, completely immersive experience unavailable anywhere else. The hotel will offer special-release beers, “unique casks,” three onsite bars, a complimentary beer at the “bar-style lobby check-in,” and growler delivery service to each of its 99 guestrooms.
Retailtainment introduces a social element to a retail space that it the status of a destination. It gives people reasons to come and stay, providing them a wide range of engaging activities and memorable experiences. This trend is present all around the world with examples like the Dubai mall which is the world’s largest shopping mall boasting of 1200 stores along with a Sega Republic, Ice rink, Underwater zoo, Kidzania and the Dubai fountain.
As retailers, shopping centers and malls are desperately looking for new ways to remake themselves to attract consumers and the retail industry facing troubled times, entertainment has moved from becoming a side dish to the main course. And this is a meal that both retailers and consumers are keen to order. Since retailtainment infuses traditional retail with experience-driven offerings that can’t be replicated online, it seems to be the answer to attract shoppers to these locations and keep them there – spending money. Thus, this is where the future of retail lies.