As digital technology and innovation continue to change the retail landscape, one thing has become very clear: a diversified tenant portfolio is necessary to remain relevant to a new wave of consumers. Landlords have started to take notice and are steadily rebuilding their tenant strategy to include a mix of retail and service concepts that incorporate leisure and entertainment.
Today’s consumer shops where and when they feel like it, and according to a survey conducted by the National Retail Federation (NRF) and IBM, 7 in 10 consumers shop in “micro-moments,” or simultaneously while performing day-to-day tasks. And so, it makes sense that consumers would expect both convenience and entertainment to factor into their shopping experience. This new approach combines entertainment with traditional tenants in order to recreate a community-centric Main Street of yesteryear, where citizens gathered and lingered. In reality, it’s also an attempt to resolve the underlying problem for most retailers: a decline in foot traffic.
All About the Experience
According to Forbes, 74% of Americans prioritize experiences over products. As the commoditization of the consumer experience groomed by millennials becomes widespread, brands will see a return on their investment if they meet consumer expectations through the creation of meaningful, personalized, immersive, and yes, Instagrammable experiences.
Experiential convergence supports the value of creating an authentic, personalized and immersive visitor experience once reserved only for attractions. Area15, a multi-purpose mixed-use space in Las Vegas, leased its prime anchor site to immersive arts and entertainment company, Meow Wolf. The company, known for its collaboration with local and international artists, plans to create one-of-a-kind art experiences.
On a smaller, more intimate scale, are micro-experiences, where brands leverage data and insights to create small-format in-store activations customizable to the consumer. Drybar, the hair salon who provides solely blowouts, uses its consumer data to craft personalized content that anticipates consumers’ needs, from booking reminders to sending alerts about their nearest location when customers are traveling to a different city or neighborhood.
Similarly, Apple’s urban flagships began offering [AR]Tours for its tech and design-savvy consumers. A combination of art appreciation and tech education, the three-dimensional art walk includes a tutorial in augmented reality (AR) and a visit to an AR-specific art installation with contemporary artists curated by local museum partners.
What’s Not to Love
Did you know experiential gifts are the most desired Valentine’s Day gifts? A study released by NRF in 2019 found nearly half of millennials have given a gift of experience and 83%are interested in giving one in the future. For many consumers, it’s an opportunity to create a bookmark memory. Studies show that when consumers connect with brands on an emotional level, an absolute sense of loyalty forms between the two.
Perhaps that’s why more mixed-use retail spaces have become more strategic with tenant selection. For instance, Houston Heights, TX, will welcome M*K*T, a trail-oriented mixed-use project scheduled to open later this summer. In addition to its three-acre linear park, the mixed-use space will welcome fitness, restaurant, retail and office tenants into its 200,000 square feet of adapted industrial buildings.
Atlanta’s Upper Westside corridor anticipates the completion of The Works later this spring, which will include a 19,000-square-foot food hall and concert venue among other retailtainment-inspired tenants. In Philadelphia, SHIFT Capital is making strides to convert a former warehouse district in Kensington into a thriving community hub. SHIFT takes a “whole neighborhood” approach when considering investment and tenancy options. Fitness will feature prominently in the space, starting with its anchor tenant, Glasshouse Sports and Education Center, a best-in-class multi-sport and education complex funded in partnership by the Ertz Family Foundation and Street Soccer USA.
This retailtainment approach can be used universally; in concentrated urban neighborhoods, sprawling suburban populations, and even in developing rural areas. And ultimately, it aligns itself to the re-emergence of community-based revitalization efforts to methodically and deliberately strengthen commercial shopping districts.
About the author:
Anjee continues to be an insatiable enthusiast of all things retail. She’s a student of culture with a pulse on future shoppers and the fleeting trends constantly changing the retail landscape … driving retailers, landlords and developers crazy!