The Bottom Line: Retail Must Embrace New Markets for Growth – Hotels as the New Frontier

by | 27 July 2018

Connecting with the consumer is at the heart of every brand experience. And the curated experience that continuously creates a lasting impression between a brand and its customer is the golden ticket to long-term engagement.

Data from the U.S. Travel Association shows how the travel industry impacts America’s economic growth and prosperity across the country. No one understands the curated experience quite like the travel industry. After all, hotels have been leveraging experiential marketing to create an authentic, interactive experience to draw guests for years.

Retailers can learn a lot from the sector, and it seems some brands are taking that knowledge to heart. The latest trend has non-hoteliers dabbling in hospitality and re-purposing underutilized properties to anchor their brands in the community in a new way. As hotels and other entertainment-centric venues develop concepts in collaboration with landlords and investors, we’re starting to see hotels fill  those retail vacancies.

Retail Brands Crossing Over

One of the first notable retailers to cross over into hospitality is Shinola, the luxury watch and leather craftsmanship brand. Later this year, Shinola Detroit is set to open in the heart of downtown Detroit’s Woodward Avenue shopping district. Shinola’s Creative Director, Daniel Caudill, and his team have intentionally created a modern community space that showcases the Shinola brand’s look, feel and smell, enticing people to visit the corridor.

Hudson Yards in New York City will be home to the first fitness-centric hotel by Equinox. The hotel, which will include a 60,000-square-foot gym, aims to blend aspects of a healthy lifestyle with aspirational ‘live-in’ experiences. Equinox Hotel, scheduled to open in 2019, will be neighbor to high-end retailers Athleta, Aritzia, Coach, Jo Malone, Neiman Marcus and Watches of Switzerland, among others. A second location is set to open in Los Angeles followed by Seattle, Chicago and Houston.

Taking staged areas to a new level, Restoration Hardware is opening a hotel/showroom in New York’s Meatpacking District (MPD). The boutique hotel (14-rooms total) will be located in a historic building at 55 Gansevoort Street. The MPD is one of NYC’s prime shopping corridors, home to Madewell, Rag+Bone, Trina Turk and others.

It’s not just the big cities that have committed themselves to bringing hotels into shopping corridors. Hotels are replacing big-box stores as anchor tenants, and partnerships are forming between REITs and hoteliers, too:

  • The Simon Property Group, one of the biggest class-A mall owners in the U.S., has announced a partnership with hotel chain Marriott International to build five hotels at Simon properties over the next several years.
  • Garland’s Firewheel Town Center, an open-air concept shopping center in Dallas, Tx will add Fairfield Inn & Convention Center to boost foot traffic.
  • Starwood has partnered with a local developer to add multifamily units and a hotel to the MacArthur Center in Norfolk, VA, and will likely start future hotel additions at several other Starwood sites.

As retailers fully embrace experiential marketing as a viable channel to attract and retain customers, the mall of tomorrow may very well be brought to you by your favorite brand.  Do you have a favorite retailer that should become a hotelier? Tweet me @AnjeeSolankiCRE to join in the live discussion.

Anjee continues to be an insatiable collector of all things retail. She’s a student of culture living next door to future shoppers, whose fleeting trends constantly change the retail landscape … driving retailers, landlords and developers crazy!

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