Retailtainment: The New Shopping Experience
Innovative diversification and mixed-use programming strategies are creating hybrid retail and entertainment development as traditional, anchor department stores continue to shutter locations and more shoppers take to the web. Many malls are already expanding programming in response to generational consumer trends—and are thriving. In the process, they’re exploring new technologies and incorporating different types of anchors to drive traffic, which is defining new paradigms for the future.
The mall experience once revolved almost exclusively around retail. Today, dining and entertainment have emerged as more than mere “add-on” attractions; enticing shoppers to engage in immersive experiences and experience all that a mixed-use environment offers. Food halls, creative menus at new concept restaurants, and virtual reality arcades are some of the scenes attracting Generation X and Millennials. While these groups may be more inclined to research online, shopping is still viewed as a social event, and they will frequent a mall to socialize around food and entertainment experiences.
Opportunities to encourage social interaction also present themselves as more traditional retail anchors are downsizing and closing stores. Malls are becoming increasingly destination driven through the incorporation of hotels and office buildings, which can create synergies with wide-reaching benefits. Hotels with large ballrooms and meeting facilities attract large numbers of convention tourists. Hotel guests and office workers benefit from convenient access to dining, entertainment, and retail options, which, in turn, can be profitable for both the mall and the anchor tenants.
The most recent expansion at Mall of America included a 180,000 SF class A office development anchored by Cray, a global leader in supercomputing, and a signature 342-key JW Marriott hotel. The next phase of expansion will build upon this with a second 200,000 SF class A office tower, a five-star luxury hotel, hotel-branded luxury residences, and luxury retail. Not only will this ongoing expansion enhance an already successful tourist destination, it will attract a high-end demographic that will generate more foot traffic, and attract even more major international corporate and retail tenants.
This move beyond traditional retail anchors also requires creative solutions to fill the voids left by department stores gone “dark”. At 200,000 to 240,000 SF, these anchor spaces are often too large to replace with a new traditional retail anchor. Consequently, these dark spaces are being reconfigured and subdivided to accommodate a mix of smaller entertainment and experiential retailers. Many of these retailers are creating immersive experiences of their own to engage with customers and differentiate themselves from online competitors. The Crayola store at the Mall of America, for example, features displays and activities which entertain and invite customers to touch, feel, and interact with its products. In addition, advancements in technology are creating new opportunities for experiential tenants, such as SMAAASH, a gaming and entertainment provider that specializes in virtual reality experiences.
Diversified programming and integration of technology go hand-in-hand in attracting shoppers and engaging them longer. Social engagement through social media fosters customer interaction. For example, beacon technology tracks shoppers and alerts them to special promotions as they move through the mall. This application of virtual and augmented reality narrows the gap between digital and brick-and-mortar shopping.
Finally, in addition to non-traditional anchors, shopping malls are welcoming in growing numbers non-traditional tenants, such as schools, gyms, and medical clinics. If this movement toward diversification continues, the fittest retail malls to survive in the future may resemble a new kind of downtown, once again becoming a hub for an urban lifestyle within a suburban environment.