Los Angeles — The retail industry is evolving, and the tried and true formulas for development are no longer enough to attract shoppers. The convenience of e-commerce is cutting into purchases once almost exclusively entrusted to local strip centers, and consumer tastes are evolving to demand better experiences from the centers they choose to shop at with their discretionary dollars.
Joseph Pine, author of “The Experience Economy,” shared these thoughts during a keynote address on the importance of staging retail centers. The speech was delivered at France Media’s sixth annual Entertainment Experience Evolution conference at the JW Marriott L.A. Live in Los Angeles earlier this month.
“What people want today are experiences — they are their own distinct economic offering,” said Pine. “When you use goods as props, and services as the stage to engage each individual in an inherently purposeful way, you’re able to create a memory, which is the hallmark of experience.”
In today’s economy, retailers and shopping centers are competing for a visitor’s time, attention and money. When assessing one’s property and its success level within the market, Pine noted it’s important to answer three key questions. “You need to consider whether or not your customers are increasing or decreasing the amount of time that they spend with you,” he said. “Secondly, you need to look at whether or not you’re having to exert more marketing and sales efforts in order to gain the attention of customers. Do the experiences you offer create robust demand by themselves?”
“Finally, you need look at whether the money being paid to you by customers is derived entirely from the sale of commodities, goods and services or if they are paying for an experience you offer. Staging experiences for each one of your individual customers to capture their time, grab their attention and to get them to spend money with you and with your tenants is paramount.”
One way to create an experience is through thoughtful design. “The purpose of placemaking is to fabricate rich, experiential destinations that inspire and engage the human spirit,” he said. “The primary focus of design for retail developments should be creating spaces for customers to have an experience. That is what shoppers value, and that is why you’re seeing the rise of the first mall specifically designed with more experiences than retail — American Dream.”
American Dream, a mall redevelopment project located in Northern New Jersey by Triple Five Group, combines traditional physical retail with a theme park of rides, roller coasters and entertainment concepts.
The $5 billion project — developed by Triple Five Group — is located across the Hudson River from Manhattan in Northern New Jersey. It will be home to 450 retailers, a Nickelodeon Universe theme park with 35 rides and roller coasters, an indoor DreamWorks Water Park, indoor ski and snow park, a Sea Life Aquarium, Lego Discovery Center and an NHL-size ice rink.
“Over 50 percent of the volume of visitors are there for experiences over retail, and that is the shift we’re seeing in the industry,” said Pine.
Creating an Experience
In his book “The Experience Economy,” Pine discusses five attributes of experience that are needed to draw the consumer dollar. “The experience you offer needs to be robust, cohesive, personal, dramatic and transformative,” he said. “I believe there is a four-pronged approach to creating these sorts of experiences, and it begins with entertainment. Entertainment options are events like concerts, which can be passively absorbed by visitors to your center.”
“Education is the second component needed to create a great experience at your center,” he continued. “It’s important to provide an experience where visitors are actively engaged in your center’s offerings through learning. The third attribute that needs to be present in a successful retail experience is escapism, where visitors are actively immersed in the environment.”
The final piece to the puzzle is the aesthetic environment present in the development’s built-in environment. “You want to create spaces where visitors will want to hang out and just be,” concluded Pine. “These are places like museums and cafes where visitors are primarily passively enjoying the experience. The most robust experiences include all of these four elements.”
Pine notes that Jinli Street in Chengdu, China, is one of the best examples of a retail environment that incorporates entertainment, learning, escapism and great aesthetics to create the ultimate shopper experience.
“When you enter through the gates of Jinli, you are transported to a different place,” said Pine. “The property transports you into the Three Kingdoms Period, so you are able to experience what it would be like to visit China during that time. It is also an aesthetically pleasing environment where people want to visit and spend time for several hours walking through the outdoor space, which is built around existing temple gardens where visitors can sit and reflect.”
Pine noted that the center incorporates many different games for visitors to enjoy and live music throughout, providing necessary entertainment. “The education element is one of the largest components of the property,” he said. “One of its primary purposes as a center was to help the artisans of the Sichuan Province continue to apply their trade in our mass-produced world. Artisans are brought in from all across Sichuan, and you actually get to see them work and buy their merchandise directly after watching them make the items.”
Jinli wraps up the day with a parade each evening, where visitors are immersed in the center. Pine noted that creating this sort of immersive experience — encapsulating entertainment, education, escapism and aesthetic — is the key to creating successful retail developments that stand out amongst the pack.
— Katie Sloan