Entertainment, Dining Drive Success at Today’s Retail Center

Over the course of the last decade, we have seen a major evolution in retail real estate. Super regional malls and enclosed shopping centers, which once dominated the landscape, are being replaced by immersive, open-air centers that provide visitors with more than just a place to shop. 

Successful retail centers today are a destination — they provide excellent food and dining, aesthetically pleasing environments with open public space, and entertainment tenants and events that engage shoppers to stay longer, come back frequently and use the center as a hub for creating memories with friends and family. 

At the fifth annual Entertainment Experience Evolution conference, which took place at the Beverly Wilshire Hotel in Beverly Hills on February 12 and 13, the industry gathered together to take a closer look at the keys to success when embracing and implementing this trend at existing centers and new developments across the country.

Does Entertainment Really Drive Foot Traffic?

The conference opened with a keynote speech centered on an imperative question that many might be asking — does adding an entertainment element actually drive success and greater foot traffic to a center? And — more importantly — are there statistics to back this up? 

The session, led by Ashley Robinson, vice president of EMERGING, began by defining entertainment in the retail industry. “Let’s start with the first word of this conference — entertainment,” said Robinson. “Clearly we’re not talking about the entertainment industry; we’re talking about the entertainment segment within our shopping center industry. The obvious call-outs that we would all imagine are movie theaters, live performances, improv and interactive attractions like Top Golf or restaurants. People want an experience that great designers can create and execute.”

In order to demonstrate the ways in which entertainment translates to success, Robinson utilized data garnered from mobile-traffic science. Mobile traffic analysis is conducted by measuring unique mobile devices within a pre-determined, geo-fenced area. Mobile devices with applications that have location services turned on will send a signal to the data company that is tracking the devices whereabouts and the timeframe during which the shopper is at the property.

One of the first case studies cited by Robinson compares Glendale Galleria with the Americana at Brand — two well-known, successful shopping centers in the Los Angeles suburb of Glendale, California — over a twelve-month period. Glendale Galleria is centered on more traditional retail, while the Americana at Brand’s offering focuses more heavily on entertainment and dining.  

Glendale Galleria had 1.8 million estimated visitors during the period compared to 2.35 million visitors at the Americana at Brand. This data was used to tackle a common misconception in the industry regarding entertainment centers — that they attract more visitors during late afternoon and evening hours than they do during the day. 

“Is the retail-centric center driving more traffic during the day than the entertainment center,” asked Robinson. “The answer is no — both centers have similar traffic patterns. Americana, the entertainment-centric center, leads in number of visitors every single hour of the day and shows an increase in customers at five o’clock when the retail center’s numbers start to decline.”

Robinson notes that this five o’clock period where attendance ramps up at the entertainment center is a new day part that our industry should be watching and anticipating. 

As far as length of stay is concerned, the Americana at Brand is winning with more quick, 15- to 20-minute visits. The center is also outpacing Glendale Galleria in terms of visitors that spend 150 or more minutes at the property, showing that developments that successfully incorporate entertainment uses are able to garner more quick visits and elongated stays than centers that place a focus predominantly on retail.  

The next set of data to be analyzed by Robinson was who the visitors were to the center during the period. Glendale Galleria had a similar draw to Americana at Brand during the cited 12-month period, but the entertainment-centric Americana showed greater density and frequency of visitors. 

“Some of you in the audience may be wondering why this should matter to you,” said Robinson. “Landlords and developers — what if you could measure how things like weather, marketing, co-tenancy or other variables actually impacted foot traffic at your property? I pose the same question to operators — what if you could answer the question of whether it is the market, the real estate or you that is causing the trends seen at your center?”

“Designers or architects, how would you change the design of a development if you knew that the majority of the foot traffic would be seen after five o’clock in the afternoon,” continued Robinson. “Brokers, what if you could add this kind of expertise and analysis for your clients? This data is incredibly valuable — most in our industry want to work with entertainment concepts, but don’t quite have enough experience with this new segment to know how these tenants are going to impact the foot traffic and sales in their existing centers.”

“We know entertainment-driven retail, restaurants and programming offer experiences that cannot be duplicated by the Internet,” concluded Robinson. “We know they extend the day parts of the typical shopping center, they increase the trade area, visits and visitors, and potentially contribute to an increase in retail sales. For these reasons, we do believe the entertainment segment drives foot traffic and a desirable group of visitors to a traditional retail center, but more importantly, it contributes to a more Amazon-resilient industry.” 

Lessons Learned Integrating Mixed-Use

After defining the reason why the addition of entertainment is so valuable in today’s retail landscape, the conference transitioned into the panel, “Successfully Integrating Entertainment Into Retail and Mixed-Use Properties.”  In this session, entertainment venue operators and retail owners provided insight on how to successfully add entertainment into existing and new developments. 

The first rule touched on by the panel was the fact that one size does not fit all in terms of design. “There are no formulas to making emotional connections with customers to entice them to spend their discretionary time and income at your center,” said Nick Egelanian, president of SiteWorks Retail Real Estate Services and moderator of the panel. “What works in one market may not in the next because the conditions are different.” Speaking to this thought, each panelist shared lessons learned when integrating entertainment into retail and mixed-use centers in their portfolio.  

Hernan Martinez, CEO and leader of Cuestamoras Urbanismo, noted that it is important to start with incredible research when working on an international development. “Demographics are not enough — you have to have a very thorough understanding of the psychographics in the market,” said Martinez. “With our mixed-use project Oxigeno in Costa Rica, that research showed that the people were not looking for another retail center. They were looking for something way more comprehensive.”

For Cuestamoras Urbanismo, this meant the inclusion of sports with running tracks and gyms, educational elements, arts, culture and entertainment. “They really wanted a gathering place for the community,” said Martinez. “The project includes a three-acre park open to the public with an incredible amount of activities.”

In order to fulfill the wants and needs of the community determined through research, Martinez noted it is then important to contact a number of incredible consultants. “Everyone on the team has to understand that retail is not going to be the driving force of visitation here,” he said. “Since we’ve opened — in a down economy, even after Christmas — our visitation is more than 1.5 million people.”

Ed De Avila, founder of Place Strategists, also stressed the importance of working off of thorough research and knowledge of the market. “Our company uses data-based, analytical models to get to know our customer before we do anything else in the trade area,” said De Avila. “I would urge every single concept out there — get to know your customer. Don’t just create a great place or connect digitally. It is really about understanding the journey of your consumer and patron.”

“Our focus is then about distinguishing place and creating a culture,” continued De Avila. “We’ve all had successes and failures — I can talk about both — but it is important that we do our research and that we make decisions based upon market reality and the best research that we can find. Then, it is important to find someone who is practiced and who has delivered in his or her niche to help you bring it to fruition. There are no formulas, only principals, and you need to make sure you know what your principals are before you pay high-paid consultants to deliver projects.”

Another key to success is embracing everything that your development site has to offer. “It’s important to look at the different features of your site, and view each part of it — even the aspects that seem challenging — as an asset that can be used to draw people in,” says Mark Guzzetta, founder of The Guzzetta Group. “From there, immersing yourself in the local culture and understanding what the community needs is key to creating a successful space. You can’t just take another successful project and emulate it on your land — you have to find an authentic concept that speaks to what you want to accomplish and creates a place to be, not just a place to go.”

A deeper look into what entertainment is needed and valued in your area is another key to adding the most successful mix of tenants at your property. “Our mixed-use center has 50 full-service restaurants,” said Jennifer Leavitt, vice president of marketing at The Bellevue Collection, a large mixed-use development outside of Seattle in Bellevue, Washington. “For us, it really came down to the fact that restaurants are considered important entertainment in our market.” 

The Bellevue Collection also presents events throughout the year to boost visitor engagement. “We host events throughout the year, with one of our largest being Snowflake Lane, which occurs during the holiday season,” says Leavitt. “It ties our entire property together and draws a great deal of traffic — 20,000 to 25,000 people per-night during our busy season. It has connected us with our community in a very impactful way, which is important for driving consumers to return again and again.”

A thoughtfully curated tenant mix and placemaking are also important components for success at retail and mixed-use centers today. “Over half of the acreage of our most recent project, a surf park and entertainment center called The Wave in Virginia Beach, is dedicated either to the surf park or common areas,“ said Mike Culpepper, managing partner of Venture Realty. “We’ve invested a lot into creating dynamic, open spaces that are inviting to pedestrians and to creating attractions that people want to come see. Merchandising is also a huge part of this because we are looking at very unique types of retail that we want to populate this project with. It’s very important that we are using complementary entertainment and retail attractions to create an immersive experience for visitors.”

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An opening cocktail reception gave attendees the opportunity to mingle and network with panelists, colleagues and fellow industry leaders in retail development and entertainment. 

Taking A Deeper Look

Sessions continued with deeper looks into two important forms of entertainment — food and beverage and public gathering space. In, “Food and Beverage in Retail Environments,” a panel of leading restaurateurs, restaurant designers and retail owners discussed the ways in which experience is created through design and carried out by operations in restaurant businesses. 

“Open Spaces: The Invisible Anchor,” closed out the day’s programming. From open-air parks to lush, landscaped environments and water features, consumers view open spaces in retail environments as one of a center’s most attractive assets. The panel — led by Julie Brinkerhoff-Jacobs, president and CFO of Lifescapes International — explained the ways in which developers and owners are creating an invisible anchor through a focus on open space and what features they are adding.

An opening cocktail reception gave attendees the opportunity to mingle and network with panelists, colleagues and fellow industry leaders in retail development and entertainment. 

The second day of the conference continued in the spirit of networking with a series of breakfast roundtables where attendees were encouraged to connect with conference speakers and thought leaders for a closer look at timely topics in entertainment. These topics ranged from the key ingredients for a successful entertainment district to deploying digital in the built environment and the right food, beverage and entertainment tenant mix for filling big boxes.  

Panels continued to take closer looks at a variety of hot entertainment concepts in the industry today and how they are best integrated into a retail development. Panels discussed new entertainment concepts and what they are looking for in terms of expansion; factors to be considered when choosing to open a food hall; ways in which the industry is creatively recycling dated retail spaces; and up-and-coming movie theater concepts and other movie-going experiences to watch for. 

As the retail industry continues to trend towards a greater focus on providing an experience for shoppers, it is more important to success than ever to be on the forefront with implementation of entertainment. Shopping Center Business would like to thank our sponsors, exhibitors, speakers and attendees for their support and contribution of talent — they are truly leading the way for change in retail environments.  

— Katie Sloan