MythBusters………. Experiential Retail.

Of late, I have been reading with great interest about the latest “trend” of morphing what could be referred to as a traditional retail tenant mix into an experiential based tenant profile. The benefits of this appear to be moot and I would suggest this may be due to the philosophy being ill conceived or more likely, misunderstood as a retail solution. It sounds something akin to the “shoppertainment” of the 90’s but in that instance such offerings tended to be over and above the typical super regional tenant mix, whereas this is suggested as a switch from one set of tenants to something completely different.

Let’s take a step back though. The consumer has been progressing away from possessions-based fulfillment and attaching increasing value to special experiences. In other words, the accumulation of stuff over a lifetime is meaning less to people than the quality of how they have used their time, the stories they can tell and the ability to share on social media.

Of course, the idea of a shopping mall competing with hiking the Machu Picchu trail, diving with Great White Sharks or watching Pearl Jam live, may be a little challenging but the opportunities for experiences are as varied as they are infinite and here’s the thing: experiential retail is not about an increase in the percentage of food service tenants or bringing in a health spa it is about ensuring that no matter what the tenant is about they must have the customer experience as a primary goal.

Similarly, whilst rental and turnover per m2/ft2 are obviously important measures to any property owner, the primary metric must be about how many customers had a really great time visiting the mall. Successful mall ownership is no longer about renting out the space it is about providing an all-round great experience.

The pressures on traditional retail today are obvious and I have often spoken about them, but the changing attitudes of consumers must equally present endless opportunities too. I have just finished judging 25 of the World’s best shopping centres as part of the upcoming ICSC Viva Awards and some interesting ideas are emerging. For example, in Colombia, there are two new centres that have embraced the gig economy by making Co-Worker Zones an integral part of their design; in and of itself the idea is not unique but in the way it has been treated as an intrinsic element, it is a standout feature.

The single biggest challenge faced by mall owners is not necessarily who and what should replace their department store tenants but how do they drag those businesses kicking and screaming into the 21st Century!