Identity has been highly involved in the commercial real estate business and real estate public relations since our founding more than 20 years ago. Our first clients were real estate developers, many of which are still clients today.
A Changing Real Estate World
Since our start in 1998, we have seen significant changes in the real estate world. In the late 90s and early 2000s, you couldn’t build retail-anchored mixed-use projects fast enough to keep up with the growing demand in underserved markets.
Large REITs were every developer’s best friend during that time—devouring as much retail real estate as they could get their hands on and, in many cases, overpaying for that real estate in an effort to drive momentum and growth for shareholders.
This was an unprecedented time in real estate development, and everyone was benefiting—from the developers who imagined the projects, to architects who designed the projects, to lenders who financed the projects, to construction companies who built the projects, to retailers who needed a place to open their brick-and-mortar stores. And at that time, retailers weren’t opening dozens of stores a year; they were opening hundreds.
Since the recession of 2008-2010, the development world has experienced a very different story. Pressures on financing, online shopping, evolving consumer preferences, a shrinking middle class and a shift towards accommodating an emerging Millennial base that’s more interested in experiences than material things, have all put tremendous stress on traditional brick-and-mortar retail and mixed-use projects.
The old retail adage of “if you build it, they will come” is no longer true and the industry is scrambling to identify new ways to engage consumers and pull them from behind their devices into a physical environment.
The 2019 Entertainment Experience Evolution
The goal of EEE is to bring together design, development and entertainment leaders to share how they are working to evolve modern-day environments to drive demand for retail, food and entertainment uses. It was established to facilitate open and honest conversation about how the industry has to change to adapt to modern-day pressures and opportunities.
To learn more, watch the promo video for EEE 2019 below:
Here are a few of my takeaways from the 2019 Entertainment Experience Evolution.
During the 2019 Entertainment Experience Evolution, Jonathan Casson of Sony Pictures spoke on a panel about shared experiences, and how the movie business is also looking for new and inventive ways to connect people. When watching a film at a theater, moviegoers may be sitting next to each other, but they’re not doing anything with each other.
The idea of social vs. parallel play and convenience vs. connection is something that all real estate developments should be mindful of and find solutions for. Jonathan spoke of the next phase of movies—the branching narrative—which will allow the moviegoer to become part of the entertainment and choose where the narrative goes.
Also part of this panel was Josh Wexler of IP2 Entertainment—an interactive VR gaming company that brings people together at a destination to play out team battle scenarios. During his talk, Josh told the story of an 80-year-old couple that tried it out. They were so enamored with the setting they were in, that they started dancing with each other in the middle of the battlefield instead of fighting the enemy. This shared experience allowed the couple to mold their own story outside of the conventional VR narrative designed for them.
Spaces Between Buildings
Today’s shopping centers have fewer retailers—and with that, fewer anchors—than ever before. To fill that vacuum, owners are turning to options that create experiences. Whether that’s ice-skating rinks, surf parks, interactive fountains, outdoor movie theaters or concert stages the spaces in between the buildings are now, in many ways, more important than the buildings themselves.
It’s no longer enough to simply add a play area in your shopping center. The point of these spaces is to make them sticky—something people will want to return to with friends.
One shopping center in Virginia, for example, is creating a massive wave pool for surfing. The hope is that people will not only come and learn to surf themselves but return in groups to watch the pros in action. With this draw, the center is betting that spectators will come to watch surfing, and also eat, shop and take advantage of their many other offerings. While this is clearly a long-term play, the question is: will it cost or pay?
Featured at Entertainment Experience Evolution were several outside-the-box concepts that challenged convention in creating environments that are wholly different and change the way consumers think about experiences.
One such concept was August Moon—a giant indoor drive-in movie “theme park” that gives people a nostalgic sensory experience. From hearing the crickets chirping, to smelling fresh meadow air, to seeing a summer sunset behind the big movie screen, August Moon is able to consistently transport audiences into yesteryear.
Another innovative brand at the conference was iFly—an indoor skydiving experience using groundbreaking technology. The concept is so unique, so popular, and so open to ranges of skill and talent, that CEO David Kirchoff talked about it being considered as a future Olympic sport.
Make It ‘Instagrammable’
The environments you create should be places that people will want to return to again and again. You may go once and have a great experience, and then bring a friend when they come into town because you know it’ll be a guaranteed memorable time. Presenters at EEE 2019 used the term ‘Instagrammable’ to describe the vibe centers should be creating.
Illustrating this idea to the fullest degree is Meow Wolf—a destination bringing together a series of art installations, music, video and more for the sole purpose of creating as immersive and interactive an experience for their audience as possible. To Co-Founder and CEO Vince Kadlubek, if visitors can’t articulately describe their Meow Wolf experience, it’s the greatest compliment he could receive.
Vince makes an important point in today’s digitally connected age. The goal of an experience should always be to make the physical environment connect with the virtual. If the audience is not talking about the attraction while they’re there or after they left—in other words, if it’s not a ‘wow’ experience—then it can be considered a failure.
But to truly know whether something is a success or failure, you can’t understate the importance of data. Today, there is more information at our fingertips than ever before. Gone are the days of gut checks—centers can actually see what their visitors’ shopping experiences and habits are, sometimes before they even leave the property.
Ashley Robinson of Emerging Concepts spoke about using data and mobile traffic data science to answer critical questions about how people engage with their shopping experience. Knowing how to collect, manage and take action on this treasure trove of data is of the utmost importance.
Adapt to Change
Noticeably missing from the conference were REITs and large mall owners. The reason? They have shareholders and corporate boards to answer to and will likely not adapt as quickly as private shopping center owners and developers who have the ability to make difficult financial decisions in order to create a sustainable and forward-looking community.
When you have 100 malls in your portfolio, you’d have no idea where to start—but if you have one or two, you can start making real change that, while in the short term may be painful to finance, will pay off in the long run.
While digital retail does pose a threat, it is still less than 0.07% of all retail sales. Brick-and-mortar retail is not dying—it is evolving.
Owners and developers must create an environment that’s engaging—one that will get people to leave the comfort of their bed, couch, home office or kitchen table. They need to create, and maintain, an experience that will both inspire and motivate. It’s a tall order, but one that some very talented and passionate people are trying to figure out and make better every single day.
Kudos to Jerry France and France Media for both seeing the opportunity to create this great conference, and also driving important discussions about the next generation of retail environments and the growing role of entertainment uses in their future.
Want to learn more about effective real estate public relations strategies for mixed-use shopping centers? Download a free copy of our e-book: Media Matters for Mixed-Use Real Estate.