Entertainment and Experience Guide the Future of Retail
It’s no secret that mixed-use developments are incorporating an increasing amount of entertainment uses and experience-centric concepts into their projects. Gone are the days of shopping-only destinations. Developers and local municipalities are focusing more and more on complex retail-led mixed-use formats to attain a focal point for social, commercial and economic growth.
How consumers want to spend their free time has changed; shopping by itself isn’t considered an experience anymore. Instead, people want to spend quality time with their family and friends, and crave new and unique food offerings, interactive retail and an ever-changing offering of activities to engage in within their shopping destinations. People are seeking out activities, not just things to buy or homogenized places to eat. To accommodate this growing desire, developers have adapted and are creating properties that are entertainment and experience driven which ultimately results in driving retail sales.
The South has an abundance of developments popping up, possibly more than anywhere else in the country, thanks to its climate and land availability. The milder climate enables developers to incorporate more outdoor elements like amphitheaters, children’s play areas, trail systems, and concepts such as TopGolf, as well as experiences like free yoga or movies being displayed in gathering spaces. Additionally, these developments tend to require a lot of room, something that a dense, urban city such as Boston or Los Angeles don’t have.
Below is a look at three projects throughout the Southeast that are incorporating these elements in interesting and unique ways.
The Battery Atlanta at SunTrust Park – Atlanta
The Battery Atlanta at SunTrust Park, currently under construction, will be Atlanta’s first mixed-use development centered around a major league sporting facility. While the Braves will bring plenty of attendees to the property during their 81 home games, Fuqua Development had to figure out how to bring people to the property 365 days a year. With under a year until completion, The Roxy Theatre, King’s Bowling and LiveNation Amphitheater are secured for the 74-acre project. These entertainment concepts, along with numerous unique restaurants and retail shops, are showing great promise for a successful year-round destination for both local and regional visitors.
ONE DAYTONA – Daytona, Florida
International Speedway Corp. broke ground recently on ONE DAYTONA, located in Daytona, Florida, across from the Daytona International Speedway. The project, which is slated to open in 2017, will include 300,000 sq. ft. of retail, restaurant and entertainment space, and is anchored by a 12-screen Cobb Theatres multiplex and Bass Pro Shops. The focal point of the development is Victory Circle, a 360-degree open-air space, where visitors can watch live music and dine outside at one of the many restaurants located around the Circle. Daytona is best known for its world class beaches and is the home of Daytona International Speedway, which hosts over 300 events annually, including the Daytona 500, NASCAR’s most prestigious race which brings in crowds nearing 125,000 people.
MidCity – Huntsville, Alabama
Without a doubt, MidCity in Huntsville, Alabama, will be a truly regional destination when it opens in early 2018. The 100-acre development, located in the heart of the city, is slated to include a live music venue, several outdoor entertainment concepts and a 15-acre park that includes rental canoes and bicycles. MidCity is designed to be a truly 24/7 destination, with the intention to bring visitors to the property around the clock.
These projects are a true reflection on the changing retail landscape. Looking ahead, expect to see several existing and new developments to incorporate entertainment, the outdoors, and experience-centric concepts into their projects.
Monetha Cobb is managing director for Franklin Street Real Estate Services, specializing in retail tenant services throughout the Southeast.
Now trending: Hot Stuff
Summer is an interesting time in the world of retail. With lazy vacation-stilted months in June and July and the comparatively bustling back-to-school energy of August, it is a season of contradictions. While, yes, the unique challenges and opportunities of summer sales patterns and scheduling are different than any other time of the year, understanding what is likely on tap for retailers this summer requires an appreciation for certain universal factors that play a role no matter what the calendar says.
One of those is the cause-and-effect nature of the industry. Retail is inherently a reactive enterprise, where retail sales, retail development and retail trends traditionally function as a kind of lagging indicator of larger social and economic trends. Where, when, why and how much we spend is dictated by the economic backdrop, and by what’s happening in the broader culture. In summer months, it’s vacations and school preparation that drive the agenda.
From a sales standpoint, the summer headline is always back-to-school shopping. Back-to-school merchandise has expanded dramatically over the years, and what was once exclusively the territory of pencils, composition books and maybe a couple of new outfits for the fall is now a full-on smorgasbord of items on the average family’s shopping list. In addition to school supplies, we see sales and purchasing trends encompassing everything from clothes and electronics to appliances and other home goods. In that environment, retailers like Target that serve as a one-stop-shop find themselves at an advantage.
Something else to watch for this summer is the continuation of another ongoing trend — back-to-school sales, which seem to start earlier and earlier with each passing year. In much the same way that holiday promotions are no longer a post-Thanksgiving phenomenon and now stretch all the way back into October (or even September), back-to-school sales have gradually begun to nibble away more of the summer calendar. Today, back-to-school sales have been picking up in mid-to-late July. Part of that may be in response to a school year that starts earlier in August in many parts of the country, but the primary driver is retailers essentially piggybacking on the mercantile back-to-school mood. Retailers have realized that they can, should, and in some cases, must take advantage of the extra traffic that back-to-school generates, and that it’s not just books and backpacks, anymore.
The first half of the summer is a very different environment, however. In June and early July, before back-to-school business picks up in earnest, shopping patterns tend to be focused around recreational activities and outdoor sales. While tourist markets and destination retail see a boom, those early summer sales numbers generally tend to be softer because of camps and vacation schedules.
One of the interesting aspects of breaking down summer sales is the fact that the numbers tend to be driven less by sector-specific trends than by geography. Granular market-based analyses are likely to have far more predictive results than broad generalizations based on brand or product type. For example, while suburban restaurants in Anytown, USA, might be a little slower when the mercury heats up in June, July and August, restaurants in beach towns and vacations destinations frequently have the summer months pegged. Some stores actually rely heavily on the summer rush to make their annual sales targets. Outside of the hot tourist and vacation markets, the summer slowdown can be particularly noticeable – especially in those warm weather destinations that often slash hotel and flight price points when tourist traffic slows. Phoenix in July, for example, is unlikely to be at the top of the average “Must See” list.
When it comes to retail expansion, the summer tends to be a similarly slow (perhaps even bordering on “sluggish”) period. Part of the reason for that is logistical hurdles in the summer that we don’t experience during other times of the year–outside of the Christmas/holiday season, at least. From zoning to site plan approval, permitting tends to slow down, as vacation schedules and travel plans play havoc with committee meetings and civic obligations. Lighter and more inconsistent calendars are common, and in some markets, zoning committees may not even meet during the summer months. Larger projects and ground-up development are especially impacted by this summer slowdown. So, while cash registers are still ringing, and business is still being conducted, it’s safe to say that summer never really gets going for retailers until the back-to-school promotions start to kick in. In that sense, summer is a season that truly plays by its own unique set of rules.
Jonathan Lapat is President of X Team International and Principal with Boston-based Strategic Retail Advisors. You can reach Jonathan at [email protected] and learn more about X Team at xteam.net.
Luxury department store reports decline in sales and profit
The combination of a cool spring and the continued pullback in luxury apparel spending took a toll on Neiman Marcus Group in the company’s third quarter.
The department store retailer’s profit plunged 80% in the period ended April 30, down to $3.8 million from $19.8 million in the year-ago period.
Total revenue for the quarter fell 4.2% to $1.17 billion, down from $1.22 billion a year ago.
Same-stores sales fell 5%.
In October, Neiman Marcus delayed its plans for an initial public offering amid volatility in the stock market and a slump in stocks of luxury companies.