Methods, Merchandise And Reinvention: How Casinos can use Retail to Increase Loyalty and Non-Gaming Spending
Retail developers worldwide are perennially scratching their heads in an ongoing effort to generate increased traffic at their centers, more dollars spent per capita and ultimately, greater yields per square foot than their competitors. In addressing this ever-present conundrum, it appears that, first, the language of retail commerce is in dire need of some rudimentary translation.
Changing the retail lexicon is easier than one might think. “Traffic” will become “guests,” “dollars per capita” becomes “individual brand connections” and finally, “greater yield” should become not only related to fiscal benefit but to the “added asset value created by an enriched experience.”
Retail venues, from large enclosed malls to casino retail districts and even lifestyle centers, have, by and large, become mind-numbingly homogenous and predictable. Under-serving the imaginations of guests can really be expensive, since more than 50 percent of revenues generated at casinos are non-gaming, and it’s the entire lifeblood of dedicated shopping destinations.
In the rush to populate shopping properties with “blue-chip” tenants, developers have pursued the usual suspects with undeniable gusto and ended up with unimaginative merchandise mixes, little or no sense of surprise or wonder and ultimately, greatly reduced visitation. This trifecta of “blah” can be replaced with “oohs” and “aahs” by implementing the following strategies.
ANIMATING, ACTIVATING THE RETAIL ENVIRONMENT
There are several trends that are currently presenting new concepts in retail that may have some application in gaming environments. Surprise and delight are all positives when it comes to pleasing gaming customers, and these trends could accomplish that goal.
Incubators, Pop-Ups and Locals
As large retail centers and smaller lifestyle districts wean themselves off the ubiquitous and fading brands that lead to the undesirable monotony of “who cares” shopping, there must be strategies and entities to replace the vacancies. Blake Cordish, vice president of family-owned Cordish Companies, has implemented several creative strategies to reinvent existing properties and energize new developments.
On one site, Cordish’s team attracted 10 local boutiques with loyal clienteles and cool merchandise to create a regional “anchor” within the property. Because the 10 operators had deep roots in the local community, their customers acted as brand ambassadors beyond the boundaries of the district and increased visitation not only to the locally founded businesses but to the national tenants as well.
Another Cordish trademark strategy is using entertainment as an anchor. Notably, Kansas City Power & Light District with its game-changing Kansas City Live! and domed arena has hosted big-name concerts (free and ticketed), holiday celebrations and other high-visibility events. As part of an astounding urban revitalization, the Kansas City Power & Light District is the largest, most visited center in the Midwest, serving the retailers’ bottom line well. The mixture of food, entertainment and retail creates the backdrop for a satisfying getaway where guests’ expectations and needs are exceeded and they do not want to leave a property; i.e., they feel like they are on a mini-vacation. This “day-cation” trend is on the rise, from luxury-driven destinations to discount-centric malls.
For refreshing an existing retail venue and filling a pesky vacant space, there is nothing quite like a short-term pop-up store. There are unannounced retail experiences inside a store or outside that environment that are temporary but create a permanent impression. They generally cover the costs of their tenant improvements and create enormous hype about a new brand or product introduction.
The challenge is trying to find them. Many of this past year’s most successful pop-up stores have been hybrids of existing, recognizable or entirely new product offerings. The Gap has been on a pop-up store winning streak with its recent Gap Holiday pop-up as well as several collaborations with high-end Euro-designers. The summer Colette/Gap collaboration pop-up sold out of its merchandise in less than one day. Recently, St. John opened a pop-up store in Southern California for the sole purpose of introducing its entirely revamped design aesthetic. Isetan rocked its “Art Convenience Store” while Disney placed “Tron” mini boutiques in trendy art galleries coast to coast. This is a concept that has legs.
Still, pop-up stores are the domain of the new and the original, and are regrettably underfunded. When does a pop-up concept become an “incubator” and thus worth doing? Each case must be evaluated on a fiscal basis individually, but the energy/publicity/guests that a new store brings to a retail environment are usually worth the aggravation. And if the developer is covering the cost of either the lease or the tenant improvements, the concept can be considered an incubator, especially if the store remains in place for longer than four months.