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Methods, Merchandise And Reinvention

How casinos can use retail to increase loyalty and non-gaming spending

Methods, Merchandise And Reinvention

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.

CREATE (OR RE-CREATE) A COMPELLING ENVIRONMENT

If “all the world’s a stage,” then retail environments need set designers to create a place for guests to act out their momentarily transformed lives. For a nanosecond, we all believed that staying in sync with technology would give our “places” an edge. It was a strategy that was short-lived, as it became apparent that guests, given the choice, preferred high-touch to high-tech in a bricks-and mortar setting.

The Landscape Environment

Regardless of the real estate idiom (resort, residential, casino, retail), the idea is to design for the guest. “Our landscape design is programmed to surprise guests and create a reason for them to explore a property further,” says Don Brinkerhoff, founder and president of exterior design firm Lifescapes International. “This, in turn, increases the guest length of stay and the amount of money they spend along the way.

“Gaming guests now expect an elevated sense of experience when they visit casinos and their attendant resorts. The bar has been set very high for beauty coupled with excitement, and newer properties must not under-deliver on these elements or they risk turning first-time visitors into one-time visitors.”

Legendary casino owner Steve Wynn is committed to including top-drawer landscape environments on all his properties. “If I can get paid back for implemented design, I will make the investment,” he says. “That is why landscape architecture will always be part of any master plan with which I am involved.”

The experience of a garden environment helps to create meaningful, comfortable places where guests can enjoy all the amenities of a property while preparing for the next adventure.

While Facebook, Twitter, email, smart phones and other social networking tools seem to make consumer appetites for all things high-tech the rage, our human need for a garden, a promenade, a respite from the geek and into the chic, is still part of the guests’ DNA.

Other Public Spaces

Garages, parking valets, restrooms and more are seemingly mundane amenities present unexpected opportunities to engage, inform and even entertain guests.

For instance, one of the greatest concerns of all visitors is remembering where their vehicle is parked. Creative way-finding systems (of which signage is only one part) that address the touchstones of mnemonics, symbolic imagery and color coding, as well as a traditional numbering system, can increase the likelihood guests won’t be lost and looking for hours. Surprisingly, parking garages are also perfect places to generate enthusiasm for the upcoming retail experience and inform guests of events or special offers that might be under way. LED screens, digital messaging and even more primitive changeable information kiosks can achieve this, but moving imagery trumps all else in such locations.

As part of the theatric metaphor that is part of the best in design trends for retail, all areas should be thoughtfully planned and positively surprise guests by delivering a richer environment than would normally be expected. Of course, lighting plays a leading role in making the mundane less so.

The Art of Lighting

It’s no secret that good lighting can make or break a nightclub. But utility wins over ambience when many developers consider lighting as they build or renovate their shopping venues.

As part of the “all the world is a stage” concept, it is essential that flattering and even changeable lighting should be integrated into the overall design. Certainly, lighting affects how guests view different merchandise (the subtle light over a masterpiece, the warmth of a high-end couturier’s salon, etc.). Even more crucial is how the guest feels “they look” as revealed by the light. But lighting can also play a story-driven role in many applications.

Ron Harwood, a principal of Illuminating Concepts, which has created evocative lighting palettes for many gaming and retail venues, believes lighting can make the difference when the customer is deciding on purchases, returning to a property or evaluating the experience.

“The relationship of light to products and products to their three-dimensional surroundings is—or can be—as relevant and motivating as a scene change in a film. From Wal-Mart to Aeropostale, Disney to Saks, the discussion of light and its design never ends. The additional wrinkle of ‘green sensitivity’ has added a new layer to all our projects as we endeavor to be energy-conscious as well as challenged by design and intent constraints. We need to sell and save with light. ”

People, Not Products

As the store design guru credited with the hip vibe that permeates most Urban Outfitters, Anthropologies and now, The Art of Shaving stores, Ron Pompei has a strong sense of future vision for retail. He notably debunked the myth that consumers prefer orderly, neat rows of merchandise by implementing a “planned chaos” of meandering shopping vignettes and surprises within the context of a standard four-wall retail space. The resultant inviting, extraordinarily human and comfortable retail experience continues to deliver above- average fiscal payoffs.

Three-dimensional retail experiences are often impacted by the technologies that separate the consumer from the store, but Pompei’s firm—Pompei A.D.—strives to bring these worlds together.

“Although technology and media will continue to expand within all retail environments,” says Pompei, “brands that recognize and cultivate empathy as a true attribute and value of their brand experience will create stronger emotional bonds within their customer communities. Empathy doesn’t rely on technology; it’s the other way around. Establishing an empathetic groundwork within the marketplace allows guests to relate deeply to the brand, and they will soon transform into brand co-creators and brand ambassadors.”

Pompei says an ongoing dialogue between a brand and its customers (existing and potential) is crucial to the evolution of the brand and its expression in a vibrant marketplace.

Seductive Window Dressing

It is a total misconception that window design is part of store design. Store design is more static, and window design is an exciting canvas that changes with merchandise offerings or the needs of the individual merchant.

What the stores on Fifth Avenue and Madison Avenue in New York know is that what’s in the window can create an impetus or an impediment for guests walking through the front door. Does it entice? Does it intrigue? Does it ask more questions than it answers? Is it playful or all business? Does it tell a story or connect to an emotion?

All retail and hospitality owners and real estate developers need to be more mindful of what constitutes a great window, so that they can recognize “window misfits” on their property. An ill-designed or executed window can deflate the emotional experience for guests, sometimes impacting their impression of the entire retail setting. Window design is more than a branding exercise—-it is an opportunity to connect with potential customers on a visceral as well as intellectual basis. This visual imprint can make the difference in impulse visits and subsequent sales.

Inventive windows have recently evolved into an alternative solution for marketing unleased retail spaces. While barricades have been the traditional application, they obstruct the space and don’t allow potential tenants or guests to relate to the three-dimensional volume offered. On par budget-wise with vinyl appliques, a window vignette can draw all who pass by into a story that is evolving right in front of them.

 

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.

Public Art, Events & Education, Connection

Public art, for the purposes of this article, does not refer to amateur painting club shows or permanent assets to a given property (unless it’s the fountain in Chicago’s Millennium Park).

Public art that attracts visitors is dramatic, professional, story-telling, interactive and intellectually accessible. Recently, Madison Marquette, an REIT headquartered in Washington, D.C., sponsored an artist-designed 33-foot-tall holiday tree constructed of shopping carts at its Bay Street Emeryville center. The tree instantly became an icon, covered by the local, national and international press as well as serving as a photo opportunity for families. The tree also sparked private conversations and public discussions on the meaning of the tree. The interpretations ran the gamut from the importance of recycling to homelessness to consumerism.

“As the holiday season progressed, we realized that we had brought our community together in meaningful dialogue about the holidays as well as delighted our tenants, since the media coverage attracted increased numbers of shoppers,” said Whitney Livingston, marketing director for Madison Marquette West Coast.

Every large and medium-sized city has artists in residence, whether they are organized as a community or not. Accessing this treasure trove of talent is not only affordable but generates positive energy throughout a property.

When art is coupled with an event, the results can be multiplied. Where an amateur art fair might feel dated and stale, hosting a “chalk-art” competition or an ice-sculpting challenge is vibrant and involving. Holiday singers might be expected toward the end of the year, but a temporary ice rink is a delightful surprise. Partner with museums that have traveling exhibitions and place them in empty storefronts. Essentially, whatever is done, whether it entertains or educates, must connect emotionally with baseline guests to be successful.

Gaming environments provide additional excitement to the allure of retail.

“Las Vegas is one of the world’s top vacation destinations not only for the gaming but also for shopping; it’s a logical place where you can combine both to great success,” says Michael McNaughton, executive vice president of asset management for General Growth Properties. “When leasing a typical suburban mall, you take into account the market and demographics within a certain mile radius. In casino retailing, you must consider the market and demographics of not only that area, but beyond to include the profile of guests visiting the casino, and formulate impactful retail experiences relevant to their visit.

“When it comes to casino retailing, we also try to give shoppers a choice that they might not have easily accessible back home, which adds either a destination-based or complementary experience.”

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