The Village at Meridian in Meridian, Idaho, demonstrates the value of the Christmas experience at retail. | Photos courtesy a representative of Outside the Lines Inc.

Why Bigger Is Better in Retail Holiday Experiences

Carrie Rossenfeld Retail

It’s no secret that most retailers put a tremendous amount of focus on holiday sales as a reflection of their success each year. But the retail environment has become more competitive than ever as retailers vie for consumers’ holiday dollars in an era of online shopping and same-day shipping. So, how can retail owners support their tenants to drive these holiday sales?

In the past, the answer may have been events or promotions, but in today’s retail world, the answer lies in unique experiences, according to a representative of Outside the Lines Inc., a Newport Beach, California–based design-build themed construction company that specializes in rockwork, water features, and themed environments for retail entertainment, hospitality, gaming, and golfing projects.

An example of this trend locally is Anaheim GardenWalk, billed as an “eatertainment” destination close to Disneyland Resort and Anaheim Convention Center, which will host “Winter on the Walk,” a family event on Saturday, Dec. 15th, from 1 p.m. to 2 p.m., according to a release from a representative of Anaheim GardenWalk. The event, which dates back to 2010, will feature a live one-hour concert presented by nearly 200 professional, community, and student trombone players, playing songs including holiday classics.

In addition to the concert, the release says, the GardenWalk will feature a cascading “snowfall” that day to serve as the backdrop for holiday photos, and guests are invited to participate in an ugly sweater contest for a chance to win a $100 gift card to the House of Blues.

J. Wickham Zimmerman

SoCal Real Estate spoke with J. Wickham Zimmerman, CEO of Outside the Lines Inc., about how retail landlords are incorporating the holiday-themed experiences that consumers crave into their centers, how these experiences are tied to sales, and what’s next for holiday retail experiences.

SoCal Real Estate: How are today’s retail owners integrating holiday-themed experiences into their centers?

Zimmerman: The foremost trend in retail holiday experiences can be summed up in one phrase: bigger is better. In a survey conducted by PwC last year, millennials reported that 52 percent of their holiday spending would be on experience-related purchases, compared to 39 percent for older consumers.

As the most powerful cohort of consumers continue to clamor for experiences, retail owners and developers are answering with a resounding “Yes, we can!” Large integrations such as ice rinks, lavish Santa houses, and fully integrated water and entertainment shows are becoming increasingly popular throughout the nation.

Retail owners and developers understand that experiences that outmatch their local competition are more likely to attract large groups and increase length of stay for their shoppers.

How are these experiences tied to sales?

For every 1 percent increase in consumer length of stay, sales increase by 1.3 percent. This provides a monetary incentive for retail owners and tenants to focus on length of stay as a measurable impact of strong performance. Entertainment experiences such as fountain shows and ice rinks give guests a reason to linger and enjoy a center for longer than they would have otherwise.

Beyond length of stay, holiday sales remain a major focus for retailers and are a key indicator on which they base future rental and expansion decisions. Supporting these sales through on-site experiences helps to strengthen the relationship between owners and tenants, which in turn can help to support a healthy sales trajectory for the long term.

How are holiday-themed experiences changing as retail evolves?

Today’s owners and developers are increasingly seeking authenticity in their holiday experiences.
While retail product of the past would simply pipe Christmas soundtracks into the corridors and perhaps hang some garland, today the focus is on state-of-the-art equipment and technology that can bring the “next best thing” to a destination.

For instance, our team designed and constructed a show fountain at The Village at Meridian in Meridian, Idaho, which is a destination that is widely known and beloved in the surrounding area, based in large part on its famous fountain show. While this fountain captivates audiences year-round, it serves a special purpose during the holiday season. Featuring musical favorites such as “White Christmas” and “Let it Snow” playing through a state-of-the-art sound system, the choreographed water and holiday-themed lighting deliver a winter wonderland of song-and-dance, bringing holiday cheer to thousands of visitors each week. The show itself is fully immersive, connecting to the property’s site-wide speaker system and projecting snowflakes on store facades throughout the center to bring all guests into the action.

Much of the evolution in this type of holiday experience is focused on technology advancement.
For example, at one time, changing a fountain show required an on-site producer and technician working from a soundboard, often for many hours over several days. Today, however, the OTL team can make changes to songs, choreography, lights — an entire show change — all remotely. Remote management of entertainment equipment saves money for retail owners and enables the show to feel fresh and authentic always.

How are these experiences being monetized?

Monetizing holiday experiences can be approached in several ways. Many owners simply recognize the boost in holiday sales that comes from attracting and retaining guests for longer periods during these key shopping dates. Others recognize the opportunity for ancillary revenue from kiosks and pop-up retailers — all of whom work together within the hub of activity that often comprises a fountain, Santa’s house, ice rink, etc. Vendors offering hot cocoa, seasonal treats, or easily accessible gifts can offer additional rent during the holiday season.

Another marker of monetization can be looked at from a more macro view: in vacancy trends. For example, retail centers that offer high-end, more carefully curated experiences such as show fountains tend to be regarded as more affluent and popular in their respective regions. This often contributes to higher occupancy rates among retailers when compared to competing properties without these entertainment elements.

What will the “next generation” of retail holiday experiences look like?

The “bigger is better” trend is on track to continue for many years ahead. Owners will continue to look for the latest and greatest in technology and holiday experiences. We expect to see (and build) fountains that are digitally enabled to allow guests to direct or conduct the water show using hand motions with their smartphones. We also expect to integrate more authentic winter design elements, such as ice sculptures and snow, to give consumers the Instagramable moments they crave.

It is also likely that retail owners and developers will begin to seek out partnership opportunities to offset the costs of these experiences. For instance, centers with theatres may partner with movie studios to feature content from new releases projected onto a wall of water as advertisements. The opportunities from both a creative and marketing standpoint are truly endless.

The key component is that owners must keep up with the times. Owners and developers who recognize the need for high-quality holiday experiences and take the time to implement them will be best positioned to achieve strong returns in the form of both consumer and retailer loyalty.