Movie Theaters and the Rise of the Experiential Anchor
Report after report has shown that the modern consumer, especially millennials, values experiences over material goods. Smaller homes, fewer cars, and closer proximity to urban environs are all definitive of a growing trend toward less consumption and more experiences. According to John Gerzema and Michael D’Antonio, authors of the book Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell, and Live, 77% of the American population values how they spend their time over how much money they make. Their research also found that more than “two-thirds of the U.S. population preferred a reduction in consumer goods, with less emphasis on displays of wealth.”
Paired with the growth of e-commerce, this consumer shift has malls across the country losing traditional department store anchors like Macy’s, Sears and J.C. Penney. Sears recently announced it would close another 78 stores by summer 2016 and according to research and consulting firm Customer Growth Partners, these stores have been losing market share year over year, leaving them with only 2.5 percent of the U.S. retail market in 2010. In the last few years, mall food court staples like Sbarro and Cinnabon, have filed for bankruptcy protection, along with several others in the same category. Consequently, developers are coming up with alternative mixed-use platforms like luxury high-tech movie theaters, bowling alleys, grocery anchors and outdoor programming like yoga and concerts to turn malls into more community driven “experience and lifestyle centers.”
From Department Stores to Whole Foods
In a recent New Republic article called “The Mall is Dead. Americans Shop at “Lifestyle Centers Now,” the author described these centers as a “21st Century, community-oriented alternative to the soulless shopping mall.” The International Council of Shopping Centers (ICSC) describes them as “multi-purpose leisure-time destinations, including restaurants, entertainment, and design ambiance and amenities.” The Grove in Los Angeles, one of the highest grossing mall destinations in the country, is one such location; featuring a fourteen-screen Art Deco movie theater, live shows, and a popular farmer’s market—offering far more than the traditional mall model of the past.
Lifestyle centers have been cropping up in affluent zip codes for the last two decades, and feature a combination of mixed-use developments with surrounding apartments, restaurants, post offices, movie theaters and grocery stores. Whole Foods, Fresh Market and Trader Joe’s have replaced Safeway and Kroger for marketshare of consumers who want fresh ingredients, popular organic brands, artisanal cheese and craft beer. Williams Sonoma and Pottery Barn have replaced Macy’s and J.C. Penney for home furnishings, and movie theaters have become increasingly interactive with 3-D screenings, reclining seats and custom menus.
Large centers like the Mall of America and West Edmonton Center have always have large entertainment anchors, but more and more malls are moving toward the model of having equal parts retail and experiential to meet the demands of the consumer market. Today, one in four malls across the country features at least one non-traditional anchor tenant, according to research by Jones Jang LaSalle. And in order to maintain pace with competition, a mall can’t just plug in a traditional bowling alley or movie theater. In fact, White Hutchinson Leisure and Learning group, a consulting firm, recently reported that some centers are becoming responsible for both funding and operating their own entertainment values; a notion that runs counter to the traditional mall business model of managing and leasing individual brands and space.
The Rise of Mixed-Use Retail and Experiential Entertainment
Vanity Fair recently reported that moviegoers are no longer interested in the greasy popcorn and boxed candy offerings at concessions stands of yore. They want dry rubbed pork belly and a handmade cocktail to accompany the latest installment of Captain America and the Hunger Games. Nitehawk, an indie theater in Brooklyn and Alamo Drafthouse in Austin are two such examples of theaters reinventing the movie going experience, with personal wine lockers, leather seats, thoughtful movie selections, and apps to pre-order food, tickets and seats in advance. At Harrisburg Mall in Harrisburg, Pa, Jones Lang LaSalle Retail brought in Broadway Classic Productions, a local theater company, as a replacement for the former Boscov’s department store.
Madison Marquette recently added Silverspot Cinema, a 13-screen luxury theater featuring a dine-in restaurant and bar to University Place in Chapel Hill, NC. A boutique movie theater chain boasting an “enhanced entertainment experience” Silverspot is a prime example of where the aesthetics of movie theaters are headed. Inc. Magazine recently made several projections on what the movie theater of the future will encompass, and the results were interactive, 4-D and customized. Linking the technologies of Wi-Fi, NFC, RFID, Bluetooth and iBeacons, interactive advertising and voice activation will become more integrated into the movie theater experience.
With immersive sound systems, 4-D technology and virtual reality, as well as subscription services that mimic Netflix, where you pay a monthly fee for unlimited access to movie viewings, theater owners are combining tech and innovation to sell tickets. Theaters are also beginning to offer alternate programming to appeal to broader audiences, such as opera and premiere symphony screenings, and other limited performances viewings. If consumers can access any iteration of iTunes, Netflix, Amazon Prime, OnDemand and Hulu subscriptions from one high definition screen in their living room, movie theaters and other virtual and gaming experiences need to continue enhancing their physical environment with interactive dining and luxury seating to lure a new generation of movie goers.
