Are Public Spaces the New Anchor Tenant in Retail?
Posted in News -
ORANGE COUNTY, CALIFORNIA, (October 9, 2017) – A new trend is emerging in retail destinations in response to evolving customer expectations: more public spaces. In these spaces, today’s best designers, developers and owners are incorporating immersive experiences and entertainment attractions with the purpose of drawing guests in, increasing their length of stay and inspiring repeat visits.
“This emerging trend points to an important question for owners and tenants alike: Are public spaces on track to become retail’s new anchor tenant?
Four important drivers fueling the reduction of traditional anchor footprints and investment in experiential retail include:
Public spaces increase foot traffic
Developers and owners understand that well-designed public spaces are a draw to customers and retailers. For this reason, many are investing in top-of-the-line attractions such as show fountains, themed environments, or sophisticated urban gardens that create immersive experiences for customers. For example, Outside The Lines Inc. recently created a show fountain at the Legacy West development in Plano, Texas, which helped the center’s public space quickly become the centerpiece of the $3 billion mixed-use asset. The fountain is integrated into an outdoor entertainment and gathering area that is cohesive with the surrounding environment. Today, guests crowd around the fountain for its scheduled shows, which infuse music, lights and grandeur to deliver an experience that attracts thousands of people each week.
Owners can better monetize centers with public space attractions
Retail developers and owners are increasingly recognizing the monetary value of retail entertainment — these attractions often pay for themselves within several months. For example, at The Village at Meridian, a large retail center in Idaho developed by CenterCal Properties, our team created a large show fountain in the main gathering space. During its construction, many of the food and beverage tenants sought out the owner to ask for patio space with views of the show. CenterCal quickly realized that it was possible to monetize these formerly non-revenue-generating spaces and offer them at premium rents.
Public space attractions can also be the key to attracting top-tier retailers to a development. At Station Park, an upscale retail-entertainment destination in Utah, the owner and developer was courting a major technology retailer, but to no avail. After OTL completed a huge show fountain for the project, that same technology retailer decided to join the center, noting that the fountain would be a draw for traffic.
Visitors stay longer in well-designed gathering spaces
In many U.S. secondary markets, quality entertainment can be difficult to find. Retail gathering spaces that feature an engaging, interactive experience can become a community’s source of entertainment. For example, our fountain at Station Park not only attracted major retailers, but also became a major community gathering space in the city of Farmington, Utah. The 27 different water shows throughout the day are now a staple in this affluent North Salt Lake City neighborhood. By investing in public space attractions like these, owners can elevate their destinations and keep visitors at their centers for longer.
Increased dwell time increases sales
A study conducted by MIT and Path Intelligence quantified that for every 1 percent increase in consumer length of stay, sales increase by 1.3 percent. Retail owners and developers are beginning to recognize that immersive public spaces are the key to increasing length of stay and capitalizing on this opportunity for sales increases. As public gathering spaces and attractions continue to garner foot traffic, increase length of stay, attract top-tier tenants and positively affect sales, today’s retail developers and owners are beginning to recognize a shift in the concept of an anchor tenant. By investing in well-designed public spaces and immersive experiences and attractions, shopping centers will soon find that these are the spaces people want to visit over and over for years to come.
— J. Wickham Zimmerman is Chief Executive Officer of Outside the Lines, Inc., a design-build themed construction company that specializes in creating one-of-a-kind rockwork, water features and themed environments for retail entertainment, hospitality, gaming, and golfing projects around the globe. Contact him at email@example.com.
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