What shopping center operators can learn from the decline of one industry and the rise of another.
By Robb Wagner
I started in entertainment nearly 20 years ago as a creative producer for live-broadcast specials like the MTV Video Music Awards and MTV Movie Awards. After the Great Recession, and with the broadcast industry embracing change about as slowly as a sloth wearing ankle weights, I seized the opportunity to ‘jump ship’ and help other industries develop their own experiential entertainment futures. One such industry was cruise lines.
In 2009, cruise lines had been devastated by a global paradigm shift (the Great Recession) and needed new ways to monetize their big existing investments. With competition for audience share steadily increasing, they also recognized the urgency in making new investments in experiential transformation.
This was a sink-or-swim situation, and the cruise lines chose to swim… or rather to keep floating and transform the experience that began when guests stepped aboard their ships. They knew this transformation meant investing in entertainment infrastructure with a broader vision that required outside help.
In 2010, I was among a group of external creative partners headhunted by a consulting firm for the world’s largest cruise line. Coming from the broadcast industry, where most important decisions seemed to be intuition-based, I was impressed when I learned they were using actual data to understand their future customers.
Over the ensuing years, I worked in the industry to help develop and reinvent its entertainment experience, incorporating some of the radical transformations that helped cruise lines become entertainment leaders in their own right. I was in the eye of the storm, witnessing a decade of growth in the cruise line industry that led to the COVID-19 pandemic.
I also visited a former high-level television colleague in her luxury Times Square office suite. She sighed when I talked about the innovative entertainment we were developing around cruise line audiences.
“Wow, Robb. You can’t imagine how frustrating it is for me to be part of a big, slow-moving industry, where executives still think they know what people want, then order a pilot or presentation, show it to a focus group, and spend millions of dollars only to see the project fail. And then they wonder why.”
“Actually, I can,” I told her, recalling a conversation I’d had with another television executive whose network called me asking for help developing an entertainment show starring avatars. When I asked how the network knew their audience wanted a show starring avatars, he told me they didn’t know. I was told a decision-maker would greenlight this multi-million dollar project based on gut feelings. I didn’t accept the job. Not surprisingly, and very unfortunately, the avatar project failed.
This was just one of the many examples underscoring the broadcast industry’s systemic failure to adapt quickly and innovate based on real data, whereas the cruise line industry, on the other hand, took post-recession transformation seriously with investments in experiential transformation that are still paying off today.
The big cruise companies analyzed the needs of their future audiences and used that intel to develop and implement new entertainment concepts. Nearly 12 years later, emerging from the pandemic, they continue to analyze and transform their entertainment experiences around audience wants and needs.
What does any of this have to do with the future of retail? A lot. Hear me out.
Commercial property owners, who were already suffering well before the pandemic plunged shopping center real estate values by some 60% in 2020, are now in a very similar position to the one shared by the cruise line industry after the Great Recession:
- Big existing investments they need to monetize
- Steadily increasing competition for audience share
- Need to make new investments & transform
Let’s face it. At a time when consumers can get same or next-day deliveries of practically anything they want by merely touching their phones, shopping centers have got to do a hell of a lot more to draw and retain physical traffic. They need to offer powerful entertainment experiences to lure people in and make the outside world cease to exist when people step inside. They need to make customers feel as if they are not merely entering a place to go shopping, but are embarking on an entirely new world of unique and memorable experiences to share with their friends and family.
Shopping centers are in a position to deliver live and digital experiences, and provide extra layers of entertainment that consumers can’t find anywhere else. Video content can help create a more complete experience to keep customers engaged. Constant innovation of entertainment experiences inside and outside stores can provide something completely new and exciting for guests. If done well, this can trigger dopamine and leave customers wanting more.
The rabbit in the hat for shopping centers is their accessibility. Not everyone can book a week-long cruise to the Caribbean, but Americans can easily spend days or evenings out at the shopping center, especially if they’re offered something people have never experienced before.
Shopping centers have inherent magic that is begging to be built upon. They can transform and become entertainment leaders, providing the experience that today’s (and ideally tomorrow’s) consumers crave. But they need to radically shift the customer experience they deliver.
Borrowing a cue from the cruise line industry, which is now entering a period of explosive, post-pandemic growth, shopping centers can transform the typical mall trip into a completely unique entertainment experience that gives people more reason to leave their homes.
If they take post-pandemic transformation seriously and invest in their experiential entertainment future like cruise lines, I predict a retail riot. The good kind of riot.