Retail Midwest

The secret to retail success? It's about experiences

The secret to retail success is about experiences,ph01
Planet Granite will open two climbing gyms in Chicago in 2019.

Live in the Chicago neighborhoods of Wrigleyville or Lincoln Park? You’ll soon have the chance to scale 55-foot climbing walls, stretch your muscles in yoga classes and build your strength with free weights all in the same building. That’s when Planet Granite Climbing, Yoga and Fitness opens new gyms in these neighborhoods in just one more example of retailers offering experiences to attract consumers.

Experiential real estate is more than a trend. It’s a way for physical retailers to survive in a world increasingly dominated by Amazon and ecommerce. The concept is simple: If retailers can offer consumers something they can’t buy online, they just might be able to survive with brick-and-mortar locations.

And scaling massive climbing walls? That’s an experience consumers can’t order from Amazon.

Selling experiences

Robert Cohen, chief executive officer of Planet Granite and Earth Treks, said that the new climbing gyms will be open in both Wrigleyville and Lincoln Park in late 2019.

The Wrigley Field-area location at 1111 W. Addison St. will feature three floors and 40,000 square feet of bouldering, yoga and fitness equipment. The gym in Lincoln Park, at 1450 Dayton St., will also feature 40,000 square feet of climbing and bouldering activities.

Cohen said that his company’s climbing gyms offer experiences that consumers can’t get anywhere else, including online. The facilities are large, and they change. Cohen said that Planet Granite workers will rearrange the rock-climbing courses every eight to 10 weeks.

“We offer moments of fresh discovery,” Cohen said. “It’s like a parallel universe. You make an investment in it and it continues to change, evolve and push you, challenge you. It’s a living, breathing thing in that way. You come in and put your mind at ease. You go out and boulder. Four weeks later, all the bouldering is reset. You now face new bouldering challenges than before. Just like people change all the time, the gym is changing, too.”

Planet Granite gyms feature a social aspect, too, Cohen said. Gymgoers meet others who are passionate about climbing. They compare strategies and challenges. Cohen said that the average customer at his company’s gyms spend two to three hours at a time at the facilities.

And much of that time is spent socializing and comparing notes with other climbers.

“A good part of our strategy for retaining customers is that social aspect of climbing,” Cohen said.

Planet Granite has been growing steadily. Outside of the two upcoming Chicago locations, the gym has 11 locations across the country. Each gym features an average of a little under 35,000 square feet. Cohen said that Planet Granite and Earth Treks – two climbing gyms that completed a merger in November of 2017 – will continue to expand.

“We want to open more gyms,” Cohen said. “We are activity looking at a dozen markets at a time. Even in Chicago, two gyms are not nearly enough. For us, finding a building that is the right size is the biggest challenge. But who wouldn’t want to have 25 or 30 locations?”

The plan? Cohen said that he’d like his company to open another 10 to 15 gyms in the next three years.

The formula for success

Planet Granite and Earth Treks’ success isn’t by accident. The climbing gyms are following the new model for retail success: They offer experiences that consumers can’t get through online retailers.

It’s a model that Lou Frango, senior associate with the Southfield, Michigan, office of Colliers International, says that brokers are seeing more often. Companies are opening non-retail uses in what have traditionally been retail locations.

And these non-retail uses can’t be duplicated online.

He points to Goldfish Swim School and Aqua-Tots Swim Schools. Both of these companies, which offer swimming lessons to youngsters, are growing rapidly, opening in spaces that would normally house apparel, drug stores or other more traditional retailers.

“Those are fantastic re-uses of existing space,” Frango said.

In Frango’s market, a swim school recently opened in a former CVS location. And Frango said that Colliers is pitching an additional former CVS to the schools for another location.

Jungle Java, a company that offers climbing facilities for children and coffee service for their parents, is growing quickly, too, Frango said. This company is another that is targeting spaces that once housed department stores or other traditional retailers.

“Fitness is huge today,” Frango said. “Either the big-box fitness of 30,000 square feet or more or the smaller Orangetheory types of uses are good choices today. Those are extremely active in our market and everywhere, really.”

The owners of retail centers might be hesitant to lease space to non-traditional uses. But Frango said that this hesitancy is waning as owners become increasingly realistic about what retail uses work today and which struggle.

“No owner wants a vacancy forever,” Frango said. “Some of these spaces used to be perfect for Hallmark stores or video stores. But some of these uses no longer exist. For true retail uses, the pie has gotten smaller. Those segments that are still doing well, the phone providers, mattress stores or fast-casual restaurants, all want to be in an outlot right next to the street. What do you do with the other spaces? You need to fill them with something.”

This doesn’t mean that owners today are willing to fill their empty spaces with every non-traditional user. Frango says that most of his clients will still refuse medical marijuana providers. Tattoo parlers are still rejected by others. The same holds true for vaping centers.

But other non-traditional uses? They continue to thrive.

Another example? Colliers International earlier this year closed a lease for 3,464 square feet of retail space at 22950 Michigan Ave. in Dearborn, Michigan, for Detroit Kid City.

Frango represented the landlord in the lease.

The new tenant, Detroit Kid City, is an indoor play area for children. The facility features a mini version of Detroit complete with an automotive factory, music studio, school house, pizzeria and more. Detroit Kid City also houses a café serving coffee, smoothies and Michigan-made snacks.

The Dearborn spot is Detroit Kid City’s third location across the Detroit area. The company hopes to open its new play place this fall.

Buzz matters, too

Not all successful retailers today are focusing on jungle gyms, swim schools, bowling centers or indoor driving ranges. Restaurants can thrive today, especially those whose very names inspire excitement among customers.

Consider the case of Shake Shack, a fast-food shop known for, as its name suggests, its hamburgers and milkshakes. The retailer got its start in 2001 as a hot dog cart in Madison Square Park in Manhattan. In 2004, that hot dog cart became a permanent kiosk.

Customers loved it. And today? Shake Shack boasts more than 165 locations. And these locations aren’t limited to the United States. The chain has locations in China, Japan, Turkey, Bahrain and Kuwait, among other international spots.

The secret to Shake Shack’s success? In one way, it’s simple: Diners love their burgers and shakes. But then there’s the experiential aspect. It’s true that shoppers can find plenty of burger places. But there’s only one Shake Shack, and this means that every time the restaurant chain opens a new location it becomes big news.

As an example? Shake Shack is poised to open a new location at the Easton Town Center, a $225 million mixed-use complex just northeast of Columbus in Easton, Ohio. The new Shake Shack will be open here in early 2019.

This is a big win for Steiner + Associates, the property manager of the Easton Town Center. The Shake Shack will surely draw even more people to the mixed-use center.

“Shake Shack has gained a significant following,” said Anne Mastin, executive vice president of Steiner + Associates, in a statement. “It’s a great compliment to Easton’s dining mix and best-in-class retail and entertainment uses.”

Mastin said that the restaurants in Easton account for more than $100 million in annual revenue. That figure will certainly go up with the addition of Shake Shack.

The 3,523-square-foot Shake Shack will feature an outdoor patio and seating for more than 100 guests. The Easton Town Center location will be built with recycled and sustainable materials. Booths will be made from lumer certified by the Forest Stewardship Council. Table tops will be made from reclaimed bowling alley lanes.

Easton Town Center will be Shake Shack’s second location in Ohio. The chain also has a location in the Pinecrest mixed-use district in Cleveland.