Immersive Entertainment, C-Stores, and Competitive Socialization

Short on Time, Big on Insights: Your monthly rundown on the most compelling narratives.

We can hardly believe it ourselves, but it's already the halfway mark of 2024 😳

Now that we're fully into the summer groove, let's dive into what's hot this season (aside from the weather, of course).

TL;DR for this month’s TL;DR:

⚽︎ Competitive socialization

🚙 C-stores

📺 Netflix House

☕️ Ripple effect from RTO

🌶️ Chili's going viral on TikTok

🛍️ The success of Macy's First 50

📈 H1 retailer results

Without further ado, let's delve deeper into each of these major June trends.

Caroline Wu , Director of Research

Summer Socialization Heating Up:  As we enter the summer months and thoughts turn to pool parties and BBQs, we're also seeing a ramp up in what we call "competitive socialization." 

These are places where you can have fun while playing games, with food and drink on the side. Some are fairly low key, like Punch Bowl Social, which features karaoke, bocce, Jenga, and darts. Others up the ante to training levels, like Toca Football. 

One we have our eyes on to enter the US market is Taroko Sports, a high-tech batting cage concept, which made quite a splash at ICSC.

Ben Witten , Head of Real Estate Strategy

The evolution of experiential and immersive retail continues with Netflix announcing plans to open the first Netflix Houses at two premier malls: Galleria Dallas and King of Prussia Mall. 

What do these malls have in common?

These super regional destinations offer a blend of traditional mall anchors, like Nordstrom and Macy's, robust luxury offerings and wide arrays of food and beverage options. Both mall trade areas are also significantly over indexed in the 'Ultra Wealthy Families' and 'Young Professionals' PersonaLive psychographic segments.

Elizabeth Lafontaine , Director of Research

This summer is shaping up to be the summer of C-stores. 

From Memorial Day Weekend through Mid-June, traffic growth has been the highest of 2024, and foot traffic is up compared to 2023 and 2022. 

Could this signal the return of summer car travel? 

That certainly might play a role, but the strategies implemented by retailers around prepared food and snack offerings set this sector up for success with consumers on-the-go during the summer months.

We will have to see if this trend continues beyond the Fourth of July, but C-stores continue to be the pinnacle of retail innovation, and consumers have rewarded them with more frequent trips.

Ethan Chernofsky , SVP of Marketing

The ripple effect. 

A dictionary definition would be “the continuing and spreading results of an event or action.”

In this case, the event of action in question is the Return to Office, and there are an array of new effects ‘rippling’ out from the ongoing recovery. One of the latest is the shift that coffee chains are seeing with a jump in the proportion of visits happening between 7:00am and 10:00am and those happening immediately before a trip to the office.

What does this mean?

First, the return to office is clearly having an impact in driving a recovery of certain trends.

Second, the rise in these visits indicates an opportunity for all businesses that are reliant on office traffic. 

But…. and this is the third takeaway…. for every action there is a reaction, and the opportunities happening in the ‘near the office’ environment mean a decline in the opportunity that had existed for those working from home. 

Hybrid work is here to stay, but not necessarily in the exact way that it exists today. As such, the suburban opportunities that it presents need to be embraced by businesses in order to maintain those benefits. 

Also, this is the latest chance to marvel at the unique success the coffee sector has seen, the growth potential it still possesses and its incredible capacity to succeed in an ever changing landscape.

Bravo coffee. Bravo

Ed Lavery , VP Investor Intelligence

Chili's is going viral on TikTok

for being cheaper than McDonald's and Placer.ai's foot traffic data shows its paying off.

Visits to stores in the last 4 weeks are ~20% up YoY.

Stephanie Atiase , VP of Marketing

Netflix is expanding into physical retail with Netflix House, an immersive entertainment venue. 

One of the first locations will open in 2025 at Galleria Dallas, occupying 107,000 square feet of the former Belk store. The venue will feature themed dining, live entertainment, and merchandise from popular Netflix franchises like "Squid Game," "Stranger Things," and "Bridgerton." 

This move aligns with the trend of malls incorporating experiential offerings to attract visitors. Technology platforms have been venturing into physical retail (e.g. Amazon Go) blending technology and shopping for a seamless experience. As reported by FSR Magazine - Placer.AI insights suggest Malls are witnessing a revitalization.

In March, traffic to indoor malls, open-air shopping centers, and outlet malls rose 9.7 percent, 10.1 percent, and 10.7 percent respectively, compared to March 2023. In Q1, visits to open-air shopping centers surpassed 2019 levels for the first time since COVID lockdowns.

While Netflix House aims to enhance consumer engagement and strengthen its brand presence in a post-COVID experience economy, we will continue to track the role Netflix House will play in driving demand to retail outlets at the shopping centers they occupy. 

Kevin Ching , Head of Advertising

I want to applaud TJX and the Macy's First 50 for their same store growth results for Q1.  

I am especially encouraged by the success of the Macy's First 50. 

For those of you hearing about the Macy's 50 for the first time, I encourage you to look it up. 

It just goes to show what the right store format, assortment, layout and marketing communications can do to bring people into the store, and ultimately convert to higher sales.  Business owners, you've invested in CRM. 

Now monetize that CRM by optimizing the in-store shopping experience.  Placer store clustering can help!

Thomas Paulson , Director of Research & Business Development

This month, we wrapped up the first half of the year, and overall, consumer spending and retailer financial results were solid. 

We expect the momentum to build in the summer and fall, given easing inflation and moderating interest rates. Lower interest rates would be especially helpful to home-related brands, while lower grocery prices would benefit general merchandise categories.

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