Report: Times Square landlords want more lucrative 'experiential' retail
Several landlords of buildings in New York City's Times Square are seeking out tenants who can provide “experiential retail" because such businesses tend to enjoy higher sales than traditional retailers do, Sherri White, executive vice president and partner at real estate development company Witkoff, told The Wall Street Journal.
Times Square landlords are also looking to appeal to local workers and city dwellers in addition to the area’s traditional influx of tourists. “What matters is entertainment and food,” Kushner president Laurent Morali told the Journal.
Rents in the area fell 18% compared to last year to $2,104 per square foot — the biggest drop in Manhattan, according to numbers from commercial real estate services firm Cushman & Wakefield cited by the Journal. Times Square’s third quarter property availability rate increased 11 percentage points to 22% from last year.
Times Square has long been home to retailers with experience-based allure, but developers want even more. And it’s not just Times Square: Having four walls and well-stocked shelves is no longer the name of the game for brick-and-mortar retail anywhere, including malls. More than ever, retailers dedicated to pleasing their customers across all channels must give their stores the attention they’re due, experts say.
“Shopping should be an experience, and the history of shopping suggests it can be,” retail futurist Doug Stephens told Retail Dive earlier this year. “I recently visited the Spice Bazaar in Istanbul and you see instantly how shopping evolved from being a completely immersive and sensory experience. The sights, sounds, smells and social interactions were incredible. Even the grand department stores of the mid-1800’s were a spectacle and an aesthetic delight.”
Physical stores, especially in areas like Times Square that attract people already primed to see a show — the city’s Broadway theater district is there — must work hard to compel people to buy. In the age of Amazon, which has made buying online painless and fast, that’s become even more crucial. Compounding that is the emerging consumer priority of experiences over the accumulation of goods.
“Unfortunately, as retail scaled through the 70’s, 80’s and 90’s, we lost that experiential nature,” Stephens said. “Retail became more about the acquisition of material goods and less about the enjoyment we could have in shopping for them. Stores became concrete boxes, devoid of any beauty or soul. Thankfully, I think we’re heading into a new era where how things are sold will be as important as what is being sold.”
- Wall Street Journal Times Square Landlords Seek Tenants With ‘Experience’
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