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Back to basics

The graphics will be no less glitzy, the technology no less robust. But retail theming projects will be palpably different in 2002: developers, retailers and designers alike are determined to refocus on selling product.

“You've got to get back to the basics that you're there to sell products — that's how you make your money,” notes Tim Knipe, director of business development for North Hollywood, Calif.-based Scenery West.

Keith James, president of both Cincinnati-based Jack Rouse Associates and the Themed Entertainment Association (TEA), agrees. “Throughout the 1990s themed retail and food people tended to forget the fundamental part of the business: to sell things,” James says. “A lot of nice decoration was done, but they forgot they were running businesses. Today we have to be a lot smarter, and ask clients, ‘Why are you doing this? What's the ROI?’”

Retail theming today must also relate to brand expression, the true engine of the retail business, adds Brian Edwards of Los Angeles-based Edwards Technology. “We are more challenged to put all the pieces together to create something more meaningful that includes the product,” Edwards says. “Malls have gotten so homogenous now you can't rely on them to do it for you. The retailers need to take their destinies into their own hands. The same old stuff will not cut it for another year.”

Different projects, not fewer

While this back-to-basics manifesto is clearly a response to the economic downturn, theming professionals say they're not necessarily less busy. Rather, the rationale — and sometimes the funding — behind themed retail projects has changed. “Our first six months are going to be busier than any comparable period in probably the last ten years,” Edwards says. “And it's virtually all entertainment and retail work.”

Tony Christopher, president and CEO of Landmark Entertainment Group, Los Angeles, and editor-in-chief of TEA's magazine, Behind the Themes, also describes an increase in business. It is clear, however, that private financing is virtually unavailable, leaving the retail corporations to fend for themselves. “Getting projects financed is virtually impossible,” says James. “We are working on projects where financing had already been obtained or where large companies are self-funding them. The bankers we're talking to feel it will be at least the third quarter before things start to perk up.”

The economy has obviously slowed down the funding of questionable projects, Edwards adds. “But corporations with money can't sit back and do nothing,” he says. “This just might be the time we start to see corporations push their own brands. We've been very busy in the first half of the year working for Leggo, and we're also looking at doing some work for Apple stores.”

A related trend in regional malls is the growing tendency for developers to find outside sources willing to pay for certain themed areas of the mall — usually local businesses that want to promote themselves to a captive audience of mall shoppers.

NBGS International of New Braunfels, Texas, for example, specializes in creating branded play areas at malls. “The shopping centers have found that the play areas are pretty expensive if they're going to do them out of their own budgets,” notes Phil Moya, a national sales manager with the firm. “A lot of the centers that we've dealt with recently have gone out and found sponsors — everything from local newspapers to local hospitals to car dealers and utility companies.”

NBGS encourages developers to look into finding sponsors for these areas. “We can even help them do that because of the portfolio that we can show people,” Moya notes.

The firm recently created an environment at South Park Mall in San Antonio, Texas, that was sponsored by a local Ford dealership. NBGS built a miniature convertible Mustang with a moveable steering wheel that children sit in and play on, as well as a play model of a Ford F-150 pick-up truck. “There's a facade in the back of the play area that represents the dealership,” Moya explains. “It looks just like the front of the actual dealership, and there's an armadillo, the Tower of the Americas, and some other pieces unique to the San Antonio area.”

NBGS has created play environments for some 75 malls. The firm frequently works with Chicago-based General Growth Properties, the nation's No. 2 mall owner. “They've made an all out effort to go out and try to land sponsorships for all of their play areas,” Moya notes.

Market trends

Theming projects in the pipeline and on the drawing board clearly reflect both demographic and economic shifts in the population. “There is a narrowing of the middle class, a larger number of wealthy people and a growing number of working-class people,” Knipe explains. “In the high-end retail frequented by the top half, you're seeing a real change from what was traditionally a big box. For example, Oakley sunglasses, a very expensive product, is spending their money on specific, focused theming to identify with their brand — nothing frivolous, not eye-candy for eye-candy's sake.”

And a new Toys “R” Us store that Knipe's company designed was “all tricked-out, looking for the high-end market,” Knipe adds. On the other hand, stores like Wal-Mart are spending more money on market outreach than on theming. “They're spending their money wisely on branding in media,” Knipe notes.

“Indirect” retail theming

Some of the projects in the pipeline are designed to boost retail sales, but do not fit the strict definition of “retail theming.” Take, for example, Malaysia Land, outside of Kuala Lumpur. “The developers wanted to do an outlet center, but they are far from downtown,” says Christopher. “We are working with them to create more attendance and more shopping. We are combining four unique attractions to give it an image, but they will be integrated into the shopping experience.”

Christopher's company is also active in branding projects. One, a New Orleans project called the “Grammy Exposition,” involves big-name brands in restaurant and retail. This project, carried out in conjunction with the Grammys and NARAS, will have a large retail component including not only branded merchandise but, Christopher hopes, merchandise representing performing artists, for a unique retail mix.

Technology rules

Despite its perceived high cost, technology remains a critical component of retail theming. In fact, say observers, it meshes nicely with the new “all-business” attitude being adopted by the theming idustry.

“The technology we use may be expensive, but it's also renewable; it's easy to refresh things,” says James. “When we use special effects, we need to make sure we're doing them for the long-term. As a rule, whether it's American Eagle, Old Navy or Gap, they are very focused on renewability that will keep them trendy — particularly in selling to kids 12 to 30 who watch MTV. This is a very significant part of working smarter; you put in a spectacularly expensive monitor, but you only put it in once.”

Edwards agrees. “Digital software is becoming much more cost-effective; we can do more for less,” he says. “We are at the point now where we can send digital movies out over the Internet.”

One thing that has changed since Sept. 11 is the amount of information we demand to see all at once. We have become more used to “multi-tasking,” Edwards says. “Since Sept. 11, CNN and others have been asking you to suck in two or three things simultaneously. As irrelevant as they say network news is, that's how irrelevant a one-month-old video is in retail space.”

That means opening up new layers of information for retail customers at greater speed. “MTV is almost slow now,” says Edwards. This can be achieved inexpensively by relying on well-designed, frequently updated templates, Edwards notes.

‘Niche theming’ in the future?

While bringing new projects on line, theming professionals are also dreaming of future vehicles for linking retail and theming. “We have two new ideas in development,” says Christopher. “One is what we call the ‘E Court.’ Food courts brought established brands together in a single retail location. We think we can do the same thing with entertainment.”

In this vision, entertainment options will be linked with a food court. “It could be anything from unique bowling centers to putt-putt golf to cosmic bowling or an Imax theater,” Christopher says. “You can combine food and entertainment and have a great attraction.”

Another concept on the drawing boards is a completely kid-oriented shopping venue. “The trend of the future is to narrow-cast,” Christopher asserts. “In the kids' mall, there will be an entire wing completely dedicated to children — toy stores, ice cream parlors, Kids' Gap, and so on.” Christopher says his firm would partner with a major entertainment company in such a venture.

James also predicts a large number of niche opportunities for highly themed retail food outlets at stadiums and arenas. “This is particularly viable in downtown urban markets like Indianapolis' Pacer's Arena or Phillips Arena and Turner Field in Atlanta, which my company handled,” James says. “We're very busy doing this type of work all around the world.”

Steve Lewis is an Atlanta-based writer.

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