Every industry is noticing the effects of changing generational preferences and technological progress. The ways we shop, socialize, and amuse ourselves have all shifted into the digital age, limiting our opportunities to make real, in-person connections. The tasks that once got us out and about among our communities are now handled through screens, slipping us into a space of digital isolation.
However, the need for social and emotional experiences hasn’t gone away, and this shift is fueling a growing desire for real-life experiences and face-to-face interaction. As recently stated in Forbes, “Consumers are [now] looking for places to be—not things to buy—when they leave the house.” In fact, 74 percent of Americans said they’d rather spend money on an experience than a physical product.
Editor’s note: This guest post by Kim Schaefer originally appeared on VentureBeat.
The search for new, more entertaining ways of using shared social spaces and bringing people together has begun. With nearly 100,000 stores hit by the “retail apocalypse”, there’s ample real estate in need of revitalization and millennials, who currently make up more than half of the United States’ workforce, know just what to do with it.
Having grown up witness to the internet’s revolution, millennials saw how quickly communities changed with technology, giving them a very different viewpoint than that of surrounding generations. But the value of relationships remained, and they learned just as much from friends and teachers as they did from Nintendo and AOL Instant Messaging.
This generation is now the one with influence, and their memories of the pre-internet good ole’ days, combined with their love of technology, is driving the future economy. Through their nostalgia for genuine, emotional experiences, millennials are creating a new wave of location-based entertainment (or LBE) and positioning it as a prominent solution to empty real estate and struggling retail.
The gamers are now the gamemakers
Location-based entertainment (LBE) is about bringing people together, in real life, to share experiences. Arcades, water parks, and family entertainment centers — built by baby boomers and Gen X — gave millennials great childhood memories and a particular fondness for LBE. However during their youths, this focus was quietly overshadowed by the advent of the internet, and the scramble to secure smooth, online experiences caused innovation in LBE to stall.
Now, as the novelty of online experiences starts to wear down, millennials want to go back and recreate those childhood memories in grown-up, more immersive and tech-enhanced versions. Traditional occupants of brick-and-mortar retail continue to move into online distribution, opening up more and more real estate. At the same time, technology becomes even more accessible, creating perfect conditions for innovation in the LBE market.
Don’t get me wrong, putt-putt — laser tag, and movie theaters (the first generation of modern LBE) are still awesome things to do, but the potential for new experiences — to use modern technology and progress LBE into a new generation — is ready to be explored.
Having spent up to 9,000 hours of their childhood playing games, millennials are well qualified to call themselves the first generation of gamers. Now, they’re shifting into a new role — as game developers, forming the second generation of gaming. What was created by the first gen (Galaga, Pacman, etc.) has advanced beyond what we could’ve imagined, and now, the first kids to grow up playing these games are creating experiences of their own.
In this, millennials are charged with overcoming a whole new set of entertainment challenges. While LBE offers a variety of investment opportunities, a sustainable business model is still a tricky thing. In order for an LBE company to be successful, experiences have to appeal to broad audiences and have some level of repeatability — two aspects that one-dimensional places, like VR arcades, are struggling to remedy.
Bringing experiences and people together
Yet, numerous businesses have already shown success by grouping a variety of experiences in one area, adding entertainment value and accommodating a much broader audience — which makes for a more compelling, inclusive business model and heightens the user experience.
Places like Area 15 combine retail, art, entertainment, and technology, falling “somewhere in the no man’s land between shopping mall and amusement park.” Our organization, Two Bit Circus, is attempting to redefine both the arcade and the amusement park, with a 38k square-foot Big Top housing a variety of evolving, high-tech entertainment, along with a bar, food, and more to ensure that there’s something for everyone to enjoy.
Another company LiggettVille adds a “WOW factor” to existing retail locations by transforming empty space into adventure rope courses, aiming to create memorable experiences for shoppers. The same trend can be seen with Toys “R” Us who, unable to compete with less expensive online retailers (and vulture capitalists), enlisted the help of a company called b8ta to update their stores and turn them into interactive playgrounds.
There is a chance here for LBE to create new and wonderful social spaces — for malls to evolve into immersive entertainment and community culture centers, filled with inclusive experiences where everyone can create genuine, happy memories. With all of these factors together — the availability of real estate, decreased need for physical retail stores, increased need for human interaction, and the desire for unique, memorable experiences — the potential for innovation is huge.
Kim Shaefer is the president of Two Bit Circus, a Los Angeles-based experiential entertainment company. This guest post originally appeared on VentureBeat.