Experiential Retail: Why It’s Popping Up More in Manhattan and Elsewhere

Once very niche, the concept is becoming a bigger part of brick-and-mortar's post-COVID recovery

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They say experience is the best teacher, but these days it’s also a good tenant.

Whether the action revolves around ice cream, slime, Gustav Klimt paintings, weed or miniature set pieces, retail spaces that sell an experience rather than a product are cropping up everywhere in Lower Manhattan.

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So-called experiential retail destinations are often relatively small — usually offering just an hour or two of activities or things to see — but cost more than the average New York City museum, at $28 to $45 a ticket. 

At the corner of Broadway and Canal Street, a graffitied and long-vacant Art Deco bank building has been turned into a series of interactive art exhibits dubbed INTER_.

Visitors walk through a series of dark spaces where calming, colorful animations and videos play along the walls and even the ceiling, including a dome-shaped room where people can use physical movement to push and make waves in animations of flowers, water, fire and abstract art along the walls. Disembodied feminine voices tell you to reflect on your life, consider the world, and be mindful while moving through it. 

The interactive elements are powered by motion-tracking and laser sensor technology — known as lidar — along with dozens of cameras, which record visitors at various points in the exhibit and then play the clips, on a delay, in a mirrored, kaleidoscopic video gallery located just before the exit. One room features large, swirling animation that users can control by shifting crystal balls set into a large table, while another is decorated to resemble a cave and allows people to trigger different lights and sounds through movement. Another room toward the end is mostly dark, with backlit gongs on the walls and a floor that vibrates, filled with ambient sounds meant to emulate a sound bath. 

“There’s like a very loose inspiration from The Tibetan Book of the Dead, which tells the journey of the soul through birth and onset of consciousness, interacting with the elements of the world,” explained Ryan Nelson, founder of INTER_. “Then the last space is like the world between worlds. One of the culminating rooms is a very white room with camera feeds from different parts of the experience. We’re trying to set it up so you can see yourself.”

Nelson said that he and his partners started working on INTER_ just before the pandemic in 2019. Then, in 2020, “We saw a big opportunity for people to get off their couches and interact with each other after COVID. We want visitors to come away with the feeling that everyone is connected, and everyone is special and unique, and we want everyone to be mindful and live in the moment.”

INTER_ opened last September and intends to stay long term, occupying 10,000 square feet at the old bank at 415 Broadway on a 10-year lease. Nelson says he hopes to keep it fresh by adding new exhibits, partnering with outside artists, and giving the space a full overhaul every five years or so. He felt that INTER_ could encourage repeat visitors, much like a museum. Tickets cost $27 for kids and $36 for adults, pricier than the average $25 entry to the Whitney or the Museum of Modern Art. 

“In an age that’s increasingly digital, people can do more things at home,” Nelson said. “But humans are social animals. We wanted to give an alternative option that doesn’t involve drinking or eating.”

Of course, INTER_ isn’t the only experiential retail game in town. Indeed, the current trend was sparked by the Museum of Ice Cream, which opened in 2016 and nailed down a long-term flagship in SoHo just before the pandemic. Although some jaded New Yorkers may never set foot in the candy-colored ice cream palace at Broadway and Prince Street, it manages to attract long lines of tourists and families, along with events ranging from birthday parties to corporate retreats. 

Lower Manhattan has become a magnet for these businesses. The area has attracted a weed museum called House of Cannabis to the corner of Broadway and Howard Street, interactive art museum Color Factory on Spring Street, the Museum of Illusions on Eighth Avenue and 14th Street, and miniature art exhibit Small Is Beautiful on Broadway by Waverly Street.

Like many experiential retail operators, the Museum of Ice Cream has successfully expanded to other cities, including Austin, Singapore, Chicago and Shanghai. Nelson hopes INTER_ will eventually expand too, maybe to a tourist-heavy outpost like Las Vegas. 

Most of these concepts start out with short-term retail leases, trying out six months or a year in a space to see if they can attract enough visitors to justify rent and operating costs. 

“A lot of these retailers, including the Museum of Ice Cream, start as pop-ups because they want to test the concept, test the location, before they fully commit,” said Beth Rosen, a retail broker at Ripco. “Now that a few are open and successful, they might start with longer-term [leases].” 

Rosen worked with Sloomoo Institute, an interactive experience for kids that revolves around making art and playing with slime. Sloomoo signed a six-month lease in SoHo in July 2019, and, once the pandemic hit, founders Karen Robinovitz and Sara Schiller believed they could turn slime into a long-term business. The pair decided to sign a 10-year lease in the middle of 2021, with the pandemic in full force. 

“They felt comfortable that they would be able to get their feet back on the ground, and the landlord felt it was worth it to keep them,” said Rosen. The slime attraction opted to stay in the same spot at 475 Broadway, between Broome and Grand streets, and renovate the space for more interesting, longer exhibits. 

Rosen pointed out that these kinds of attractions can be more interesting for kids than the Metropolitan Museum or the Museum of Modern Art.

“A regular museum, it’s not going to be that exciting to them,” she said. “The Museum of Ice Cream, Sloomoo Institute, it’s going to be more engaging for them.” 

Sloomoo also expanded to other cities last fall, taking 20,000 square feet in Chicago’s River North neighborhood and 28,000 square feet in the Buckhead section of Atlanta. 

Brokers argue that experiential retail isn’t new in the Big Apple. 

CBRE’s Lon Rubackin pointed out that Madame Tussauds opened in Times Square in 2000, and now charges $39 a ticket. He also worked on leases at The New York Times Building at 620 Eighth Avenue for an ocean-themed National Geographic exhibit and for Gulliver’s Gate, a 50,000-square-foot miniature replica of cities around the world. Gulliver’s Gate filed for bankruptcy in 2019 and moved to Empire Outlets in Staten Island, and National Geographic shuttered during the pandemic. 

“There’s a lot of experiential people. A lot of them don’t have their financing yet or they’re looking for sites before they have their financing,” Rubackin said. “The problem for many of them is the size requirements. A lot of them are looking for big space. They might have very high requirements for ceiling heights and column spacing because of the way the exhibits are designed. There aren’t a lot of spaces like this. So for the spaces there are, there’s a lot of competition.” 

And some experiential retail operators try to capitalize on their unique spaces. Hall des Lumiéres, which opened last fall at 49 Chambers Street, occupies the landmarked main floor of the former Emigrant Industrial Savings Bank, a stone Beaux Arts building near City Hall. More than 130 video projectors cast images on the ceilings, the floors and the walls of the colonnaded rooms, turning famous pieces of art or photography into three-dimensional spaces. The 30,000-square-foot space, which includes upper balconies and a basement with the old bank vault, currently hosts shows focused on the paintings of Gustav Klimt and a space exploration-themed exhibit called Destination Cosmos. 

Tim Ceci, managing partner of Hall des Lumiéres, claimed that it was the largest permanent immersive art space in Manhattan. 

“It provides an opportunity for someone who may not be able to get to the third floor of the Met [to see art],” he said. The exhibits take less than an hour to navigate, cost $34 for an adult, and offer areas for guests to sit on the floor and relax. French nonprofit Culturespaces operates the Chambers Street outpost, which is its ninth location worldwide. 

“Art isn’t meant to be a circus, it’s meant to be done with great care,” Ceci noted. “We’re looking to expand how we define art.” 

Ceci says the Hall could remain relevant by refreshing its exhibits periodically, and by trying to make fine art feel more immediate for both visitors and the local community. 

“We’re making sure we’re fluid, and we’re integrating history and classicism with a bit of now,” said Ceci. “We’re building relationships and staying curious as to what people are interested in.” 

Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com