Experiential Retail: What Works Now and What Doesn’t

Area 15 in Las Vegas is a retail and entertainment complex featuring shops and food and beverage outlets in addition to attractions that take the complex far beyond traditional retail.  

Inside Area 15, which New York-based Fisher Brothers developed, Interstellar Arc bills itself as “the world’s largest VR experience.” Speaking of experiences, the John Wick Experience takes you inside the beloved Keanu Reeves film and challenges you to escape, with a full bar awaiting you once you do. Meow Wolf’s Omega Mart, meanwhile, is a psychedelic supermarket of sorts, presenting shelves filled with inconceivable products — “Who Told You This Was Butter?” home freshening spray, anyone? — carrying descriptions seemingly penned in another dimension.

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According to market research firm Metatech Insights, the global experiential retail market stood at $132 billion in 2025, but is projected to “more than quadruple” by 2035, with an expected compound annual growth rate of around 15.2 percent throughout that decade.

The reasons for the popularity of experiential retail — which Metatech describes as “a type of strategy in which physical retail locations are being crafted to provide clients with interesting, immersive and memorable shopping experiences, as opposed to exchanges of product” — are largely related to changing consumer desires among younger generations.

Metatech notes in its report that experiential retail is driven by a consumer desire for “an exhilarating shopping reality,” saying that “the current clientele, especially the millennials and Gen Z, want meaningful, emotional and interactive shopping experiences which will resonate with their ideals and ways of living.”

“Retail, by definition, started as purely transactional,” said Tyler Winograd, retail and consumer experience studio director at architecture firm Gensler. “It was about creating space where you walked in, purchased the most likely product in exchange for money, and walked out. There was nothing happening within that store to increase dwell time, increase purchases, create more brand loyalty or just provide a great experience on a human level — create memories, emotions and the desire to come back. It was just about selling product.”

With product sales now often relegated to online outlets, however, competitive retail destinations need to provide another level of experience to make an in-person visit worth consumers’ time and effort.  

“The options competing for people’s time, attention and money mean that you have to offer something more layered and more elevated than purely transaction, because you can do that online. There’s no reason to go into a store,” said Winograd. “So, all of our clients, whether you’re looking at soft goods, hard goods or hospitality, are thinking about, ‘What is the holistic experience we’re trying to design for in our space so that people will be happier, create better memories, and purchase more things so that in the long run, we can stand out in the market?’ ”

Storytime

Achieving this successfully, given the immersive nature of the category, is no easy task, and requires a fundamental shift in how developers, architects, designers and marketers think about these projects throughout every stage of development.

Developers of experiential retail need to do more than simply prepare to sell a product. They need to conceive a larger, more expansive and relatable tale to share with their customer base using the most creative and participatory means possible.

“It’s really about providing a place where storytellers can tell a story,” said Winston Fisher, a partner at Fisher Brothers and CEO of Area 15. “[Area 15] is a place where people come for celebrations, for events, for different types of activations. It’s not the old days of real estate where you would set up an anchor tenant, they would drive traffic, and people would just live off it. In our case, we’re setting up a place that’s about the consumption of entertainment and the consumption of memories.”

Fisher said that the creative end of such projects often provides the starkest challenges.

“Creativity scares people,” said Fisher, who believes that two of the most important words to consider for successful experiential developments are “curation” and “intention.”

“Everybody likes it as an enjoyable end product, but when you’re trying to be creative, most people default to the banality of mediocrity,” said Fisher. “The hardest thing to overcome is [making] people willing to be unique, authentic or different. People use those words, but when confronted with those opportunities, they usually blink.”

Fisher said the best experiential projects take a meticulous approach to details. Securing buy-in from all parties on the importance of those details can be one of the steepest challenges.

“It’s hard for people to appreciate the importance of art, lighting and mood, and how you present your space at different times of the day and why that’s important,” said Fisher. “You have to be intentional about every detail.”

When the job at hand is not initial design but experiential curation, the challenge is less about ideation than finding and attracting the right mix of properties — a tight and interlocking jigsaw puzzle of experience.

Unibail-Rodamco-Westfield (URW), operator of 66 shopping centers across 11 countries, seeks out retailers with truly unique ideas.

“With experience being central to what people look for, we’ll go through our assets and think: What will give people something they can’t experience elsewhere?” said Geoff Mason, executive vice president of development and asset management at URW. “[We look for] retailers who know how to create experiences within themselves, retailers that go over and above in terms of how beautifully the stores are designed and how expensive their product selection is. We may be slightly different than other developers, but that’s our starting point.”

Dreamscape Retail is the broker and consultant behind BKX, the new experiential outlet currently planned for the former Macy’s space at 422 Fulton Street in Downtown Brooklyn.

“We are helping to curate the project entirely,” said Joshua Strauss, Dreamscape’s president of retail and entertainment. “We plan on having traditional retail curated, but very large format, like a big wellness and fitness facility and a great market, and that’s all going to complement what is primarily an entertainment district. We’ll have immersive attractions, great places to eat, and several different types of things to do.”

After working on experiential concepts like Sony’s Wonderverse in Oakbrook, Ill., which included installations based on films like “Jumanji” and “Ghostbusters,” and similar projects for Universal and Netflix, including the latter’s Stranger Things Experience, Strauss said that experiential tenants also sought out properties that tell a cohesive story in their retail mix.  

“Netflix wanted to be a part of an ecosystem,” said Strauss. “They wanted to be in a cool entertainment district and not some crappy mall in a big box. We hear from owners who have lifestyle centers that were suffering because the retail wasn’t doing well, and they want to do something entertaining with a big buzz.”

Macerich, which owns 39 retail centers around the country, increasingly anchors its shopping centers and malls with experiential outlets such as the adult playground Level 99 at their Tysons Corner Center in Tysons, Va., or Dick’s House of Sport, which expands the sporting goods store concept to include attractions like climbing walls and simulators for sports such as golf, soccer, baseball, lacrosse and hockey. Dick’s House of Sport currently anchors Macerich’s Freehold Raceway Mall property in Freehold, N.J., and is scheduled to open at seven other Macerich locations. 

Demographics are destiny

Jamie Bourbeau, senior vice president of leasing at Macerich, said that step one for planning an experiential outlet is ensuring the outlet’s demographics match the location.

“It’s really about looking at the demographic for a particular property,” said Bourbeau. “Is there a strong young family population? Is it more of an older crowd, or more college-oriented? Because Level 99, for instance, is not a little kids experiential venue. It caters more toward a high school and older crowd all the way up to adults. But then you have other great retailers that cater more toward that younger demographic. So it’s about figuring out what is going to resonate the fastest with the demographic we have.”

Strauss said that, whatever the concept, developers of experiential properties need to ensure that outlets have the proper amount and structure of space to allow the concept to be fulfilled. That often means far more space than would typically be required for traditional retail.

“You need space that can suit these attractions,” said Strauss, who noted that experiential outlets could require between 20,000 and 100,000 square feet. “You need to build or have boxes that are vast, with higher heights and fewer columns.”

Experiential projects are more likely to have specific, potentially unusual physical requirements.

“Some concepts require significant floor loads that you might not have in a traditional retail environment,” said Scott Zinovoy, senior vice president of retail and entertainment for Dreamscape. “Or there might be a significant electrical need that you might not have for more traditional tenants, which need 200 or 400 amps on average. There are some cases where a tenant might need 2,000 amps or more.”

Zinovoy said that loading requirements must be considered as well, especially for concepts that frequently refresh their content.

“You need to provide a lane for them to do that,” said Zinovoy. “Thinking about all these things ahead of time is always good.”

(Since speaking to Commercial Observer for this article, Strauss and Zinovoy have joined JLL.)

Bourbeau noted that the more complex the outlet, the longer you’ll need for buildout.

“Sometimes it takes up to a year to prepare the property for an experiential outlet, versus maybe 90 days to build out a traditional retailer,” said Bourbeau. “Experiential outlets could take up to 12 months, sometimes even longer.”

Given all this, it’s essential early on to take a full accounting of the various basic functions an experiential space will serve. Whereas a traditional retail outlet would need functions that allow for the storage and selling of product, experiential outlets generally have more to accomplish.

“Our retail clients come to us with a diverse program,” said Gensler’s Winograd. “Products are a portion of that, but there might also be a hospitality component, maybe a tailoring component, a personal shopping VIP experience, maybe a spa element. You could have six, seven, eight different things that need to happen within this box.”

Strauss also mentioned that experiential retail outlets often have higher standards when it comes to first impressions. 

“Experiential retail is about having a great front door and signage,” said Strauss. “Bigger brands like Netflix, Universal or Lego want to have extraordinary signage. They want to create a very elaborate front door. They’re not as attracted to traditional space where you might have to put signage behind the glass or are dealing with zoning restrictions. They really want to create something special at their front door that speaks to what’s inside.”

Then, when planning what consumers will find inside the outlet, it’s important to determine how all of the desired elements fit together, and what exact purposes they will serve. 

“When we’re designing and planning with our clients, we’re starting out with a very high-level strategic effort as we workshop the various elements,” said Winograd. “There are so many different permutations of how the various elements might be able to fit within one space. So we’re designing spaces that have essentially six, seven or eight different spaces within them, and almost different typologies.”

For Winograd, this is an intellectually rewarding aspect of every experiential project.

“The really fun challenge we have is how do you design something that feels cohesive, interesting, beautiful and functional, and that has these traditionally disparate things happening from, let’s say, a coffee bar in the front and a private facial treatment in the back and a shoe rack on the right,” said Winograd. “You would have never seen those things together before, and those experiences to me all sort of aggregate into what is now being considered experiential retail.”

Winograd mentions a project he recently worked on for Tai Ping and Edward Fields, a high-end carpet company (Tai Ping owns Edward Fields) that has served the likes of Buckingham Palace, Grauman’s Chinese Theatre in Los Angeles, Paris Hilton’s private Gulfstream jet and the White House.

Seeking to reimagine the experience of the traditional carpet showroom in a way that reflected the quality of their client’s products, Gensler conceived of an experience more reminiscent of the lobby at a five-star hotel.

“When you walk in, there’s this amazing reception with glass block and custom tapestry, and all of this custom millwork and paneling,” said Winograd. “Then you walk into the space and there’s a fully functional bar where they have whiskey and tea service, and sofas and different table settings with this amazing centerpiece that’s custom millwork. There’s a carpet display unit with sconces and light fixtures, and everything feels so considered. And it was all through the lens of: How do we create an experience for their customers that is completely different from anybody else in the market, that feels like one-to-one bespoke hospitality, and that obviously creates memories and creates an experience people want to keep coming back to?”

Planning for experiential retail, then, can often be a blend of traditional retail with a hospitality mindset.

“In our world, retail and hospitality are often separated in terms of a design discipline, but the way those spaces are experienced by customers, they’re intrinsically linked,” said Winograd.

And, just as design considerations expand for experiential retail, there might also be unique considerations for financing. 

Strauss noted that some experiential projects can be more challenging to finance than traditional retail spaces due to the smaller likelihood of major national brands behind them.

“Retail projects are traditionally a lot easier to finance than entertainment projects because there are maybe 30 or 40 location-based entertainment concepts throughout the world that are financeable tenants where you can build a project on their back,” said Strauss. “Unlike [traditional] retail, where you can find lots of national and international brands that could bring credit to a project, there are fewer of these on the experiential side.”

Strauss mentioned that growing experiential brands like Meow Wolf or Japan’s teamLab are only five or 10 years old, making them less financeable commodities despite their current successes.

“These aren’t heritage brands from Fortune 200 companies that are listed on the stock exchange,” said Strauss. “They have great balance sheets, but they’re not necessarily financeable credit for projects.”

One challenge for experiential curators like Dreamscape, therefore, is trying to balance those tenants with national brands, like a Netflix or Universal, that are more easily financeable. (Zinovoy also mentioned that experiential leases are more likely than traditional retail leases to have a percentage rent component.) 

Experiential outlets can also require larger levels of insurance, given the possibility of customer injury at some of the more participatory outlets. 

“The retailers have to have certain levels of insurance,” said Bourbeau. “We have to make sure that we keep our customers safe and that we’re protected.”

Once an outlet is up and running, experiential retail that works involves a level of ongoing programming beyond what traditional retail requires — more like an entertainment venue than a fashion outlet.

“Events and programming are a really big part of it, because relevancy is so important in the experiential entertainment world,” said Fisher. “Just like the way a retail tenant has to have new fashion over time, experiential and entertainment tenants have to change [programming] over time.”

Hospitable environment 

Experiential retail at its best is almost a misnomer, because, as Winograd mentioned, true experiential retail is often a blend of retail and hospitality, meaning that whatever is needed in developing projects in either sector all needs to be handled together for an experiential project. 

“You can’t have a great retail experience if there isn’t some level of hospitality,” said Winograd. “Those two design practices, and therefore industries and space types, have to take cues from each other constantly. It’s why when you walk into a lot of retail stores now, they feel kind of like restaurants, and when you walk into restaurants, they feel kind of like retail, because they’re selling something in addition to the food.”

The sector blend, the growing success of experiential retail and the broad definition of what can fall under that label all bring up fundamental questions about the nature of commercial real estate in general, as retail, entertainment and even office and multifamily are more frequently being combined into singular projects.  

Fisher believes that the experience and impact of experiential retail has grown so vast that the lessons learned from it should be applied across the commercial real estate landscape, as younger generations seek rewarding and memorable experiences.  

“All real estate today has had that evolution where you have to build things that drive emotional connection, have an identity for different communities, and are more dynamic, more diverse, and have multiple touch points,” said Fisher. “Great office parks aren’t just buildings. Hudson Yards is more than just a place to do work. It’s modern technology, it’s event centers, it’s conference centers. That’s no different than what we did with retail. There are layers that go into the curation of it.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.