While several retailers and consumer brands are staking outposts in the metaverse, experience-based retail is driving the ambitions of a six-year-old Winnipeg company that hopes to open up to a dozen locations across Canada next year.
Activate Games Inc. opened its first, 15,000-square-foot gaming facility in the Westwood neighbourhood of Winnipeg in January 2019. It claims to be “the world’s first active gaming facility,” where a minimum of three players come together to play arcade-style games by actually jumping, climbing, and dodging through a series of 11 rooms in short, three-minute challenges that test the players’ agility and mental skills.
Its sixth location in Canada opens at Canyon Meadows Centre in Calgary this week. It also has three locations in the U.S. with three more under development. Discussions are at advanced stages with two “large companies” that set the stage for international franchise locations in the new year.
“We’ll probably have in the range of six to eight new international locations that will be built in 2023,” said Adam Schmidt, president of Activate.
Activate also plans eight to 12 new locations in Canada, including Metro Vancouver.
The company recently secured an additional 23,000 square feet in Winnipeg for a production and manufacturing facility that will produce components for the new locations.
A return to retail by shoppers is underpinning the expansion. According to JLL Canada, close to 90 per cent of Canadians planned to visit shopping malls this month. While that’s partly driven by holiday shopping, it’s up 5 percentage points from last year and more consumers are staying longer. Approximately 23 per cent say they’ll spend more than 90 minutes at a mall, up from 17 per cent a year ago. The percentage of those who will stay to eat is on par with last year at about half.
Madeleine Byblow, a senior associate specializing in retail with JLL Canada, says consumers want convenience. While they’re not quite ready to linger – 77 per cent still spend less than 90 minutes in the mall – visits with Santa came back in a big way this year as a new normal emerges from the pandemic.
“That’s obviously a reason to get families into the mall and have them stay,” Byblow said of photos with Santa. “Mall owners are always trying to find ways to have more activations and more things for people to do at the centres.”
This is also where Activate is playing a role, especially as landlords seek to fill vacancies created by pandemic closures. A destination that people have to plan to visit, Activate can count on welcoming approximately 2,000 people each weekend.
“Whether we’re in a smaller, less desireable location, or we’re going into desireable places that are seeing a drop in retail, we’ve been approached by a lot of landlords to have that experiential retail mixed in with their other retail,” Schmidt said. “To go into those desireable places like a mall is really good for the mall.”
The company’s success shows how engaging retail experiences are reinventing the retail sector.
While the closure or withdrawal of major brand-name retailers like Sears and Target led to large, high-profile vacancies, brands that deliver engaging experiences are thriving. In an omnichannel environment, this can be through digital platforms or in person, as in the case of Activate.
“Oftentimes in press we’ll hear about the retail apocalypse, retail’s dying, shopping malls are dead,” said Dan Chubey, managing director with Colliers International in Winnipeg. “Retail’s not dying, it’s just evolving.”
Winnipeg, for example, has seen retail vacancies decline from more than 8 per cent in 2017 to 3.2 per cent today thanks to the reinvention of some space as well as the lack of any new additions of space.
This has helped support lease rates, which should ultimately stimulate interest in new development.
Activate is a good example of how retail space is reinventing itself, finding ways to attract people for more than just browsing, purchasing or order pick-up.
“There’s different concepts like this that are filling up a lot of those big locations for a lot of other industries that have suffered,” Chubey said.