by Randy White, CEO, White Hutchinson Leisure & Learning Group
Society and leisure are undergoing a transformation based on the continuing evolution of the Triple Revolution (the Internet, social media and the mobile screen), demographic changes, generational shifts, changed economic conditions and changing values. These trends have all come together to create a significant disruption to the competitive leisure landscape. To stay relevant to the new leisure order and attract people away from all their digital entertainment options and out of their homes, what are traditionally called entertainment venues such as family entertainment centers, bowling centers and other types of community entertainment venues (CEVs) will need to evolve and shift their paradigm of what a community leisure destination needs to be.
Today it's a bit of an oxymoron to call it an entertainment venue when in fact the entertainment is becoming secondary to the visit experience. But that is exactly what is proving successful in the fast evolving CEV industry, less emphasis on the entertainment. The new successful concepts aren't even calling or marketing themselves as entertainment venues.
Let's take a look at one example in the golf industry. The popularity of golf has been on a long-term decline in America, losing about one-half million players per year over the past decade. Over those ten years, golf participation has declined by 28%. With a shrinking market size, golf is not exactly an industry in which you want to open a new concept. Well, actually, yes it is if you understand what it takes to attract younger non-golfers rather than just traditional golfers.
That is exactly what TopGolf has achieved. Two-thirds (64%) of their guests are between the ages of 18 to 34, an age range that accounts for only one-fourth of golfers. How? Because the majority of their customers are not golfers. 60% of TopGolf customers consider themselves new to the game; it's not the golf that brings them. TopGolf has turned their driving ranges, miniature golf and clubhouses into must-attend party spots. CEO Ken May puts it this way, “The Millennials are there to have fun, not necessarily to get good at golf.” Playing golf is secondary to partying and hanging out with friends for TopGolf's customers. The food and beverage experience is important as it makes up more than one-half of TopGolf's revenues. Their menu wouldn't seem out of place in a New York gastropub. Drinks, music and friends make TopGolf a communal social experience rather than a golf experience.
TopGolf created three-levels of golfing bays where groups of up to six people can eat, drink, listen to music or even watch TV and maybe take a swing at a ball on the driving range. The driving range has sunken, circular targets, each divided into pie-like sections, looking a bit like a dartboard. Players can amass points as they try to complete a circuit by hitting each section.
Digital is big at TopGolf. The microchip-embedded balls keep score and track the drives' accuracy and distance and allows for a number of game formats. Since younger customers at TopGolf spend as much time on social media as hitting the ball, TopGolf has purposely designed its facilities to maximize social photo and video sharing. Many locations are purpose-designed to optimize landscapes and views.
TopGolf has 15 locations including three in the U.K. and another nine under construction. They target affluent markets with upscale younger adults earning at least $100,000 per year.
Another example of a paradigmatic shift for a venue that isn't focused on the entertainment and doesn't consider itself as an entertainment venue is the expanding Punch Bowl Social chain. PBS combines bowling, ping-pong, shuffleboard, a video arcade and private karaoke rooms with a from-scratch, chef-driven gastro diner and boutique cocktail bar. Founder Robert Thompson says this about his concept, “First and foremost, we are a restaurant. . . There's so much to do in one space, they don't have to leave. We refer to it as the sticky factor. People come in intending to just grab a drink, but they end up staying for hours.”
With units averaging revenues in the $7.0 million range (higher in some large markets), entertainment only accounts for about 10% of sales.
The name really says it all. Punch Bowl Social is a social destination where friends can gather (around the punch bowl) and share food, drink and have some fun playing different types of entertainment, or even sing themselves silly in the karaoke rooms.
Many new upscale bowling concepts are following this same formula. Rather than being designed for bowlers, a paradigm that developed in the heyday of league bowling, the new centers are offering a social and food and beverage experience for non-bowlers. Many customers can be found with groups of friends at the bowling lanes who aren't even bowling. Much of the socialization centers around the food and beverage rather than the bowling.
There are other examples of new venue formulas that include entertainment, but where the socialization and the food and beverage are the primary draw versus what is fast proving to be an out-of-date concept of people coming primarily for the entertainment and recreation.
There's a new surprise player who is disrupting the paradigm of the community entertainment venue even more drastically by totally eliminating the entertainment, Starbucks. The company has already successfully made their coffee shops the place to meet up with friends during the day. In fact, they basically invented what is known as the third place in America (the first place is home and the second place is work) and have spread the concept worldwide. Now they will be expanding that social concept into the evenings and nights in their Starbucks Evenings. Instead of lubricating socialization with non-alcoholic drinks, they are turning up the lubrication dial by creating a place where you can meet and have a cold one or a glass of wine. They are also tapping into the rapidly expanding snacking trend with their Evenings after 4pm savory small plate menu.
I recently had the chance to visit a number of the Starbucks Evenings cafes in Seattle. The décor in the evening is more warm and upscale than the typical daytime Starbucks. And the Evenings use a richer palette of colors and woods. Starbucks is also giving their new store empire a bespoke look by customizing the designs for their locales.
Here's where the disruption comes in. If you want to meet up with your colleagues and friends after work or later into the evening to relax and have some great conversation while you have a drink and perhaps a gourmet snack, these Evenings offer a much more inviting atmosphere than hanging out at a bar or committing to a meal together at a restaurant. The Evenings have a much more relaxing, mellow, comfortable atmosphere, almost a living room ambiance. They are true third place social hangouts in the evening, no different than Starbucks' success for the same during the daytime. And based on all the research our company has seen, they are definitely the type of place that Millennials will gravitate to, just as they gravitate to Starbucks during the daytime. In fact, I am much older than Millennials, and I'd much rather meet up with friends at a Starbucks Evenings store than any bar I've experienced. In a certain sense, they are much more approachable and far less intimidating then bars.
Starbucks currently has 30 Evenings locations open and have a major conversion underway for 1000s of their existing stores in the United States.
In a nutshell, Starbucks has created a very disruptive new model for an attractive evening and into the night out-of-home, social destination. They have eliminated the negatives of hanging out at bars and lounges and will have wide appeal to, not only Millennials, but also to a much wider adult audience. They will be especially appealing to women who often find bars intimidating, and unlike men, don't necessarily have to be throwing or rolling a ball or doing something interactive together in order to socialize.
These are the types of new formats that are proving successful in luring today's contemporary consumers out of their homes and away from all their screen-based entertainment options.
Yes, there is a paradigmatic shift underway for destination community leisure venues and it doesn't start with the word entertainment. It's all about let's go out, eat and drink and socialize together. You can successfully achieve that out-of-home experience with minimal or no entertainment and more and more of the competition is doing just that.