Let's face it. People don't go to the local mall just to walk around with friends, buy a pretzel and maybe see a movie, like they used to.
Mall owners realize they need to bring in a new wave of entertainment venues to keep luring people in. So now escape rooms, places where you can pay to throw an axe at a wall and virtual reality experiences that make you feel like you're on the set of a "Star Wars" movie are popping up at malls across the country.
Unibail-Rodamco-Westfield, which owns 32 properties in the U.S. including the Westfield World Trade Center in New York and Westfield Century City in Los Angeles, announced Thursday a deal with Utah-based virtual reality experience The Void. It said the two plan to work together to bring more than 25 VR spaces to URW's malls in the U.S. and Europe.
The Void pop-ups are first set to open at four URW properties in New York, San Francisco, Los Angeles and San Diego as early as next month. Permanent locations will be rolled out in the U.S. and then Paris, London and Stockholm in the coming months, with all locations expected to be completed by 2022. URW is the biggest commercial landlord in Europe.
The deal represents yet another way America's malls are adapting as a record wave of store closures has forced the make-up of a traditional shopping center to change.
"Entertainment is a really strong component of the destination malls," said Jean-Marie Tritant, URW's U.S. president.
About five years ago, the proportion of leases URW was signing devoted to fashion-based stores was more than 50% of deals, he said. Today it's shrunk to about 35%. Entertainment options are moving in, instead.
Overall, the square footage in U.S. malls devoted to apparel has dropped roughly 15% since 2010, according to an analysis by CoStar Group. Entertainment uses, however, have scaled about 13% since then. And so-called nontraditional uses, which are defined by CoStar to include coworking spaces, schools, private offices and event space, take up nearly 20% more square feet in malls today, the firm found.
Source: CoStar Group
"People hear 'VR' and they think it's a gimmick, it's a fad, it's not for me," said Curtis Hickman, co-founder and chief creative officer at The Void. "But anybody can do this. We make it easy for everybody. This is the future of entertainment."
The Void offers an experience where customers pay $35 to physically feel like they're in a certain movie, live in action. So with "Star Wars," for example, you put on goggles and a vest and walk into a room where a Darth Vader battle scene is playing out. The temperature of the room heats up as lava surrounds you. The wind blows when you have to jump across a bridge. You pick up a blaster to battle Darth to the end.
The Void currently has 11 locations up and running globally, including in Malaysia and Dubai, Hickman said. It plans to open three others, outside of the deal with URW, later this year — at Triple Five Group's Mall of America in Minnesota, Macerich's Tysons Corner Center in Virginia and at The Battery Atlanta in Georgia.
"We get people going to the mall ... to buy some jeans, and then they find themselves in the middle of 'Star Wars,'" Hickman said. "But a lot of people go to The Void as a destination. It's how you're spending your weekend or date night."
Mall owners and retailers alike could benefit from any boost in traffic that The Void is able to bring, especially if people stick around to shop and eat.
URW expects it will attract first-time visitors with The Void locations, which it proved out with a pop-up at Westfield London roughly 18 months ago, according to Tritant. Over the span of about two months, more than 70% of the people who came to The Void pop-up at Westfield London had never been to that mall before, he said.
"People want to be entertained," said Greg Maloney, CEO of commercial real estate services firm Jones Lang LaSalle's retail division, adding that a lot of the leasing activity happening at malls today is around "experiences and entertainment."
Later this summer, "Star Wars: Secrets of the Empire" and "Ralph Breaks VR" will be the first immersive experiences to debut at The Void locations at the Westfield World Trade Center in New York, Westfield San Francisco Centre, Westfield Santa Anita in the Los Angeles and Westfield UTC in San Diego, the companies said.
The Void has entertainment deals with studios including Disney and Sony to be able to use their content to create the simulations. For "Star Wars: Secrets of the Empire" and "Ralph Breaks VR," it's also working with Lucasfilm and Lucasfilm's Immersive Entertainment division, ILMxLAB.
The Void also has received a $20 million investment from James Murdoch, son of media mogul Rupert Murdoch, and he now sits on the virtual reality company's board, according to a Bloomberg article. Former Lululemon CEO Laurent Potdevin has also reportedly been serving as a senior advisor to The Void for roughly a year. The Void declined to comment on the Bloomberg story.