Virtual reality is set to fund the next wave of success, Peter Schaverien says
Franchises have been making the most out of a revival in out-of-town retail and leisure parks over recent years, as the locations offer an attractive alternative to the high street. But what is the next big trend in this sector?
We have seen a significant shift in the occupants of retail and leisure parks over previous years and the signs suggest that the changes have had a positive impact on the performance of the out-of-town locations.
While the high street has attracted headlines for high profile CVAs and closures, sparking sensationalist headlines about the death of retail, retail parks have displayed impressive resilience as franchises fill vacant spaces left by reduced demand in the fashion and food and drink sectors.
Brand such as easyGym, Orangetheory Fitness, Anytime Fitness, Snap Fitness and F45 Training are highly attractive propositions for landlords searching for a solution to fill large retail spaces, while the likes of Starbucks and Costa Coffee, as well as KFC and Burger King, are drawing customers with more regularity than their big ticket or homewares predecessors.
While the expansion of major casual dining brands such as Wagamama and Nando’s has slowed, franchises such as German Doner Kebab, Taco Bell and Papa John’s are seizing the opportunity to fill the void.
Free or cheap parking in locations that are highly accessible is a major draw for shoppers, along with leisure attractions such as soft plays, trampoline parks and bowling alleys. As consumers increasingly look for experience-based activities, these leisure outlets are also strong options for potential franchise owners.
Next major trend
High on this list of activities is virtual reality. As this market continues to grow, I expect VR to become the next major trend that franchisees explore.
PwC predicts that the UK’s VR market will be worth more than £1.2 billion by 2022, making it the fastest growing segment of the UK’s entertainment and media sector, and out-of-town units offer a great location for franchises in this space.
A number of retailers are adapting VR and augmented reality to improve customer experience in-store, but brands such as Vertigo VR, ImmotionVR, VR Pit and Zero Latency are among the VR companies that are demonstrating impressive growth with gaming outlets.
The free-roam, multiplayer VR games offer customers an immersive gaming experience, where they use their bodies as the controller via wearable technology.
ImmotionVR has eight locations in the UK, including in The 02 Arena in London, Vue in Birmingham and Xscape in Castleford. We believe this type of outlet can thrive in the large spaces available on out-of-town parks.
Strong opportunities for franchises
There’s no doubt that out-of-town parks present strong opportunities for franchises and there are reasons traditional retailers have been taking advantage of retail and leisure parks for so long: rents are increasingly competitive, there is often space to be filled and franchises are among the retail businesses offering the strongest growth.
For shopping and leisure parks to succeed, they need a mix of big ticket retailers, fashion brands, casual dining and drive-thru or takeaway outlets to attract regular and consistent footfall throughout the week.
Add in leisure outlets offering VR experiences and franchises can benefit from the revival of out-of-town parks.
Peter Schaverien is head of the out-of-town retail and leisure division at retail property consultancy Harper Dennis Hobbs.