Consumer expectations are evolving at an unimaginable pace. There is a growing appetite for building unique, memorable, and shareable experiences. The pandemic has also played an instrumental role in driving the new trend. The lockdown period demonstrated the power of the digital world as exemplified by the relevance of virtual meetings and virtual learning. Through increased thrust on digitization, it made superlative experiences accessible to wider masses via social media, augmented reality, virtual reality, etc.
Marketers and enterprises now understand the growing significance of experiential economy and embracing it as a part of their overall business strategy. It is estimated that the current size of the experiential economy is around USD 5.2 trillion and is set to reach USD 12 trillion by 2028, as per World Experience Organization.
The Rise of Experiential Real Estate
As the contours of the experiential economy are expanding, real estate can’t also remain largely insulated. People now believe that real estate is not just about a place to live or work but a curation of lifestyle choices. From design to construction to brokerage, experiential technologies are growing everywhere. From static digital assets, real estate is now aggressively embracing enriched technologies such as AR, VR, IOT, AI, etc.
There is an increased emphasis on the sense of community alongside security and long term sustainability. Projects are built that bolster meaningful social interaction within the community. It encourages residents to not live in a shell but to meet and interact with each other and develop healthy bonds without compromising on their personal spaces.
Likewise sustainability and security are key themes now. Through remote accessed security systems, a sense of safety is enforced in communities.
Many homeowners are now willing to pay a premium for green buildings. Real estate contributes 30-32% of the global greenhouse emission. People are realizing the danger and hence both buyers and developers are working proactively towards sustainable real estate. Realty projects are incorporating a host of profound practices such as water recycling, renewable energy, improved ventilation & sunlight etc. to contain carbon footprint. Also thanks to newer technologies such IOT, it is very convenient to reduce wastages with the use of smart meters and switches.
Brick & Mortar Stores Pivoting to Retailtainment
There is also a visible change in the retail segment. When the pandemic blew, many believed that brick and mortar stores were dead. Though they got eclipsed for some time, the physical stores are however back, albeit in a new avatar. The role of retail stores is no more just limited to places for transactions. Rather malls, shopping arcades, and high streets are transforming to become facilitators of entertainment, meaningful social interaction, and shareable memories. This is giving rise to a new term called ‘Retailainment’ a word coined by combining retail and entertainment.
As digital natives Gen Z and millennial form a large portion of retail clients, shopping places are repackaging to support the active social media lives of their customer base. From interior decors and trial rooms, everything is designed to be more instagramable. Likewise retailers are investing more on play zones, food courts, open spaces to give a more fun-filled and comfortable experience.
FAQs
1. What is Experiential Real Estate?
Experiential Real Estate refers to properties that prioritize creating engaging and immersive experiences for tenants and visitors. This approach goes beyond traditional real estate by integrating elements such as interactive spaces, community events, and enhanced customer experiences, ultimately aiming to foster a sense of belonging and connection among users.
2. What are Brick and Mortar Stores?
Answer: Brick and Mortar Stores refer to physical retail establishments that operate in a specific location, allowing customers to visit and purchase products or services directly. These stores contrast with online retailers, as they provide a tangible shopping experience where customers can interact with products, receive personalized service, and enjoy immediate possession of their purchases. The term “brick and mortar” emphasizes the physical construction of these businesses, highlighting their presence in the local community.
3. How has the trend of Experiential Real Estate emerged?
The rise of Experiential Real Estate can be attributed to changing consumer preferences, particularly among younger generations who seek more than just a physical space. Factors such as the growing importance of lifestyle, social interaction, and unique experiences have driven developers to innovate and create environments that cater to these desires.
4. What are some examples of Experiential Real Estate?
Examples of Experiential Real Estate include mixed-use developments that combine residential, retail, and recreational spaces, as well as properties featuring amenities like communal gardens, pop-up shops, wellness centers, and event spaces. These developments often host activities and programs that encourage community engagement and interaction among residents and visitors.
5. What benefits does Experiential Real Estate offer to investors?
Investors in Experiential Real Estate can benefit from increased demand and higher occupancy rates, as properties that provide unique experiences tend to attract a diverse range of tenants and customers. Additionally, such properties often command premium rental rates and can enhance long-term value through sustained interest and engagement from the community.
6. How can developers incorporate Experiential Real Estate principles into their projects?
Developers can incorporate Experiential Real Estate principles by focusing on design elements that promote interaction, such as open spaces, flexible layouts, and multi-functional areas. Collaborating with local businesses and artists to host events or create unique installations can also enhance the experience. Furthermore, understanding the target audience’s needs and preferences is crucial in crafting spaces that resonate with them and foster a vibrant community atmosphere.
