The pandemic has sparked and accelerated several trends affecting businesses in retail, hospitality, entertainment and more. However, what has become abundantly clear throughout the last year is that we are social creatures and there is an overwhelming desire to be out in the world again with our family, friends and colleagues. While we are digital by default, we are not by design and this pent-up demand for in-person connection will drive the next generation of the experience economy.
While the growth of the experience economy has absolutely taken a hit as a result of the pandemic, there is a serious and persistent appetite from consumers and investors alike for a more creative and interactive retail experience across a wide range of sectors including hospitality, entertainment and retail.
Many are speculating what the post-pandemic economy and recovery will look like – including an anticipated resurgence of activity that has been dubbed the “new roaring twenties“.
Right now, there is a once-in-a generation opportunity for hospitality, leisure, sports, wellness and other out-of-home entertainment businesses to reinvent their offerings and build strong brands, quality experiences and deep connection with customers. And I am confident that the next five years will showcase the extension, expansion and evolution of out-of-home experiences, reinventing the modes of engagement, seamlessly merging digital and physical layers and broadening these businesses across the globe. It will be the rebirth of retail as we know it.
I have had the opportunity to develop and drive these types of experiences in my own professional portfolio. In my 18-year career at Disney, I led innovation in new businesses like Adventures by Disney and ESPNZone restaurants and expended the global reach through both Hong Kong and Shanghai Disneyland developments. As President of Kelly Slater Wave Co I established a unique take on hospitality combining the showcase of the perfect wave with world-class food, beverage and guest experience. Now, as Global Head of Private Equity at Cain International, I am seeing a renewed sense of excitement and innovation in experiential retail.
Importantly, this shift is something Cain has been preparing for across its portfolio. For example, its recent acquisition of Prezzo; AllBright acquiring digital platforms Grace Tales and EvolveHer; the St. James acquiring tech platform WAAM and engaging with the local community throughout the pandemic; and most recently the announced second $20M investment into Swingers, a “crazy”-golf concept that will be expanding to the U.S., first in DC then in NYC; this retail renaissance is already deeply ingrained in our portfolio.
We are excited to partner with, support and drive growth for businesses across this set of spaces with a key recognition that this is a pivotal moment for customer relations. Loyalty is up for grabs and businesses will need to be bold, have a strong brand identity, and unique offering to connect and engage consumers to reclaim their following from virtual spaces. The good news is that customers are desperate to bring dynamic, social experiences back into their lives. The challenge is that new virtual ways of working have become habit – both for good and by necessity. The return to “normal” will take time and focus but the opportunity is there.
To do this and move forward, businesses need to recognize the delicate balance between in-person experiences and virtual engagement. There is a strong narrative about how online retail has killed the bricks-and-mortar shopping experience, which is true to an extent, but that does not mean we are at an endpoint. We do not need to pit bricks-and-mortar and online offerings against one another. In reality, consumers want a range of offerings and the most successful brands will provide seamless engagement, allowing customers to determine where, when and how they want to interact. In this context, how we use physical space works in conjunction with digital and will be more important than ever.
AllBright is an excellent example, it began as a women’s only members club in London, UK and has since expanded its core offering by investing in the development of a digital platform that is affordable, accessible and complementary to the club’s physical locations and will further enable the business to broaden its global reach.
We’ve also seen this at the St. James, with the acquisition of the WAAM platform to strategically revamp its e-commerce approach. The property has combined digital and in-person training sessions to provide flexible service to patrons that fits their schedule and preference.
As we all benefit from vaccines and treatments that help bring the world out of the pandemic, the opportunity is before us. The key at Cain and across the businesses we partner with, is providing the combination of capital, strategic direction and operating expertise to help business get back on the quality growth track. Focusing on how we can create new experiences, on how we can leverage technology in physical locations and on the connected nature of brands will be key drivers in reinvigorating businesses, local-communities and the wider economy.
By Jonathan Goldstein
Chief Executive Officer
By Jonathan Goldstein
Chief Executive Officer
By Nick Franklin
Senior Managing Director
Global Head of Private Equity