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The Tchotchke Index Tracks Location-Based Entertainment Spending

American’s spending on tchotchkes—trinkets, junk, yard sale finds, gift shop items, home decor trinkets and other decorative items for the home—is an excellent measure of their impulse spending, the fluff available in household budgets. It’s a good gauge of American’s economic wellbeing, rising when Americans are feeling economically flush and falling when they are feeling financially pinched. Back in 2007 the American Consumers Newsletter started to name tracking that spending the Tchotchke Index.

We dug into consumer spending data to show you what has been happening to the index since it’s 2000 peak of average household tchotchke spending of $240 (in 2013 dollars). It fell to a low of $158 in 2004 following the 2001 recession, 9/11 and the dotcom bubble, recovered to $226 during the housing boom and has been on the decline ever since to the low in 2013 of $103, 57% below its peak.

tchotchke index

It is no coincidence that we have seen a similar long-term decline in location-based entertainment spending starting in the early 2000s, rising in the mid-2000s and then declining since – a pattern comparable to the Tchotchke Index. Many Americans continue to cut back their spending on not only tchotchkes, but other discretionary items including location-based entertainment.

Posted in Consumer expenditures, Entertainment, Location based entertainment, Recession, Uncategorized | Tagged , , , , , , | Comments Off

The intersection of personal digital technology & bricks-and-mortar entertainment

In this blog and in our company’s Leisure eNewsletter, I write extensively about our company’s research and analysis of the fast evolving and rapidly changing intersection of personal digital technology & bricks-and-mortar entertainment. The Triple Revolution of the Internet, social media and the always-on-connectivity of now ubiquitous mobile devices is disrupting the entertainment venue industry in ways and at a speed that most in industry fail to recognize, let alone take action to stay competitive.

Below is a graph that illustrates the change in spending over the past decade. The average American household has increased their total spending on all types of entertainment, including admissions and fees at bricks-and-mortar entertainment, cultural and sports venues and on all forms of digital entertainment including social media (88% of social media users consider it entertainment), by one-quarter (24%, inflation-adjusted) over the past ten years, increasing from 3.5% of all their spending to 4.4%.

Average household entertainment expenditures 2004 & 2013

But here’s what we see as the real mega-trend that should have entertainment and other venues alarmed. Average household spending on both video game hardware and software and on cellular phones and services (think predominately smartphones and apps) has almost doubled (+96% for both), whereas admission and fee spending at entertainment, cultural and sports venues has decreased by one-quarter (-24%), from 16% of all entertainment expenditures to 10%. And when we look at the data year-by-year, it is apparent that the trend started many years before the Great Recession, indicating that it is a long-term trend.

This digital disruption of where entertainment dollars are being spent is something everyone in the business of attracting customers to any type of leisure destination needs to recognize. In order to assure their future they will need to take action to transform their venue to become competitive with the fast growing siren call of at-home and mobile digital entertainment.

Posted in Consumer expenditures, digital, Disruption, Entertainment, Location based entertainment, Social media, Trends, video games | Tagged , , , , , , , , , , , , , | Comments Off

Open Kitchens in Restaurants Increase Guest & Employee Satisfaction

Recent research findings reported in a September 2014 Harvard Business School Working Paper show the value of open kitchens in foodservice facilities and restaurants (Open kitchens are also referred to as exhibition or display kitchens).

The most surprising research finding was that customer satisfaction with the food increased 10% when the cooks could see the customers, but the customers couldn’t see the cooks. However, when the customers could see the cooks, but the cooks couldn’t see the customers, there was no increase compared to when neither could see each other. Most striking was that when customers and cooks could see one another, satisfaction went up 17% and service was 13% faster. Transparency between customers and providers improves service.

In another study led by Ryan W. Buell, one of the researchers, customers who preordered a sandwich and could watch it being made, such as at a Subway Sandwich shop, rated the service higher than customers who couldn’t see the sandwich being made, although the sandwiches were identical.

Buell, in a interview in Harvard Business Review, commented, “We’ve learned that seeing the customer can make employees feel more appreciated, more satisfied with their jobs, and more willing to exert effort. It’s important to note that it wasn’t just the perception of quality that improved—the food objectively got better. . . This work highlights the humanity of interactions, or service. There’s something refreshingly human about the idea that just seeing each other [in a work environment] can make us more appreciative and lead to objectively better outcomes.”

The bottom line is that you shouldn’t hide the kitchen, both from an overall employee and customer satisfaction standpoint, but also in terms of the speed of service and quality of the food.

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One-of-a-Kind Survey on National FEC Attraction Preferences

Last month our company completed a national survey of over 4,000 adults on their participation in major attractions at family entertainment centers. According to the results, bowling continues to be the most popular attraction for community-based entertainment venues, with over 60 million adults having bowled at least once during the past twelve months.

As far as we know, this is the first national participation survey that has been conducted about the family entertainment center industry in the last decade.

Our survey found that bowling 18- to 24-year-olds showed the highest participation rate. Over three-quarters of participants were occasionally bowlers, having bowled four or less times during the previous past year.

These results are clearly attributable to the fast changing nature of bowling. At one time, league bowlers dominated bowling. Today, the primary customer base is the casual social bowler. Their numbers are growing as old run down alleys are either closing or being renovated and/or replaced by new upscale hybrid entertainment centers with multiple attractions.”

One of the survey’s surprise results was that miniature golf came in second as the attraction adults participated in at least once during the past year. We believe that the majority of miniature golf play takes place on vacations rather than at local FECs near people’s homes. Billiards came in third as the most popular attraction, followed by go-karts and laser tag.

For all the attractions, there was a strong positive correlation between income and participation, with affluent adults in households generally earning $100,000+ annually having the highest participation rates.

Bowling is popular just not in the U.S., but throughout the world, especially due to its group social dynamic. Our company currently has bowling projects under design in the greater Seattle area and in Amman, Jordan and one nearing completion of construction in Da Nang, Vietnam.

 

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Evidence of Continuing Long-Term Decline in Marriages & Births

In our company’s May 2014 Leisure eNewsletter, we reported on the declining birth rate in America. Then in last month’s September issue, we reported on the increasing proportion of the population that is single. Now along comes research published three days ago from the Princeton University’s Woodrow Wilson School of Public and International Affairs that finds that these two trends will continue long into the future.

The research analyzed 140 million birth records between 1975 and 2010, a time period that covers five different recessions. It found that women who are in their early 20s during a recession will have fewer children in both the short and long term, driven largely by the number of women who will remain childless at age 40.

In terms of the recent Great Recession, the research estimates that an additional 151,000 women will remain childless at age 40, leading to a long-term loss of 426,800 births, a 2.4% decrease.

The research suggests that the cause will be that men who entered the work force during the Great Recession are likely to have persistently lower earnings as they age, and thus be less attractive mates for women, this resulting in more single women who remain childless.

This was confirmed by recent PEW Research findings that we reported in the September issue. PEW’s research found that the number one and most important quality that three-quarters (78%) of never-married women say they want in a partner is a husband with a secure job.

PEW also projected, “When today’s young adults reach their mid-40s to mid-50s, a record high share (roughly 25%) is likely to have never been married.”

Rebecca Traister, senior editor at The New Republic and author of an upcoming book on single women, says that until recently, getting married marked the beginning of a woman’s adult life. She says that has now changed. “We have now shifted our vision of what a woman’s life path usually entails, and it now entails some period of economic, social and sexual independence.” She also points out that the shift in marriage patterns can possibly be seen as a destabilizing force in society (especially politically).

What this all means for location-based entertainment venues (LBEs), including family entertainment centers, is that there is a long-term trend under way of less births and more singles, including unmarried childless, economically independent women. LBEs will need to adjust to these changing demographics with their mix, design and operations. And when it comes to singles, that segment will include a growing proportion of single women in their late 30s, 40s and 50s, a market with different wants, needs and values than the younger adult market many LBEs now target.

Singles by age 2013To listen to or read an interview with Rebecca Traister on NPR Radio, click here.

Posted in children's entertainment, Demographics, Millennials, Recession, Singles, Target markets, Trends | Tagged , , , , , , , | Comments Off

The migration of the meaning of Place

It wasn’t all that many years ago that a place was only a physical geographic location where you traveled to do something. Work was a place you went to each day. You went out to socialize at places like bars and coffee shops. You went out for entertainment at places like cinemas, family entertainment centers, bowling centers, concerts, etc.

Now the physicality of place is no longer its sole meaning. The definition of place has changed due to the Internet and mobile devices, especially the smartphone. Now, no matter where you are located physically, you can go to work, socialize or be entertained without taking a single step to move to some other physical place. Work is no longer a place, but what we do anywhere. Socialization can take place with anyone located anywhere in the world at any time. We can be entertained 24/7 no matter where we are. That includes watching a movie or video, playing a game (including playing with someone else located anywhere in the world) or listening to a live concert. The smartphone and other mobile device screens have become the second place where we can work, play and socialize.

A large portion of activities that used to require a physical place have moved to the virtual world and taken much of our attention with it.

Today, depending on what survey you examine, over 2/3ds of Americans own a smartphone (comScore reports it was 68.8% for age 13+ as of March 2014).

Smartphone penetration by ageIn reality, we shouldn’t be calling them smartphones, as the phone function (talking and texting) only consumes 12% of the time it’s used. According to Flurry, during the 1st quarter of 2014, Americans spend an average of 162 minutes a day (2 hours, 42 minutes) on their mobile devices, of which 2/3rds (1 hour, 49 minutes) is spent gaming, on social media or for entertainment, all of which replace the need to go to some physical place.

2014 time spent on smartphones:mobileSo if you’re in the business of developing, owning or managing a location-based entertainment or leisure venue and you think that your only competition is other physical venues, think twice. There’s a new place people are going to, the highly convenient, inexpensive or free, seductive mobile screen, and it is taking away market share. Welcome to the Age of Disruption.

Posted in Culture, digital, Disruption, Entertainment, Location based entertainment, Out-of-home, Trends | Tagged , , , , , , , , , | Comments Off

Is the Terminator prophecy coming true?

In order to future-proof our client’s projects, our company continually performs extensive research to understand the impact that constant connectivity and digital entertainment, as well as other cultural changes are having on the location-based entertainment industry. Along the lines of what we are finding in our research, I found a very interesting comment by James Cameron, director of The Titanic and Avatar movies in an interview by Jose Rottenberg in the current issue of Fast Company magazine:

Rottenberg: In The Terminator, you envisioned a future in which machines would become self-aware and take over humankind. Thirty years later, how do you think that prophecy holds up?

Cameron: It’s happening. When people are arguing over whether drone aircraft should be able to autonomously take out a human target, you’re into Terminator territory. Sit in any airport lounge and look around at the number of people hunched over, looking at a device. The machines have already won—only in a way that the Terminator films didn’t imagine.

And I’d add, just think about it, we now talk to our devices asking them for information and advice and take directions from them. Oh, how the age of the machine is upon us in such a short time.

Terminator-3-Rise-Of-The-Machines

Posted in digital, Disruption, movies, Trends | Comments Off

Millennials aren’t necessarily who you think they are

The press continually implies that Millennials are a homogeneous group of approximately 19- to 34-year-olds. Nothing could be further from the truth. No, not all Millennials are singles living in their parent’s basements. No, they aren’t all foodies. No, they aren’t all singles and childless couples who go out and party a lot.

Defining consumers by age is a big mistake. It is much more meaningful to define them by multiple dimensions, including their life stage. A college student behaves a lot different than a early-thirty-something single with a job. A childless late-twenty-something couple behaves a lot different than a late-twenty-something couple with children. A single childless woman behaves a lot differently than a single mother with a child. In fact, having children significantly changes spending priorities, including entertainment.

When we look at the Millennial generation based on those with children, approximately half have a child. Depending on the parents’ ages, earnings and couple status, even that can be a very diverse group.

Mothers with children 2012

Don’t plan your location-based center or marketing based on some broad population demographic such as Millennials. To be successful, you need to be a lot more targeted than that.

 

Posted in Consumer expenditures, Demographics, Entertainment, Location based entertainment, Millennials | Comments Off

Travel spending on entertainment & dining takes a staycation nosedive

The U.S. Commerce Department has reported that spending on travel and tourism during the 1st quarter of 2014 decreased at an annual rate of 1.0%. However, spending on recreation and entertainment turned down dramatically, decreasing 11.2%, and spending on food services and drinking places decreased 3.5%. All other travel related spending categories actually turned up during the quarter.

This all took place during a time of rising consumer confidence in the economy.

It’s hard to find an explanation for the the steep decline in spending on recreation and entertainment, as people were still traveling, in fact more so, based on all the other travel spending categories with the exception of dining and drinking.

Could it be that entertainment and recreation is taking a declining priority on how people spend their discretionary incomes when traveling. Our company’s research has found a definite long-term staycation trend when it comes to entertainment spending on trips. This could well just be a continuation of that trend.

entertainment spending trips staycation

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Playing Video Games Now a College Varsity Sport

I wrote a previous post about eSports. Now it is being recognized as a legitimate sport by Robert Morris University in Illinois. The university is offering hefty scholarships for players of one video game in particular, League of Legends, which is the most popular game for organized video game team competitions, known as eSports. The school will offer the scholarships as part of their new varsity eSports program.

The school says it wants to give credit to those with a competitive spirit who don’t necessarily want to play traditional sports such as basketball or football. Associate Athletic Director Kurt Melcher, who will be in charge of the school’s varsity eSports program, said League of Legends is a competitive game that demands team strategy and mental prowess, so offering scholarships will attract the same types of committed students who are drawn by scholarships for traditional physical sports.

Robert Morris’ team will compete in the already well-establish Collegiate Star League, a collection of 103 institutions including schools from Harvard to ASU who compete against each other in eSports matches. But the RMU team is the only one considered “Varsity,” and an official part of the school’s sports program. There are currently 27 million daily and 67 million monthly League of Legend players. In 2013, the video game produced $624 million in revenues.

The US government now recognizes League of Legend players as professional athletes who can be awarded work visas to come to the US to play.

So now not only is digital eSports a popular spectator sport – a League of Legends championship sold out the Staples Center in LA last October and was watched online by 32 million – but digital has crossed over into popular college sports to compete with the physical, including popular college basketball and football.

This is just one more example of how the digital world is disrupting traditional entertainment, and now sports. Not only is pure digital displacing the physical and real world versions, but we are also seeing a convergence of digital and real world experiences creating new forms of competition.

Posted in digital, Disruption, eatertainment, eSports, Experience, sports, Trends, video games | Tagged , , , , , , , , , , , , , | Comments Off