Industry Analysis
Tracking Trends for Greater Efficiency

May 12, 2016 No Comments

By Scott C. Borowsky and Frank Seninsky

The industry is being presented with a mixed bag of factors, including the ups and downs of the stock market, and gas prices, which may or may not influence consumer behavior. For example, while lower fuel costs are putting more cash in the public’s pockets, the extra funds are no guarantee for increased spending on entertainment.

Here are other trends that merit attention: 

Paris Bombing. In case you didn’t notice it in the images, the bombing took place right by the front gate of Disneyland Paris. This is significant because Disney is a symbol of Western capitalism and this should be a wake-up call for our amusement parks, stadiums and entertainment centers, to seriously start to beef up security. This is a topic that we feel needs to be moved up the priority list, as just one single incident could hurt all of our businesses.

Retail.  The current word experiential well describes what people are looking for when they leave their homes and the brick and mortar retail industry is following this trend, perhaps for its very survival versus online shopping. One retail store we came across pre-wraps all of their items and displays only samples.    They seem to have covered all of the bases:  faster check out time, convenience of customers not having to wait to have their gifts wrapped, with the wrapping built into the pricing, no shrinkage, less damage, kids items are placed higher up so they can’t be knocked over, friendly and helpful staff. Business is booming as the customers enjoy this unique shopping experience.

Photo Booths Are In.  Photo Booths are now designed and branded to be an integral marketing tool for stores, restaurants, and any high trafficked location. And of course the photo booth earns revenues on its own to pay for the real estate it takes up (15 square feet or less). We were very impressed with the new Apple photo booth with its sleek, high-tech design. These new booths are not acceptable in locations where the old style photo booth was not welcomed.  New technology enables the locations to market their brand by having their logo and tag line embossed into the photo or their retail products shown in the background. Store promotions to encourage customers to take and send photos and images to their Facebook and other social media platforms are infinite.

AMOA State Council Meeting Ranks Marketing as Number One Focus for 2016. Game operators and vendors are focusing on marketing not only their games but the business facilities where they revenue-share games. This focus will have a huge impact on increasing both game revenues and other facility revenue categories as customers will stay longer, spend more money, and increase their frequency of visitation, which is a phrase that means repeat customers.Discounting tokens and e-credits and incorporating them into the facility’s high perceived value individual, small group and family discount packages is the first key step to driving revenues.  The second key step is to cross market other businesses through the use of gift cards, debit cards, ticket bundles and coupons, with both businesses adding high perceived value to their customers.  Game operators can learn all of these techniques, including how important hit frequency is to making players really happy, at Foundations Entertainment University (www.foundationsuniversity.com) and use their expertise to play a major role in the family entertainment center industry.

The Media Says Kids Need 60 Minutes of Activity Every Day.  This is a super opportunity for our industry to be tied into schools. We have it all!  We have bowling, trampoline parks, laser tag, climbing walls, zip lines, go-kart racing, softplay, batting cages, air hockey, dance games and jumping games, the list is endless. The BPAA, IATP, IAAPA, AMOA, AAMA and many of our other industry associations as well as the NFL, MLB and others can all work together to help this happen.

Three Consumer Trends to Watch: Restaurants, Media and Financial Services


Paying for Food-Loyalty Cards. Starbucks (SBUX) has taken the lead. Starbucks loyalty cards, My Starbucks Rewards, permits customers to earn rewards like frequent flyer miles and to pay using their mobile app. It has been reported that one in seven people in the United States received a Starbucks card as a gift during the past 12 months.  The result is amazing:  Their loyalty customers are visiting and spending three times more than their non-rewards customers.
• Online Ordering. Pizza chains are taking the lead here but other quick-service chains are already gearing up. Papa Johns’ (PZZA) and Dominos’ (DPZ) both recently reported that more than 50 percent of their orders are through mobile and web apps and that these orders have a higher spending rate per order. Drilling down into the data reveals that customer frequency or ordering has increased by 30 percent. As an aside, currently 40 percent of airfare and hotel bookings are being made online.

• Tabletop ordering.  We have both seen and used this technology and it is fantastic. Not having to wait for a wait staff to place an order or to pay is what quick service is all about. We figure we reduced our time to eat and get out by 15 minutes, and that is during non-peak hours. The time savings was even greater in those restaurants where one has to wait on line to place an order and pay and then stand around until your order is ready. The benefits to the restaurant include:  increase in table turn throughput; servers can handle more tables and get more tips; reduction in number of servers means reduced labor costs; customers are spending up to 25 percent more and finally, us older folks are quick learners in this area of new technology as it translates to getting beer and wine orders much faster.

• Americans now spend more than 50 percent of their media time in front of a computer, i-pad or mobile phone. People want to watch their favorite programs when they want to, and with no commercials. Netflix reports that their customers are using their streaming technology approximately two hours a day, seven days a week. Many Millennials do not watch regular TV at all.

• There is a shift away from cash. There are many new electronic payment systems.  However, the problem is that technology advances so fast that is difficult to choose one and jump in with a leap of faith and your hard-earned money. Security is also a big concern, as some of the world’s thought to be most secure have been breached. However, new EMV chip-embedded technology is a big security advancement over the magnetic stripe.

The general public seems to be happy with swiping a credit/debit card, but the truth is that there are many in our population that do not have a banking relationship, they deal in cash as in underground economy. AMOA has taken a position of keeping an eye on the leading payment systems such as USA Technologies that currently charges a 2.5 percent transaction fee. Another company is developing a completely cloud-based payment system that has no hardware at all. Is it possible for cell phone technology to replace existing debit card systems? The vending industry is currently taking the lead over amusements on both e-payment and wireless GPS communication with people that download the appropriate app.  The problem is how do you get everyone to download the app?  That is the question that still remains unanswered. The industry term ubiquity applies here.

In conclusion, these trends show that there are many great opportunities for our industry.  Companies and entertainment centers that can add value over those who are afraid of change will thrive in 2016 and for many years to come.  Knowledge is like a magic pill.  Swallow that instead of the status quo!

Amusement Expo is Your Next Opportunity to Network and Learn 

This year AMOA/AAMA have put together a full day before the Expo of educational seminars geared for FECs, game operators, laser tag owners and bulk vending operators. This is the Expo that has all of the latest games and prize merchandise selections.  The best part is it is not nearly as big as IAAPA and there are ample opportunities to speak directly with the CEOs of nearly all of the exhibiting companies over the two days. There will be no Night Club or Pizza Expo attendees this time around as some exhibitors strongly wanted to spend more time with their current customer base. That is absolutely good for us Boyz, but whether you are for or against this policy, let’s take advantage of the state of affairs.

Frank will be presenting two seminars at Amusement Expo—one for the AMOA/AAMA program and one for the laser tag program.  Hope to see you there.

(Scott C. Borowsky is president and executive editor of Tourist Attractions & Parks magazine.)

Back

Sorry, the comment form is closed at this time.

Sponsors

No results.

Spectrum
Extreme Engineering
Funovation
Premier Polysteel
Rebound Unlimted, Inc.
American Conference