Technology in the leisure sector - is it too little too late?
Wherever you look, whether it is your weekly online shop,your digital walleton yourphoneoryour Smart TV,it is clear to see that technology is making its way into every aspect of modern life.
We also see tech revolutionising the property sector as speakers made clear at last year’s RPAiGenerationevent. Speakers from a range of industries explained that embracing technology was key to keeping shoppers interested in physical stores-whether that be as extreme as the automated, cashierless Amazon Go stores soon to be rolled out in UK or the digitized shopping experience at theNike Live store, or perhaps simply making the best use of social media to drive footfall to a location.
But are there similarideasin the leisuresector? And does this have an impact on store network expansion and growth? I'm going to look at a few sectors in the entertainment sector.
Bowling: A different kind of Turkey
From 2018to 2019,the twostand-outleadersin thebowlingmarket;Hollywood Bowl and Tenpin, bothexperienced growth andincreased theirvenue networkacross GB, compared to thestruggling independentbowling centres –whichsaw an 8% decline in the last 12 months (January 2018 to January 2019).
Figure 1: Net percentage change of estate numbers for top GB bowling alleybrandsover the last 12 months (Source: LDC)
The Hollywood Bowl Group was formed in 2010 after a series of mergers and acquisitions within the sector (and now includes brands AMF, Hollywood Bowl and Bowlplex). The group had a clearly defined strategy from the get-go with one of their keystrategies being to invest in technology. Walking into a Hollywood Bowl today, you might see one of the computerised VIP lanes or a virtual reality (VR) attraction on offer, showing that the group’s vision of embracing technology has become a reality.
As VR is still arelativelynew technology, the pricey headsets are too expensive for mostconsumerswanting toexperience VR for the first time. Leisure locations like bowling alleys areacost-effectiveway forconsumerstotry out differenttechnologies, whilstalsoproviding achannelfor tech companiestolaunch andpromotenew products.
The new technology focushas clearly paid off, with thegroupquickly becoming the market leaderin the sector, which ishighlightedby their continued growth(+2%increase insites in last 12 monthsacross the whole Hollywood Bowl Group)alongsiderecently revealing record profits and revenues last year,despite tough trading conditions.We can see the current locations ofsites in theHollywood BowlGroupon the map taken from ourlocation insight platform, LDO below. We can also track the impact of the strategic partnership withintuwith17% of Hollywood Bowl’s portfolio appearingin shopping centres (compared to just 7% for their main competitor Tenpin).
Figure 2: Map of the Hollywood Bowl Group portfolio (Source: LDC)
Tenpin also appears to be embracing technology in what has long been a relatively low-tech industry. They too have incorporated a VR experience into one of their Tenpin centres and have 12 locations offering their own ‘4D’ Laser Tag experience (Source: Tenpin).
Thefastest growingbowling alley brandin terms of openings is Superbowl UK, which has seen asizableincrease of+29% sites inthelast 12 months, withfivemorelaunching in the nexttwoyears.SuperbowlUK alsobrings tech experiences to the tablewith eitherLaser Tag or a Ninja TAGcomputerisedassault course on offer at all of their current locations which again showsashift in focus towards technology-driven activities.
Consumers are increasinglydemandingvalue for moneyacross leisure experiencesand extending therange ofproductson offer in asinglelocation gives more reasons to visit andincreasesdwell time andsecondary spend.Independentbowlingcentresand smallerbrandslike MFA Bowlmaynot have the capital to invest innewtech experiences like Hollywood Bowl and Tenpin can,which could beone of thereasonsforitsrecent decline(MFABowlsawa7%reduction insites in last 12 months).
Bingohalls:85Staying Alive or78at Heaven’s Gate ?
In the past 12 months, we’ve seen somebig changes in the highly profitable gambling industry.Thecontinuing increase and popularity of online gambling siteshasfinallyforcedthetraditional bingopowerhouseGalatotake actionand re-invent their offer.
Under a huge rebranding initiative,every Gala club across the country will be converted into a Buzz Bingo by February 2019. This will accompanythe launch of a new digital platformasGalaaims to capitalise on recent trends which show younger people are going out more often. The rebrand hopestobring this new generation of players into thenew-lookbingo halls.Their goal is tomove forward technologically andcreate an omni-channel platform that runs across mobile, desktop and on the electronic touchpads in allofits clubsin a hope to offer something different to the pure play online sites.The question is whether thismoveis toolate,with other competing Bingo offers such as Bingo Academyalreadytargeting the younger demographic.
Snooker halls -It’s only a game so, put up a real good fight
Figure 3: Changes to estate numbers for GB snooker and pool halls in the last 12 months (Source: LDC)
When we look at snooker and pool hall openings and closures over recent years, we see that this subsector is in a state of decline. Top sports bar chain Rileys was operating in 59 locations in the UKfour years ago until it hit financial difficulties, when it immediately shut 15 venues.It has been closing more year-on-year and now operates just 24 venuesnationwide. We also have seen independent snooker and pool halls declining slightly in the last 12 months, as they fail to introduce tech into their products and consequently get ‘snookered’ out of the market by other leisure locations. One example of this is the brand Flight Club, who have come up with an exciting new way to put a competitive spin on darts - a key Rileys offer.Other competing leisure pursuits that have seen growth includeescaperooms-which attract both workgroupsand socialconsumers andmini-golf with the expansion of Top Golf, Swingers and Junkyard.
Our prediction for this market is that it will take more technology-focused businesses to reimagine and consolidate these fragmented sectorsto savethemfrom further decline.It is clear to see that customers are looking for a change to the status quo when searching for leisure activities, and so withoutbusinessescontinuallythinking outside the box andinnovating their offers,the traditional leisure experiences may become a thing of the past.