Howard McAuliffe’s Now Trending – September 2016

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Community Hubs

Creating a Fair Social Experience Benefits Your Locations & the Industry

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Howard McAuliffe

by Howard McAuliffe, Partner, Pinnacle Entertainment Group

The marketplace for Family Entertainment Centers is growing significantly, which is great news for us. I believe that to keep this momentum going, it’s important that we make sure we’re operating at the highest level possible for individual profitability, as well as our collective brand.

In order to create really great facilities, it’s important to understand the difference in overall philosophy between creating an attraction vs. capitalizing on high traffic with the goal of getting as much money from the customer as possible in a short period of time. This is a very important distinction because our industry is comprised of companies who operate in both worlds, and suppliers who supply both. Each is a good model depending on the location, but in order to create a true “attraction,” the philosophy is much different.

It takes significantly more planning, investment and level of execution to create an attraction, but the rewards are worth it. The most successful arcade integrations are attractions that combine components like bowling, laser tag and a redemption game room, with quality food and beverage to execute a great out-of-home customer experience.

According to Trendhunter.com, a top movement this year is in what they call a “Retail Community.” By their definition this is retail “offering value beyond mere products and serving as community hubs.” This is great news for us because there is a clear demand for community social hubs and our facilities can be these hubs!

For example, bowling has been a hub for generations as bowlers competed with friends and family regularly in leagues. It was bowling, but it was also a social experience. The model has drastically shifted away from leagues to a more casual bowling customer, but at the core, a bowling center is a place for people to interact, have fun, and spend time outside of the home. I would argue that bowling entertainment centers are actually better community hubs than their league-centered facilities of the past because of the vast entertainment options available that can cater to diverse interests.

In order to maximize this experience, it’s important to consider all members of a family including kids, parents and grandparents. This can be accomplished by offering décor, seating and food options, as well as prizes for multiple demographics, while making sure the different groups don’t irritate each other. It doesn’t just have to be a bowling entertainment center. A recent client, who owns and operates a pizza restaurant, created a wonderful community hub. There was concern that adding a game room would create disruptive noise and commotion within the restaurant, which might irritate his adult customers. However, he was pleasantly surprised that by adding a separate game room, the noise and activity in the restaurant was reduced. He found that the kids in the game room were occupied and having fun,  and separated from the restaurant and patrons enjoying their meals. Site lines into the space were key so parents could keep an eye on the kids, while still enjoying their time alone. This client created an entertainment hub by providing a good value in terms of time versus dollars spent.

When we operated in Walmart, we wanted to get as much money from our customers as possible during the short two minutes we had their attention (as they walked in and out of the store). These customers were going to Walmart primarily to shop; the games were only a tiny portion of their reason for going and overall spend. That works for that business model, but if we want a game room to be a community hub, that philosophy is disastrous. In this situation, one of the reasons a family comes to the location is for the games and we need to ensure that the cost of that game time enjoyment is key.

This means we want the entire family to enjoy their evening: the kids have fun and the money their parents give them to play lasts a reasonable amount of time so parents can enjoy time alone without it costing them a fortune. Creating this environment takes significant planning in game selection, game pricing, payouts, etc. The days of simply plugging in games and collecting the cash box are long gone.

In the case of our small-town pizza restaurant, the efforts were successful and they were able to draw customers from a very wide geographic area. The owner was so happy with his profit margins he said adding the game room was like adding a second restaurant!

For centers that are embedded into a community as a social hub, repeat business is key. Patrons must receive a fair value, which includes skill-based games, fair payout and fair pricing. Not only is this important for repeat business and building lasting relationships, it also helps build a positive perception of our industry as a whole!

If a facility’s focus is on extracting as much money as possible as quickly as possible, customers will feel they didn’t receive a good value. The result will be eliminated or reduced return visits. That might work for some traditional street locations that capitalize on a lot of traffic walking by the games, or with large amounts of seasonal clientele like an amusement park or the Jersey Shore, but not for a community-based location. It’s important to make the distinction between creating an attraction, especially one designed to be a community hub, and a location where you’re maximizing revenue during short windows of time.

Creating a community hub is challenging, but it’s amazing to realize we can be such a significant part of our customers’ lives and our culture. I went to the arcade with my son and my father recently and there we were: three generations who grew up with video games in their various forms. We are at a point where games are a key component of our culture.

Of course, kids will play far more video games at home these days, but for me, the real fun is in creating a true community hub that allows for a social experience. I’m glad this is what’s happening in the market today, and I believe this trend will continue for several more years.


Howard McAuliffe loves to imagine and implement new products, business models, and ideas, and is a partner in Global Product Services and piaproducts.com. He’s an industry veteran who got his start in the business when he was just 16 and has over 15 years of expertise in product development, as well as FEC and route operations.  Howard’s wife Reem and young son Sami are the center of life outside of work. When he’s not working, Howard can be found enjoying the outdoors, hiking, fishing and mountaineering. Traveling anywhere new or to old favorites like the American West is a passion.  He can be reached at hmcauliffe@globalproduct services.net, and appreciate comments as well as feedback.

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