468 Retail and Channel Management Blog

Monday, March 13, 2017

The Rec Room: Location, Location, Location


Since opening in mid-September 2016, The Rec Room has firmly established a foothold in Edmonton with their South Edmonton Common (SEC) location. The Rec Room in SEC is a 60,000-
square foot facility with various entertainment options for customers to choose from. The Rec Room has attractions that appeal to a wide variety of consumer demographics, with activities such as axe throwing, virtual reality games, arcade games, and an upscale dining room. To build on this wide appeal, The Rec Room seems to have chosen a location that already has a large established trade area and a valuable complementary business right across the parking lot.

There is a wide selection of retailers located within the SEC area, including a variety of restaurants (i.e. The Keg) and super-centers (i.e. Walmart). The all-encompassing range of venues is successful in attracting various customers with different necessities. The multiplicity of the retail center provides The Rec Room with a sizeable trade area that surely contributes to its success. Furthermore, SEC is located on the southern edge of the city, making it more accessible to those individuals who reside outside of Edmonton (i.e. Beaumont or Leduc). In addition to the location being easily accessible, Cineplex went a step further in ensuring they could effectively reach their customers by placing The Rec Room across from a complimentary business, a Cineplex theater.

This complementary business is an important factor to consider because Cineplex already has information on consumer segments in the area through data attained via their SCENE rewards program. Using this data, Cineplex can ensure the location they’ve chosen will effectively reach their program members, while also attracting a variety of other consumers.  To further attract their loyal
customer base, Cineplex has made it possible for members of the SCENE rewards program to earn points at The Rec Room. This promotion looks to lift sales to program members at The Rec Room, while also attempting to shift business to their movie theater where members can use the points earned at The Rec Room. The overwhelming success of Cineplex’s location decision is clear as Ellis Jenkins, President and CEO of Cineplex, declared that “The launch of The Rec Room at South Edmonton Common has truly surpassed our expectations”. The success has been so great that Cineplex appears to have taken the same approach when deciding their second The Rec Room location in West Edmonton Mall (WEM).

Some similarities can be drawn between the two Edmonton locations. Firstly, both consist of many different retailers which, when considered together, boast large and well established trade areas that stretch beyond Edmonton’s city limits. Furthermore, the WEM location seems to compliment the SEC location; the trade area of WEM is more likely to stretch West and North of the city, while SEC’s trade area is more likely to stretch East and South of the city. This gives Cineplex almost complete coverage of the Edmonton area. Secondly, a Cineplex theater is present at both locations; this allows Cineplex to utilize the data that they already have on their consumers before even opening The Rec Room’s doors.

Once both locations are analyzed, it is evident that Cineplex strategically placed their two Edmonton The Rec Room locations in large established shopping centers and near Cineplex theater. This allows The Rec Room to take advantage of a larger than normal trade area and the loyal Cineplex customer base established by the SCENE rewards program. The combination of these advantages has allowed The Rec Room to effectively reach the largest customer base possible from their SEC location. The success of this location is already evident and, the WEM location seems set to follow in the SEC location’s footsteps.


References:
Murray, Kyle. B. The retail value proposition: crafting unique experiences at compelling prices. Toronto, ON: University of Toronto Press, 2013.



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