Is Korea’s Arte Museum the future of experiential retail?

on’t be ready to welcome the public until late this year, but the mall owner, Macerich, was understandably gushy. That’s partly because of genuine enthusiasm for the concept that they hope will attract upward of a million visitors a year. However, there was also an element of relief that the lease had been executed, since it’s been hard work getting viable tenants committed to such a large space. Despite its fantastic location just 10 minutes from the Pacific Ocean front and Santa Monica Pier, Macerich still has a job on its hands: the Bloomingdales two levels accounted for another approximately 9300sqm that remains to be filled. An experiential tenant like Arte Museum is a trendy choice to replace the cinema. D’strict has an impressive track record for creating high-impact media art in public space, both for exhibition purposes and for marketing brands such as Dior, Huawei, Porsche and Samsung. Its public art includes “Wave” in Seoul’s K-Pop Square, and, in the summer of 2021, “Waterfall-NYC” and “Whale #2” in New York’s Times Square. For the waterfall exhibit, D’strict simulated water cascading down hundreds of metres on digital screens on the One Times Square building; for the whale exhibit it made a 2800sqm space on the side of another building into a vivid 3D simulation of a blue whale swimming through ocean waves. The Arte Museum exhibition concept debuted in the Korean city of Jeju in September 2020, followed by branches in Yeosu and Gangneung in 2021. It had its first international opening in Hong Kong in October 2022, appropriately in a partnership with New World Development subsidiary K11, parent of the art mall concept. Adults pay 128 HKD (approximately US$16) to see the exhibition on weekdays, 148 HKD on weekends. Santa Monica Place: a checkered history Santa Monica Place has had a checkered history. It sits at the top of Third Street Promenade, a famous shopping, food and entertainment strip. The mall originally opened as a conventional enclosed mall in 1980 but by the time Macerich bought it in 1999 it had lost its mojo, partly because of the declining popularity of its department store anchors and a related shift in consumer sentiment away from enclosed malls. This was the beginning of the era of lifestyle centers, which were purpose-built open-air streetscapes, or town centres, that tried, in the best instances successfully, to mimic neigbourhoods like Third Street Promenade. Accordingly, Macerich contracted famed urban streetscape architect Jon Jerde to redesign the mall so that it integrated with Third Street: accordingly, Jerde had the roof removed from the mall and reconfigured it as nearly as it could to be a kind of an upscale end exclamation point to the Promenade. The connectivity between mall and strip became virtually seamless. The redesigned centre reopened in 2010 with Nordstrom and Bloomingdales as the new anchors. A decade further on, the wheels began to come off as it did with so many centres that were just on the cusp before Covid struck. The closure of the Arclight Cinemas at Santa Monica Place came as no surprise, as the whole Los Angeles movie theatre market was hammered by Covid-driven closures. Even before Covid, the Santa Monica location was reportedly among the lowest grossing of its owner, Pacific Theatres’, 17-cinema chain. Meanwhile, the exit of Bloomingdales at Santa Monica Place in early 2021 was part of an ongoing portfolio winnowing by its parent company Macy’s, which announced closings of 44 other department stores for the first half of 2021 alone. These were underperforming stores that Covid gave a final push. Still, Bloomingdales as a chain of department stores hangs on. It even has two stores outside the US, one in Dubai Mall (opened 2010) and one in 360 Mall in Kuwait (opened 2017) both operating in a partnership between Macy’s and Al Tayer. The Middle East stores were part of a tentative movement by Western department stores into the Middle East and Asia, a migration tested by other companies, such as Harrod’s, Galeries Lafayette, Marks & Spencer and Debenhams. Some of these have been modestly successful because the retailer didn’t try to directly replicate its domestic model. Others ended in notable failure, as they tried to self-replicate the brand awareness and business model that worked for them domestically didn’t carry over in other countries. Are we expecting too much of experiential retail? With department stores and fast fashion anchors trimming their portfolios, experiential tenants have become the next ‘big thing’. Will they work as shopping mall anchors over the long haul? The history of retail is replete with concepts that sounded good but didn’t stand the test of time, either because the economics didn’t stand up to the hype, or because there was a pile-on of copycats and the public became jaded with them. In the case of Arte Museum, it will have a 2300sqm exhibit in the experientially crowded Las Vegas market operating for months before it gets to open in Santa Monica Place, so Macerich will be keenly watching to see how it goes. The Las Vegas Strip is already home to, among others, Perception Las Vegas, a self-described state-of-the-art digital art museum. Its current featured exhibit is a “journey into the mind of the great Leonardo Da Vinci” with tickets at around US$35. Whether the trendy Santa Monica shopper will put up with a superabundance of experiential concepts like Arte Museum, only time will tell. One thing is for sure though, department stores like Bloomingdales won’t be coming back, so for this 42 year-old shopping destination, a lot depends on this space-hungry Korean migrant wowing the public.