Scheels has built a chain of sporting goods stores that resemble theme parks more than aisles, with Ferris wheels, aquariums and hands-on demo zones inside the selling floor. A Retail Dive reporter’s notebook published this week walks through one of those locations and describes something more useful than spectacle: a format where every attraction sits next to a department it is meant to sell. The lesson for retail operators is not that entertainment sells. It is that a destination format only pays back when the traffic it creates can be measured against baskets, labor and square footage.
Key Conclusions
The economics of a destination format are easy to describe and hard to prove. Attractions raise capital expenditure per square foot, add maintenance and staffing cost, and consume space that could hold inventory. In exchange they raise visit frequency and dwell time, which in theory lift conversion and basket size. The theory only holds if the operator can separate the lift caused by the attraction from the lift caused by seasonality, assortment or local competition. Without that separation, a flagship becomes a marketing expense that is defended by anecdotes.
What makes the Scheels example worth studying is the placement logic. Attractions are not collected in a single entertainment zone; they are distributed next to the categories they support, so a shopper waiting for a ride stands inside a department. That layout converts dwell time into exposure, and exposure into a measurable sequence of interactions. Retailers that cluster all entertainment at the entrance get footfall without context, which is why so many flagship experiments fail to justify their cost after the novelty fades.
Inside the destination format
Why the attractions sit inside departments
The placement decision changes what the format can measure. When a Ferris wheel sits beside footwear, the operator can compare basket composition for shoppers who ride against shoppers who do not, within the same department and the same week. When the same wheel sits in a lobby, the comparison collapses into store-level traffic, which is too coarse to attribute. Placement is therefore not a design preference but a measurement decision, and it should be made with the analytics team in the room.
The cost side that rarely gets quoted
Destination formats carry a cost structure that is unusual for specialty retail. Rides and aquariums require maintenance contracts, safety inspections and dedicated staff, and they consume hours that would otherwise go to selling. Those costs are fixed and visible, while the benefit arrives as a diffuse lift in conversion. That asymmetry explains why the format spreads slowly: it is easy to copy the spectacle and hard to copy the operating discipline that keeps the spectacle from becoming a cost center.
Best Practices
Define the unit of measurement first
The first step is to decide what a successful visit means before the format opens. Operators can choose dwell time, department penetration, basket size, or repeat visit rate within ninety days, but they should choose two at most and define them precisely. A format that promises everything measures nothing, and a flagship that cannot report a single clean number will lose its budget in the first planning cycle after opening.
Build a comparison group before launch
The second step is a comparison group. Where a chain has similar stores in comparable markets, the operator can hold two or three of them unchanged and compare performance over a full season. Where no comparison exists, the next best option is a within-store comparison: shoppers who engage with the attraction against those who do not, matched by department and time of day. Neither method is perfect, but both produce evidence that survives a budget review.
Tie labor to traffic, not to sales
The third step is labor scheduling. Destination formats generate uneven traffic, with peaks around events and weekends that do not match a standard staffing curve. Scheduling to traffic rather than to prior sales keeps service quality stable during peaks and avoids overstaffing during quiet hours. The saving from that single change often funds a meaningful share of the format’s maintenance cost.
Common Mistakes
The most common mistake is treating the attraction as marketing and the floor as sales, with separate budgets and separate owners. That split guarantees the format will be judged on traffic and the floor on margin, and neither team will own the conversion between them. A destination format works when one team owns the full path from entry to basket, including the labor that supports both.
A second mistake is copying the spectacle without the operating model. Chains that install a ride or an aquarium often skip the maintenance contracts, the safety training and the traffic-based scheduling that make the format sustainable. The result is a photogenic store with rising cost per visit and falling service scores, which is worse than a plain store because it raises expectations it cannot meet.
What this means for store portfolios
Destination formats are not a chain-wide solution. They work in markets with enough catchment to support repeat visits and enough competition to make differentiation valuable. In smaller markets the same capital is better spent on assortment depth and service speed. The practical question for a portfolio is therefore not whether to build a flagship but how many flagships a given catchment can support before the marginal one cannibalizes the others.
There is also a measurement dividend that outlasts the format itself. Once an operator has built the instrumentation to attribute dwell time to baskets, the same instrumentation can be used to evaluate assortment changes, layout revisions and staffing models. That capability is the real asset, because it turns every subsequent store decision from an argument into a comparison. The Ferris wheel is optional; the measurement is not.
Summary
The Scheels example is best read as a measurement story rather than an entertainment story. Attractions placed inside departments create a sequence that can be attributed, and attribution is what allows a flagship to defend its capital cost after the novelty fades.
For operators the sequence is clear. Decide two metrics before opening, hold a comparison group through a full season, and schedule labor to traffic rather than to prior sales. Each step is inexpensive relative to the format itself, and together they convert spectacle into evidence a finance team can accept.
Data Sources
- Reporter's notebook: Inside Scheels' sporting goods wonderland
- High prices push September retail sales up 6.7% over last year
- Nearly half of shoppers are worried about affording holiday gifts this
- Tractor Supply opens Idaho distribution center with automation, dedica
FAQ
What defines a destination store format?
A: A format where attractions, experiences or services are used to increase visit frequency and dwell time beyond what the assortment alone would generate. The defining feature is not the attraction itself but whether the resulting traffic can be attributed to sales.
How should dwell time be measured?
A: Most operators use a combination of entry and exit counts, Wi-Fi or camera-based journey tracking, and point-of-sale timestamps. The method matters less than consistency: the same definition must be applied to comparison stores for the full measurement period.
Is a Ferris wheel a reasonable investment?
A: Only in markets with sufficient catchment and competition. The attraction raises capital and maintenance cost while the benefit arrives as a diffuse lift in conversion, so it needs a large base of repeat visits to pay back. Smaller markets usually do better with assortment and service investment.
What is the biggest operational risk?
A: Labor. Destination formats create traffic peaks that do not match standard staffing curves, and understaffing during peaks damages the experience the format was built to create. Scheduling to traffic rather than to prior sales is the most reliable fix.
Can the approach work for grocery?
A: Partly. Grocery has thinner margins and higher visit frequency, so the payback logic differs. Food service counters, cooking demonstrations and click-and-collect desks can play a similar role, provided the operator measures basket change rather than footfall alone.
