When it comes to in-store shopping, the experience counts just as much as the sale. When consumers can go online and buy just about everything, you need to provide them with a solid value proposition as to why they should make the effort to come into your store.
The future of brick and mortar is not as a storehouse for your inventory, but a space for consumers to be immersed in your brand identity and story.
Enter: Experiential retail.
What is experiential retail?
Experiential retail is a marketing strategy where physical retail spaces offer additional experiences beyond browsing or buying products. Experiential retail stores use amenities such as advanced technology, exclusive in-store services or events, and knowledgeable staff to create memorable in-store experiences that foster brand loyalty.
Why retailers should invest in experiential retail
Brick and mortar is making a big comeback
After being severely disrupted by the COVID-19 pandemic, all signs are pointing to a major revival of physical retail. According to the Wall Street Journal, spending inside stores and restaurants increased in June, while product categories like furniture, sporting goods and building materials saw a drop in demand — the exact opposite of last year.
As stay-at-home orders come to an end, it’s clear that consumers are raring to get back to stores for more reasons than curbside pickup; they want to explore and be engaged by unique retailing.
Younger consumers are experience-orientated
We could easily call 2020 the year of Amazon, due to widespread consumer reliance on the marketplace to meet their needs. But this has drawn attention to what ecommerce can’t offer; immersive, memorable brand experiences. For millennials, this holds particular importance. According to a study by the Harris Group, 72% of millennials would rather open their wallets for experiences rather than products.
By investing in experiential retail, you’re giving consumers more reasons to walk into your store and spend time experiencing what your brand has to offer. It’s the gateway to building a lasting relationship with your customers.
Building loyalty through value-added retail
In such a competitive retail sector, brand loyalty has become harder to acquire. It takes 37% of consumers at least five purchases before they consider themselves brand loyal, and their experience plays a key role; 93% of customers say they will most likely purchase from a brand again if their previous experience was excellent.
Experiential retail projects provide a major point of difference for brands. Instead of the in-store experience being purely transaction-orientated, it provides additional value by giving consumers access to inspiration and for what a retailer can help them to achieve as a customer.
Experiential retail examples (and tips on how to do it)
1. Implement omnichannel offerings
Consumers might enjoy shopping in person, but this doesn’t mean they’re not utilizing other channels to assist their purchasing decisions. According to AdColony, 61% of consumers consider their smartphone to be “very important” to in-store shopping.
You can improve customer satisfaction by facilitating smooth transitions between your digital store experience and your offline offerings. Refining these touchpoints also gives you valuable insight into consumer behavior and how customers want to engage with your brand.
Example: Nike Rise
Nike is a trend-setter when it comes to immersive in-store shopping. Nike Rise, their latest experiential store concept, is pushing omnichannel to a new level via the Nike app.
The “Nike experiences” feature enables shoppers to book exclusive events, fitness classes, and product customization services. Nike uses this data to refine the store’s value proposition according to what offerings resonate with customers the most.
Footwear shopping is also a lot more tech-enabled (and convenient). Associates in-store are equipped with Nike Fit, a foot scanning technology “that uses a proprietary combination of computer vision, data science, machine learning, artificial intelligence, and recommendation algorithms” to help shoppers find the best fit for them.
2. Invest in personalization
In today’s hyper-connected world, consumers have come to expect personalized content wherever they look. According to Forbes, 71% of consumers are frustrated when a shopping experience feels impersonal. Your experiential retail experience will be much more compelling if you invest in creating tailored experiences for your customers.
Farfetch has become a pioneer for how digital data can be used to personalize the shopping experience. Its so-called “store of the future” utilizes RFID technology to populate customer wishlists with items pulled from their browsing history, enabling advanced personalization of the brick and mortar store experience. The brand is planning further investment in augmented reality and niche payment options to deepen their customer-centric brand proposition.
3. Provide opportunities to test/try products
The biggest disadvantage of online shopping is customers’ inability to test products before purchasing. That’s why consumers often want to visit a store location to inspect the item first.
Experiential retail should enable consumers to test out products in ways that deepen the customer experience and build confidence in your product.
Example: Casper Sleep
No one would willingly buy a mattress without testing it first. That’s why Casper experiential retail stores where consumers could book Nap Appointments to properly test out their mattresses, sheets, and pillows. It’s an excellent strategy that perfectly aligns with Casper’s philosophy of helping people sleep better.
Nap Appointments can be booked online, and serve as 30-minute private shopping sessions that allow customers to fully experience Casper’s products on their own time.
4. Build a community-focused space
The purpose of experiential retail isn’t to get as many customers through the checkout as possible; it’s to create an immersive experience that strengthens customer relationships with your brand. Storefronts should guide visitors into participating in your brand philosophy in ways they cannot do online.
Creating retail spaces that consumers want to relax and spend time in, whether that’s through interactive dressing rooms or hosting local events, is the key to projecting authenticity.
Example: House of Vans
Vans’ latest location in downtown Los Angeles personifies the skate brand’s laidback and creative approach to retail. The two-floor, 11,500 square foot space includes an art gallery, skate shop, and studio which offers free art workshops. The brand also partnered with LA non-profits to recruit homeless youth to work at the store, highlighting their commitment to serving their local area.
5. Offer value-added services
For experiential retail to be successful, physical retail stores need a key point of difference. If your storefront is a cut-out of your ecommerce website, you’re providing customers with no incentive to walk through the door.
The best ways to address this? By offering value-added services that your customers won’t find anywhere else.
Apple was among the first retailers to start investing in experiential retail — and it’s paid off dividends for their appeal amongst millennials and baby boomers alike. With knowledgeable sales associates, in-store classes, and exclusive events, Apple has transformed its physical stores into memorable brand experiences that inspire loyalty with every visit.
6. Implement localization
A major mistake when it comes to running multiple stores is not localizing your assortments and experiences. When offerings don’t feel fresh or unique to different audiences, this makes it difficult to maintain customer retention.
So, if you’re launching an experimental retail store in a specific neighborhood, your concept should reflect the location and the people who live there. This helps to build a rapport with new customers and create more memorable retail experiences.
Ikea might be ubiquitous around the world, but the brand is a master of localization. Ikea does extensive research before opening store locations, including going into locals’ homes to find out what items they’d be interested in buying. This has allowed the company to subtly customize its product selections, while keeping iconic elements of the brick and mortar experience.
7. Test consumer demand with pop-ups
Experiential retail can be a costly undertaking. So, it’s important to test your concept with your intended audience to make sure that it resonates.
Pop-up stores are a great way for retailers to test-drive their showrooms on a smaller, short-term basis. You gain access to valuable customer feedback and confirmation of whether a neighborhood is a good fit for your brand.
Glossier has built a cult-like social media following through its Instagrammable stores that reflect its minimalist brand aesthetic.
Glossier maintains just a small handful of flagship stores. But the brand has a well-oiled network of pop-up locations in cities with large customer hubs. This experiential retail strategy allows Glossier to perform on-the-ground market research into future permanent locations.
Glossier is set to open three new stores in 2021 in Seattle, Los Angeles, and London — cities that have hosted successful pop-ups in the past.
If there’s one takeaway from this article, it’s that experiential retail isn’t just a fad, but the future of retail as we know it. As more brands invest in memorable store experiences, the more to impress consumers is only getting higher. By using the points above to develop your experiential retail strategy, you can create a store concept that wows customers and builds your brand presence.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.