May 23, 2018
For years, data analysts have fantasized about the arrival of the retail apocalypse. But retail isn’t dying. It’s just changing. Brick-and-mortar stores are no longer just points of sale. They’re evolving to become billboards of experience; venues of experiential shopping.
You might even call them stages, where retailers court their customers through innovative displays and interactive entertainment.
With experiential shopping, retail becomes “retailtainment”
Experiential shopping is the perfect antidote for a long-struggling sector. And the reason is that it appeals directly to that key demographic: millennials. Millennials are driving change: 59 percent say they’d choose an experience over a materialistic purchase.
What’s more, experiential shopping feeds into the idea of the customer journey.
The retail store is fast becoming the place where customers come for an unforgettable experience. And despite all the convenience of online shopping, it’ll never quite live up to the experience of brick-and-mortar shopping.
Take the phenomenally successful PGA Tour Superstore for example. Sure, customers can order their equipment online. But in the store, they can test out equipment in VR driving ranges. They try clothes on before buying them.
PGA Tour even has pros in certain stores to give customers tips on their swing.
When it’s done well, experiential shopping builds brand associations that can benefit retailers’ bottom lines, even without the need to push products in store.
A customer’s experience means that, months later, when they need your product, they’ll remember your brand and order online.
Which retailers have got to grips with experiential shopping?
In London, House of Vans opened up a skate park, giving their customers a space to do what they do best—for free.
But it’s Samsung that has redefined the boundaries in experiential shopping by spending $43 million on their Manhattan “popup,” Samsung 837.
Focused entirely on interactivity, the venue is packed with art, VR area, and even a live music studio. As Samsung CEO Michael Koch commented,
“In a retail environment, we did not focus on product, we focused on activity.”
True to his word, the only thing on sale there is coffee.
Now, I know what you’re thinking. “All well and good if you’re a retail giant like Samsung. But what if you don’t have $43 million lying around to invest in an experiment?”
That’s a good question. And it leads us on to a neglected aspect of this new retail trend. Where does experiential shopping leave smaller businesses with smaller profit margins?
What are the real costs of in-store experiential shopping?
There’s no one-size fits all answer; it’s a matter of creativity. Customers want something memorable, personal—ideally—Instagrammable. Tweet This
That’s why new-arrival mattress firm Casper had such success when they sent out a fleet of “napmobiles” so potential customers could try out a mattress in a camper before buying online.
Ultimately, smaller retailers can invest as much or as little as they want to in experiential shopping. The important thing is that they do invest.
Because the bigger question is, what’s the cost of not investing in experiential shopping?
In reality, the move towards experiential shopping is something retailers can’t afford to miss. According to a recent PFSK report, 68 percent of retailers will have invested in experiential shopping by 2020.
So if you want to compete (or rather if you don’t want to go under) you need to get creative.
Creativity and adaptability are the keys to success
As we enter this transition period, many retailers are turning to data-driven solutions to safeguard their bottom lines as their businesses change and grow.
The ability to instantly identify market trends and meet demands as and when they arise will make or break retailers over the coming years. And while it’s true that some big names have gone under, there’s no reason this should be true for companies that are willing to adapt.
About the author
Alexander Meddings is Evo’s content expert on artificial intelligence, machine learning, and related topics.
He is an experienced journalist who covers branding, social media, marketing, and technology, with degrees from the University of Exeter and University of Oxford.