Experiential retail is the overall experience that traditional retailers provide to shoppers in physical stores. Pop-up shops, in-store masterclasses, and community events are all examples of experiential retail.
What is experiential retail?
Experiential retail is the process of creating unforgettable shopping experiences for consumers. It engages customers directly and invites them to experience your brand in the real world and in person.
With increasing consumer selectivity regarding the brands they shop from, the store experience must stand out from the rest. However, the store experience should not be clichéd and completely disregard the commercial element. At the end of the day, shoppers are still there to discover and purchase products.
According to a study by Forrester Consulting on behalf of Shopify, over two-thirds of consumers (35%) plan to engage with brands through experiential moments over the next year. So it’s no surprise that 40% of brands said that delivering experiential retail would be a major priority for them in the coming year.
Experiential retail vs traditional retail
While traditional retail places the consumer in a spectator role, experiential marketing uses participatory activities to create personal interactions. This includes everything from free classes to food and beverage tastings, pop-up shops, art exhibits, and parties.
The main difference between traditional retail and experiential retail is that customers can do something in-store rather than just purchasing something. Of course, there is always the option and incentive for store visitors to head to the checkout with a product in hand. But experiential retail engages shoppers by having them do something interactive.
As a result, it provides a more engaging shopping experience – one that helps people remember your brand for months to come.
Benefits of experiential retail
Three out of four brand marketers gave a rating of “very important or somewhat important” to experiential marketing, according to a study from Crossmark. Some retailers in certain countries see the positive impact of experiential retail faster than others. In China, for example, 78% of department stores have added experiential elements to their stores.
Let’s look at the reasons why experiential retail is a priority for many retailers.
Meeting experience purchases
The retail landscape is continually changing. Today, customers don’t just want to buy products; they are looking for memories. And they are willing to spend more money on them: about 76% of shoppers prefer to spend money on experiences rather than products.
Experiential retail combines products and experiences to achieve the best of both worlds. For example, a hair care store with a barbershop provides an experience that attracts a young audience willing to spend money, with products available for purchase naturally.
Highlighting community and charitable issues
Quality, price, and convenience are three elements on the mental checklist for many consumers when searching for brands to purchase from. However, there’s one box that retailers often overlook: purpose.
Research indicates that 77% of people feel more positively about brands that make efforts to support the community. Additionally, for some generations – like Gen Z and millennials – community is fundamental. After being dubbed “the loneliest generation” due to growing up amidst a digital revolution, half of Gen Z consumers want brands to have a social impact that they can be part of.
31% of consumers said they want experiences that make them feel community in the stores they visit, such as organic product fairs and book clubs. Experiential retail allows you to offer those branded experiences to customers who are eager to support their local community.
Building
Brand Loyalty
It is estimated that 93% of customers will make repeat purchases from companies that provide excellent customer service. But this outstanding service doesn’t just come in the form of helpful answers from store assistants. Customer support can take several forms – many of which play into experiential commerce.
Let’s say you run a handmade store and host a pottery class in your shop. At the event, you guide customers through what seems to be a nice pottery appearance, how to paint it, and tips on caring for their new vase at home.
All that information is excellent customer service. You’ve won them over with your pottery knowledge, so when they want to buy a professional vase, your store is the first that comes to mind.
Increasing Foot Traffic
Raise your hand if you’ve visited an IKEA store on a rainy day. Many people visit the massive warehouses as a family outing. The home furniture designs present inspiration for shoppers to decorate their own homes – not to mention the great merchandise displays they find everywhere.
In a recent survey of European consumers, 75% of participants said that this type of inclusive shopping experience would convince them to shop in-store. The lesson: Offer it to your customers to increase foot traffic and drive in-store sales. (It’s easier to get people to buy a product when they’re already in the store.)
Creating Social Media Opportunities
Consumers often talk about their shopping experience with their friends. More importantly, they post about it on social media. The result is a cycle of experiential marketing generating word-of-mouth marketing, where previous shoppers convince their friends to come and have the same experience.
Data provided by Buffer reveals that people often share quotes and multimedia (like photos or videos) from live events on social media. This social media chatter helps create buzz around your brand and the products you are promoting at your event, allowing you to reach two audiences: people at the event and their social media friends who are sharing it.
Distinguishing from Other Stores
One of the most commonly held beliefs about retail today is that lean online merchants are swallowing the revenue of physical stores. While this may make for eye-catching headlines, it doesn’t tell the whole story.
In many parts of the world, the commercial landscape is becoming increasingly segmented. At one end of the spectrum are retailers who prioritize large, diverse inventory and low prices – a business model best exemplified by Walmart and similar low-cost chains. At the other end, there are luxury retailers who prioritize high-end goods and superior customer service. For these retailers, differentiation is the main driver for their customers.
It’s those “middle” brands – those that can’t compete on cost or luxury – that face the toughest challenges in differentiation. They are the same brands that can benefit the most from experiential commerce.
Let’s say you are looking for a new moisturizer. You have the option to visit two stores: one follows a pick-and-choose product approach, while the other provides you with an in-store skincare expert who offers you a free hand massage so you can experience how the different products blend into your skin. Which store are you more likely to visit?
The store that provides the experience is the most common answer. Seven out of ten respondents will vote with their feet and visit another store if a retailer does not provide them with an exciting shopping environment. Three-quarters of them will spend more money at an experiential commerce store.
Getting
On Direct Feedback
Unconnected events give companies the opportunity to gain immediate customer data and feedback. You won’t just be able to watch how consumers interact with your products and services, but you can also ask them questions to gain insights into current and future offerings.
Was the workshop hosted at a convenient time? Did shoppers enjoy the products that were tried? How did they find the store’s product design? Answers to all these questions help you adjust your business strategy for the days when you are not hosting events.
Similarly, in-store events give you the opportunity to collect customer information for traditional marketing campaigns post-event, such as direct mail or email.
Experiential Commerce Ideas to Try
Are you ready to start in experiential commerce? Here are five ideas to try even if you don’t have a physical store (yet).
Pop-Up Trucks
Pop-up shops have become popular in recent years, but smaller retailers may find it difficult to launch a pop-up shop on a limited budget. Opening a temporary store for 30 days can cost over $30,000, making this method effectively out of reach for smaller merchants.
A potential alternative is to launch a pop-up truck instead. Agencies like Pop-Up Mob specialize in creating custom temporary experiences for smaller retail brands.
Pop-Up Mob worked with a jewelry brand to create a pop-up truck to coincide with the Art Basel festival in Miami. The classic Volkswagen van’s golden detour featured several items from the Bittar collection and encouraged visitors to take selfies with the van between exhibitions. Products were also available for purchase from the truck.
Pop-up trucks have two major advantages over their physical store counterparts: temporality and mobility. The temporary Alexis Bittar truck was strategically parked outside the Faena Hotel in the historic Miami Beach area during the Art Basel Miami festival. This allowed the brand to capitalize on the heavy foot traffic generated by the event and attract a wide range of potential customers among the exhibitions during a festival that draws tens of thousands of people each year.
Community-Focused Events
Many retailers run events for members of their local community. You can take this idea a step further and provide a retail space for individuals who could benefit from a meeting place. This is exactly what camera and backpack company Peak Design did when it made its flagship location in San Francisco available as a co-working space for artists.
Every Wednesday from 1:00 PM to 5:30 PM, the Peak Design salon and its low-stock store become a co-working space for local photographers, artists, and other creatives. This targets 30% of city shoppers who want to see more retailers offer co-working spaces in stores.
The Peak Design co-working initiative provides a place for local artists, photographers, and creatives to talk about their work and share ideas, which can be hard to come by when working alone.
In-Store Collaboration Initiatives
For some brands, the in-store collaboration initiative can become an experiential event.
This is the approach taken by luxury accessories brand Senreve – which gets its name from the French words for “feeling” and “dream” – when it hosted a collaborative commerce event at its store in San Francisco with Aurate jewelry at the Senreve location in San Francisco.
At first glance, luxury events may seem to have little in common with some of the innovative experiential commerce examples above. However, the experience is not about the nature of the event itself, but in the format of the complementary goods sold by merchants who share a mission and brand values.
Workshops
The Work Process
You can start small by hosting personal events at your physical store location. Perhaps teach customers how to use your products or offer a workshop related to a skill pertinent to your field.
Educational events have become increasingly popular as a way for retailers to raise awareness about important issues as well as their own products.
The Fellow brand seeks to help its customers learn more about its coffee. At the main Fellow Store + Playground in San Francisco, the brand offers short presentations and tasting experiences alongside in-depth classes on advanced brewing techniques led by invited tea professionals.
These events provide customers with an educational experience that teaches them more about coffee as a commodity and introduces them to Fellow’s wide range of products.
Examples of Experiential Retail
Experiential retail can be challenging. Let’s look at six prominent brands that do it well and break down what makes their experiences effective in terms of increasing foot traffic, boosting sales, and building long-term loyalty.
LIVELY
The entire LIVELY store experience is an experience. LIVELY founder Michelle Cordeiro Grant wants every store to feel like a club: “We want women to come in and feel comfortable. They can count on us to come in here and not feel any pressure to shop.”
Part of their experiential retail strategy is fitting sessions. Customers book an appointment online and head to their scheduled time in-store where a LIVELY retail associate helps them find their bra size.
The results are remarkable, to say the least. About 30% of LIVELY’s in-store revenue comes from customers who booked a fitting session online. The average order value from these shoppers is 60-80% higher than those who walk in off the street.
gorjana
Jewelry company gorjana recognized that the atmosphere in its store contributes to the shopping experience when customers visit. Instead of filling its store with best-selling items and maximizing floor space, its founders prioritized the scent, aesthetics, and feeling someone has upon entering the store.
Co-founder Jason Griffin Riedel says, “I want to think about the woman who just wants to go shopping alone. How does she feel? What is the person who is in the store with their children? What is the person who comes in with their dog? What is the husband who doesn’t really want to be there? What is the man who walks in alone looking for a gift? Who are these little characters that exist?”
Answering all those questions helps the gorjana team design each retail store. Additionally, in-store personal stylists and free engraving are available to support those purchasing jewelry as a gift.
Manifest and Flow
Manifest and Flow sells crystals and journals to its customers. The brand launched into experiential retail through its own e-commerce store.
Owner Kate Manigold said, “We started our business during the lockdown when in-person shopping wasn’t an option.” “With heightened anxiety and many people stuck at home, we really wanted to inject more playful energy into the online shopping experience and apply experiential techniques.”
The brand created a crystal mystery machine as a way to do this. Anyone placing an online order of $20 or more receives a mystery bag from the machine.
Kate says, “We have a custom vending machine filled with bracelets and mystery crystal sets. The customer places their order online, selects their vending machine number, and we film entering that number and revealing the item from the vending machine. Then we send it to them with their mystery bag.”
It relies on
Manifest and Flow on the social media buzz about their crystal machine experience, Kate says: “We decided to open an in-store experience where customers can use the crystal machine or choose a crystal from the pink crystal cart.”
Canada Goose
Canada Goose is known for its outerwear. It specializes in winter clothing for harsh weather, worn by people who participate in winter sports or plan to vacation in a cold area.
The only problem is that customers in many locations are unable to actually try the product. They have to rely on Canada Goose’s word and hope they won’t feel cold when the coat is put to the test. At that time, they
Source: https://www.shopify.com/retail/upgrading-your-store-expert-tips-to-engineer-a-great-retail-experience
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