Experiential retail is an immersive experience created by retailers in physical stores for shoppers. Examples of experiential retail include pop-up shops, in-store masterclasses, and community event hosting.
What is Experiential Retail?
Experiential retail is the process of creating memorable shopping experiences for consumers. It directly engages customers and invites them to experience your brand in real life and in person.
As customer selectivity in choosing brands to shop from increases, store experience must stand out from the rest. However, the store experience shouldn’t be superficial and completely neglect 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, more than two-thirds of consumers (35%) plan to engage with brands through experiential moments in the coming year. Unsurprisingly, 40% of brands said that providing experiential retail will be a top priority for them in the upcoming year.
Benefits of Experiential Retail
Three-quarters of brand marketers rated the retail experience “very important or somewhat important,” according to a study by Crossmark. Some retailers in certain countries are seeing the positive impact of experiential retail more quickly than others. In China, for example, 78% of department stores have added experiential elements to their stores.
Let’s take a look at the reasons why experiential retail is on the priority list for many retailers:
Meeting the Experience Purchase
The retail landscape is always changing. Customers today don’t just want to buy products; they are looking for memories. They are willing to spend more money on them: approximately 76% of shoppers prefer to spend money on experiences rather than products.
Experiential retail combines products and experiences for the best of both worlds. For instance, a hair care store with a barber shop provides an experience that the younger audience wants to shell out money for, while having the products available for purchase naturally.
Highlighting Community and Charitable Causes
Quality, price, and convenience are three items on the mental checklist for many consumers when searching for brands to purchase from. However, there is 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 essential. After being named the “most lonely generation” after growing up amid a digital revolution, half of Gen Z consumers want brands to have a social impact that they can be a part of.
Building Brand Loyalty
It’s likely that 93% of customers make repeat purchases with companies that offer excellent customer service. But this doesn’t just come in the form of helpful answers from store assistants. Customer support can take multiple forms – many of which play a role in experiential retail.
Let’s say you run a handmade goods store and host a pottery class in your store. At the event, you guide customers on how to make good pottery, how to paint it, and tips for 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 top of mind.
Increasing Foot Traffic
How many of you have visited an IKEA store on a rainy day? A lot of people visit these massive warehouses as a family outing. The home furniture designs inspire shoppers to decorate their own homes – along with great merchandise displays everywhere.
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Recent consumer survey conducted in Europe indicates that 75% of participants said this type of immersive retail experience would persuade them to shop in-store. The lesson: offer it to your customers to increase foot traffic and boost in-store sales. (It’s easier to get people to buy a product when they are already in the store.)
Creating Social Connection Opportunities
Consumers often discuss their shopping experience with friends. More importantly, they share it on social media. The result is a cycle of experiential marketing that drives word-of-mouth marketing, where past shoppers convince their friends to come and have the same experience.
Experiential Retail Ideas
Ready to get started with experiential retail? Here are five experiential ideas to try even if you don’t currently have a physical store:
Mobile Trucks
Pop-up shops have become popular in recent years, but smaller retailers may struggle to launch a pop-up shop on a limited budget. Instead, you can launch a mobile truck. Agencies like Pop-Up Mob specialize in creating customized experiences for smaller retail brands.
Community-Focused Events
Many retailers organize events for local community members. You can take this idea a step further and provide retail space for individuals who may benefit from a place to meet. This is exactly what camera and backpack company Peak Design did when they made their headquarters in San Francisco available as a co-working space for artists.
In-Store Collaboration Initiatives
For some brands, an in-store collaboration initiative can become an experiential opportunity. This is the approach that luxury accessory brand Senreve took when it hosted an in-store event with luxury jewelry maker Aurate at Senreve’s location in San Francisco.
Hands-On Workshops
You can start small by hosting personal events at your store location. You might teach customers how to use your products or provide a skill-related workshop within your niche.
Examples of Experiential Retail
Let’s take a look at six standout brands that excel at this, and analyze 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 intentional. Founder Michelle Cordeiro Grant wants every store to feel like a club: “We want women to come in and feel at ease. They can count on us to come in here and not feel any pressure to shop.”
gorjana
Jewelry brand gorjana knows that the atmosphere in their store contributes to the shoppers’ experience when they visit. Rather than filling the store with best-selling items and maximizing floor space, the founders prioritize the scent, aesthetic, and feel of the space when a person walks in.
Manifest and Flow
Manifest and Flow sells crystals and journals to their customers. The brand kicked off its experiential retail journey through its e-commerce store. They created a mystical crystal machine as a way to do this.
Canada Goose
Clothing brand Canada Goose is known for its outerwear. It specializes in winter clothing for harsh weather, worn by those engaging in winter sports or planning a vacation in a cold area.
Tecovas
Not all experiential retail strategies need to be extravagant. Shoe retailer Tecovas follows a simple yet effective approach by offering services in their store in Austin, Texas.
Nike Rise
Nike is no stranger to experiential retail. Its new retail concept, Nike Rise, is the store of the future.
The Future of Experiential Retail
The future of experiential retail is hard to predict. However, trends and changes in consumer behavior suggest that experiential retail is here to stay – just with some changes.
Reality
The Enhancer
Traders can rely on emerging technologies to provide the experiences shoppers are looking for. Augmented Reality (AR) is an example of this. It works by overlaying graphics on a live broadcast of something – whether that’s your store, the customer’s body, or their home.
Experience Stores
Virtual fitting rooms are the best example of how brands use augmented reality for experiential marketing. Stores like Charlotte Tilbury and Ralph Lauren feature smart mirrors in their shops. Customers can select an item from the store and take it to the virtual fitting room to see how the product looks on their own body – without changing clothes.
Display Experience
It allows customers to enter and experience the brand and product, while enabling them to easily complete purchases online. Items they are interested in at the store can be emailed to them to finalize the purchase later.
Unifying Data In-Store and Online
Personalization is at the heart of many great shopping experiences. Shopify POS offers customer profiles that unify purchase history in-store and online to help you recommend products, enhance customer retention marketing, and increase customer lifetime value.
Store Employee Training is Essential
No matter what type of experience you provide for shoppers in the store, make sure to train your sales staff and know how to handle the event. Data indicates that 57% of brands view “experiential commerce format” as a major challenge for their physical stores in 2022. Additionally, 44% plan to increase their employees’ interaction time with customers to improve the store experience.
Impact of COVID-19
We cannot mention the impact of COVID-19 on experiential commerce events. At the beginning of 2020, physical stores were closed. While half of shoppers plan to return to in-store shopping as soon as restrictions are lifted in their local area, people still remain concerned about their health and safety.
What enhances people’s confidence in shopping in-store post-pandemic are safety protocols in stores such as mandatory mask-wearing, limiting the number of people in the store, and regularly cleaning the store.
Creating Unique Experiences in Your Store
Experiential commerce is not a passing fad – it is the future of how, where, and when we shop. Today’s consumers have higher expectations than ever, and experiential commerce is quickly becoming the new standard as it provides the experience shoppers are willing to spend money on.
In addition to being an emerging and fun marketing method, it helps you engage with existing and potential customers, making you step out from behind the screen. Consider it a way to build lasting relationships that go beyond the initial experience.
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