Experiential retail is an immersive experience offered by traditional retailers to shoppers. Pop-up stores, in-store workshops, and hosting community events are all examples of experiential retail.
What is experiential retail?
Experiential retail is the process of creating unforgettable shopping experiences for shoppers. It engages customers directly and invites them to experience your brand in-person and in real life.
As customers become increasingly selective about the brands they shop from, the in-store shopping experience must stand out from the rest. However, the shopping experience must not be just a promotional gimmick that completely ignores the commercial aspect. After all, shoppers come to discover and purchase products.
According to a study conducted by Forrester Consulting on behalf of Shopify, more than two-thirds of consumers (35%) plan to engage with brands through experiential experiences in the coming year. Therefore, it is not surprising that 40% of brands stated that offering experiential retail would be one of their priorities next year.
Benefits of experiential retail
Three out of four brand marketers rated experiential retail as “very important or somewhat important,” according to a study conducted by Crossmark. Some countries see the positive impact of experiential retail faster than others. In China, for example, 78% of major department stores added experiential elements to their stores.
Let’s take a look at the reasons why experiential retail is a priority for many merchants:
Meeting experiential shoppers
The retail landscape is constantly changing. Today’s customers not only want to buy products but are also looking for memories. They are willing to spend more money on experiences: about 76% of shoppers prefer spending money on experiences rather than products.
Experiential retail combines products and experiences to provide the best of both worlds. For example, a hair care store with a barbershop offers an experience that the younger audience is willing to spend money on, while products are still available for normal purchase.
Highlighting community and charitable issues
Quality, price, and convenience are three key elements on many consumers’ mental checklists when looking for brands to purchase from. However, there is one box that merchants often forget to think about: purpose.
Research indicates that 77% of people feel more positively about brands that make efforts to support the community. Additionally, for some generations – such as Gen Z and millennials – community is paramount. After being named “the loneliest generations” 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.
As a result, 31% of consumers would like to have experiences that make them feel belonging in the stores they visit, such as organic product fairs and book clubs. Experiential retail allows you to provide those experiences to customers who are eager to support their local community.
Building brand loyalty
It is likely that 93% of customers will make repeat purchases from companies that provide excellent customer service. However, excellent service does not just come from helping shoppers in-store. Customer support can take many forms – many of which relate to experiential retail.
Suppose you run a handmade goods store and host pottery classes in your store. At the event, you guide customers about how to work with good clay, how to paint it, and tips for caring for their new vase at home.
All that information constitutes excellent customer service. You’ve won them over with your pottery knowledge, so when they want to purchase a professional vase, your store will be top-of-mind.
IncreasingFoot Traffic
Who hasn’t visited an IKEA store on a rainy day? Many people visit these massive warehouses as a family outing. The home furniture designs provide inspiration for shoppers to style their own homes – along with fantastic merchandise displays everywhere.
In a recent survey of European consumers, 75% of participants said that this type of immersive retail experience would convince them to shop in-store. The lesson: Offer your customers similar experiences to increase foot traffic and boost in-store sales. (It’s easier to get people to buy a product when they’re already in the store.)
Creating Opportunities for Social Interaction
Consumers often talk about their shopping experiences with friends. More importantly, they share their experiences on social media. The result is a cycle of experiential marketing that drives marketing through word-of-mouth, as 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 conversation helps create buzz around your brand and the products you’re promoting at the event, helping you reach two audiences: the people at the event and their social media friends sharing it.
Differentiating from Other Stores
One of the most common beliefs about retail today is that lean e-commerce merchants are eating into the revenues of traditional stores. While this may be interesting, it doesn’t tell the full story.
In many parts of the world, the retail landscape is becoming increasingly polarized. At one end of the spectrum are the merchants who prioritize large, diverse inventory and low prices – a business model best exemplified by low-cost retail chains like Walmart. At the other end are luxury merchants who prioritize high-end goods and excellent customer service. For these merchants, differentiation is the main driver for their customers.
It is those “in-between” brands – those that cannot compete on cost or luxury – that face the toughest challenges in differentiation. They are also the same brands that can benefit the most from experiential commerce.
Experiential Commerce Ideas to Try
Mobile Trucks
Popup stores have become popular in recent years, but smaller merchants may find it difficult to launch a temporary store on a limited budget. Instead, they could launch a mobile truck. Agencies like Pop-Up Mob specialize in creating temporary experiences tailored to small retail brands.
Pop-Up Mob worked with a jewelry brand to create a mobile truck to coincide with the Art Basel festival in Miami. The golden Volkswagen van featured a number of items from the Bittar collection and encouraged visitors to take selfies with the van between shows. The products were also available for purchase from the truck.
Mobile trucks have significant advantages over their fixed-store counterparts in terms of time and mobility. The Alexis Bittar truck was strategically placed outside the Faena Hotel in the historic Miami Beach area during the Art Basel Miami festival. This allowed the brand to capitalize on the high foot traffic generated by the event and attract a wide range of potential customers among the exhibits during the festival that draws tens of thousands of people each year.
Community-Oriented Events
Many merchants host events for local community members. You can take this idea a step further and provide commercial space for individuals who may benefit from a place to gather. That’s exactly what Peak Design did with its camera and backpack store when it made its headquarters in San Francisco available as a co-working space for artists.
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Every Wednesday from 1:00 PM to 5:30 PM, the Peak Design showroom and the low stock store transform into a co-working space for local photographers, artists, and other creatives. This targets 30% of city shoppers who wish to see more retailers providing co-working spaces within the store.
The Peak Design co-working initiative provides a space for artists and photographers in the area, many of whom may become future customers of Peak Design. It offers a place for creatives to discuss their work and exchange ideas, which can be difficult in isolation.
In-Store Collaboration Initiatives
For some brands, the in-store collaboration initiative can become an experiential event even if it seems ordinary. This is the approach taken by Senreve, the luxury accessories brand – named after the French words for “feeling” and “dream” – when it hosted a retail event in its San Francisco store in collaboration with the luxury jewelry maker Aurate.
At first glance, the sub-events may not seem highly relevant to some of the innovative examples of experiential commerce above. However, the experience is not inherent to the event itself but to the arrangement of complementary goods sold by retailers sharing a common mission and brand values.
Hands-On Workshops
You can start small by hosting in-store events at your location. For example, teach customers how to use your products or offer a workshop focusing on a skill related 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 understand more about its coffee. At the main Fellow Store + Playground in San Francisco, the brand offers short demonstrations and tasting experiences, as well as in-depth classes on advanced brewing techniques led by invited tea experts.
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 Commerce
LIVELY
The entire store experience at the LIVELY lingerie store is unique. The brand’s founder, Michelle Cordero Grant, wants every store to feel like a club: “We want women to come in and feel comfortable. They can rely on us to come in here and not feel any pressure to shop.”
Part of her experiential commerce strategy is the fitting sessions. Customers book an appointment online and attend their session in-store where a LIVELY retail associate helps them find their bra size.
The results are impressive, 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 into the store.
gorjana
The jewelry company gorjana knows that the atmosphere in its store contributes to the shopping experience when visitors come in. Instead of filling the store with best-selling items and maximizing floor space, its founders prioritized the smell, aesthetics, and the feeling a person experiences when entering the store.
Jason Griffin Reidel, the co-founder, says, “I want to think about the woman who just wants to go and shop alone. How does she feel? What is the feeling of the person who is there with their kids? What is the person who walks in with their dog? What is the partner who enters who doesn’t really want to be there? What is the person who walks in alone looking for a gift? Who are all these little characters that are happening?”
Manifest
and Flow
Manifest and Flow sells crystals and magazines to its customers. The brand experimented with experiential commerce through its own e-commerce retail store.
Kate Manigold, co-owner, said: “We started our business during the shutdown when in-person shopping wasn’t an option. With increased stress and many people living at home, we wanted to add more fun energy to the online shopping experience and integrate experiential techniques into the mix.”
The brand created a crystal mystery machine as a way to do this. Anyone who places an online order of over $20 receives a mystery bag from the machine.
Kate says: “We have an automated vending machine for customized crystals equipped with ATMs. The customer places an order online, selects the machine number they want, and then we film the input of the selected number and reveal the item from the machine. We then ship it to them with a mystery bag.”
Canada Goose
The clothing brand Canada Goose is known for its outerwear. It specializes in winter clothing for extreme weather and is worn by people participating in winter sports or planning a trip to a cold region.
The only problem? Customers in many locations are unable to truly test the product. They have to rely on Canada Goose’s word and pray that they won’t feel cold when they try on the coat. By that time, they’re already behind. Either you’re freezing in the Arctic or past the return window.
To solve this issue for its customers, Canada Goose created a cold room in five of its retail stores. Shoppers can wear a coat and stand in a refrigerated room set to a temperature of -27 degrees Fahrenheit. The benefit of the product is clear; anyone about to go to a cold area knows they should get a Canada Goose coat to take with them.
Tecovas
Not all experiential commerce strategies need to be extravagant. Shoe retailer Tecovas takes a straightforward yet effective approach by offering services in its store in Austin, Texas.
Shoppers can enjoy beverages, shoe shining, and expert consulting tips during their visit. There’s also a selection of exclusive products that shoppers can only find in-store. You’d have a hard time getting this experience from other shoe stores.
Nike Rise
The Nike sports brand is no stranger to experiential commerce. Its new retail concept, Nike Rise, is the store of the future.
The flagship store in Guangzhou, China, has been transformed into a haven for Nike fans, featuring the following: a Nike By You bar for customizing products with customers’ favorite sports team logos. Weekly games and sports events for members of the Nike Running Club app. Workshops hosted by sports influencers and Nike athletes. In-store shoe fitting experiences using Nike Fit technology to find the perfect shoe size.
The Future of Experiential Commerce
Augmented Reality
Retailers can rely on emerging technologies to deliver the experiences shoppers are looking for. Augmented reality (AR) is an example of this. It works by overlaying graphics over a live stream of something – whether it’s your store, the customer’s body, or their home.
Data suggests that 71% of people would shop at retailers more if this type of augmented reality technology were offered. And 40% would be willing to pay more for a product if they could try it out through augmented reality.
As augmented reality becomes more widespread, experiential commerce has already kicked into high gear. I can imagine customers being able to project a hologram in their homes to see the product in its full dimensions. It’s particularly beneficial for the home decor sector.
Experiential Offers
As part of a study conducted by Forrester Consulting on behalf of Shopify, we asked brands about the areas they are investing in to improve in-store shopping experiences over the next 12 months. The most common response (46%) was experiential offers.
Experiential offers allow customers to come in and experience the brand and product, while enabling them to complete purchases easily online. Items they are interested in at the store can be sent to them via email while they are in the store for later purchase.
Merchants can also use QR codes. Shoppers can visit the store, learn more about a product, and scan a QR code that takes them to the product page on the online retail store. They can complete the purchase on their smartphones with just a few clicks.
Source: https://www.shopify.com/retail/experiential-retail
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