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Retailers ask: What is experiential retail?

Experiential retail is oft-misunderstood. It’s not about adding high-tech enhancements like touchscreen computers or voice-activated artificial intelligence to your store. Experiential retail is what many shoppers desire—a seamless, individualized experience that is informative, easy to navigate, and engaging. 

Why Is Experiential Retail Important?

People tend to value experiences more than things. This is one impetus for the rise in experiential retail. Not all customers want to enter your store to simply purchase a product and leave; this can be done from the comfort of their home. Instead, customers desire an experience while shopping that will encourage them to return. 

For years, it’s been said that brands would need to develop innovative, immersive, tech-savvy ways to entice consumers to shop brick-and-mortar. By leveraging experiential retail to create a more immersive retail experience, retailers can take advantage of the increased in-store interaction which, in turn, leads to increased sales.  

Research indicates that experiential retail is helping retailers in several ways:

  • 49% of surveyed shoppers say they go to a physical store for entertainment or food options
  • 90 to 95 in 100 shoppers leave an experiential pop-up with a more favorable brand impression
  • 55% of retail executives plan to spend money on in-store experiences in 2020
  • 64% of shoppers say their in-store purchases are driven by exclusive discounts from an app 
  • Other factors driving purchases include: food and beverage offerings (30%), a more personalized shopping experience (18%), live product demos (18%), special events and entertainment (17%), family and kid activities (16%), smart dressing rooms (15%), virtual reality experiences (13%), and a better mobile experience (12%) 

Experiential retail offers brands a way to connect with consumers on a deeper level, building affinity, awareness, and loyalty

Components of Experiential Retail

When it comes to offering experiential retail, brands must be sure to consider the following:

  • The experiential concept must serve a purpose. Nike’s SoHo store doesn’t place basketball courts and soccer fields in the store for aesthetics. While these additions do increase one’s childlike wonder, they also invite shoe shoppers to try on sport-specific shoes and take them for a “test-drive” to find precisely the right model. In Casper stores, shoppers can test mattresses inside personal bungalows. Their message is: “This is not your average mattress store. Test out the beds in a private, pressure-free space at a location near you.”
  • Make the best use of your space. Experiential retail doesn’t have to equate with offering experiences throughout the store—especially if you’re pressed for space. In some cases, retailers simply use space to convey important, helpful messages. For instance, The North Face took a museum-style approach, encasing their Himalayan Snow Suits, along with a plaque detailing its history. Another example is how Dyson’s concept store offers diagrams, product demos, and detailed information about how to use their products. 
  • Be accessible and discoverable. Experience doesn’t replace good old-fashioned customer service. As soon as each customer walks through the door, they should feel welcomed and guided, without feeling cornered. A study by Tulip Retail found that 83% of customers think they’re more knowledgeable about products than store associates, yet 79% say it’s important to interact with store associates who know what they’re talking about. Retailers lose at least 6% in potential sales due to understaffing, according to the Massachusetts Institute of Technology’s Sloan School of Management. 

Examples of Effective Experiential Retail

The majority of stores have fallen into complacency, unable to take the next step. Experiential retail often finds its home in big city flagship stores and fleeting pop-ups. In a city like New York City or Los Angeles, competition is high. While many of these examples involve hefty investments and ground-level planning, retailers can decide on concepts that work best from them.

  • effective experiential retail The Museum of Ice Cream started as an NYC pop-up, but gained its first permanent home in San Francisco in 2017. The shop features a rock-candy cave, a maze of rooms, a unicorn, candy-themed exhibits, and a swimming pool of rainbow sprinkles.
  • The American Girl flagship store at Rockefeller Plaza in New York features an American Girl Salon, where girls and their dolls can receive matching hairstyles, manicures, and piercings. At the Create Your Own Design Studio, amateur designers can choose from over one million combinations to customize a new doll. 
  • Calvin Klein entered a partnership with Amazon where their pop-up shops came equipped with Amazon technology, giving customers the ability to scan items and purchase directly. The dressing rooms are equipped with Amazon Echoes to play music, and pink benches outfitted with charging ports. Shoppers receive complimentary embroidering on loungewear before they leave.
  • L’Occitane opened a Fifth Avenue concept store, which changes theme every three months. Experiential activities include photoshoots with provencal bikes and backdrops, life-size advent calendars, and virtual reality balloon rides through south France while receiving a free hand massage with store products.
  • At the Farfetch store in London, the luxury clothing retailer uses an app to welcome users to the store and provide a virtual shopping assistant experience. RFID-enabled clothing racks detect products that interest shoppers, automatically adding them to an online wishlist. Touch-screen mirrors let customers request alternate sizes or pay right then and there in the dressing room.

Experiential Retail, Simply Done

Experiential retail doesn’t have to be extreme. As Retail Wire sums up the oft-overhyped sensationalism, a brand simply needs “the right products, stocked in a store people want to visit, with prices that fit expectations, and customer service that wraps it all up.” Brands shouldn’t forget the purpose of retail—to connect consumers with products. Experiences should complement the overall mission, not detract from it.  

Experiences should complement the overall mission, not detract from it.  

Bomb Pop was able to capitalize on the experiential marketing trend by partnering with Shopkick to drive consumer engagement at home and in supermarkets. Users were sent branded in-app content geared toward encouraging them to add Bomb Pops to their grocery lists. Upon arrival at the store, shoppers were greeted and rewarded with a message from Bomb Pop. Shopkickers who sought out, scanned, and purchased Bomb Pop products received additional rewards. Bomb Pop received over 23 million impressions over the two-month campaign. According to post-scan surveys, 44% of shoppers first became aware of the Bomb Pop brand through Shopkick, and 68% of purchasers were not planning to purchase Bomb Pop products prior to interacting with the app.

Shopkick helps our partners learn more about incorporating experiential retail concepts with a fun, easy-to-use app that rewards shoppers for engaging with your brand down the aisles. To see how our campaigns have improved the results of our partners, review a few of our success stories.  

Image courtesy of Hayk_Shalunts