Experiential retail trends might be the key to breathing some life back into brick-and-mortar stores. In the first six months of 2019 alone, U.S. retail store closures exceeded totals for the previous year—and are estimated to reach 12,000 by the end of 2019. eCommerce and social media are often cited as the forces behind this monumental change. Most of us assume that retail stores are simply failing to keep up with inevitable shifts in consumer behavior.
It’s true, today’s customers are choosing to buy outside of the traditional retail environment more often. But there’s a bigger trend at play: people want to invest in experiences, not just goods.
Millennials are leading the drive toward experiential purchases, reportedly spending more money on experience gifts rather than material items. This demographic is inspiring retailers across the United States to create original, interactive, and memorable experiences in stores. Experiential retail trends are changing the game for mass-market retailers and transforming what it means to attract customers in today’s world.
The Rise of Experiential Retail
New York City has won the metaphorical experiential retail trophy for more than ten years now. When Apple first opened its glass cube location in 2006, the company attracted tourists from all over the globe who simply wanted to step inside the iconic store. The cube provided a fantastic photo opportunity and a massive “wow” moment for Apple customers, who fell even more in love with the ubiquitous brand after visiting the viral location.
Since then, nearly every major retailer in Manhattan has built out an immersive and interactive concept store. But experiential retail isn’t just for Fifth Avenue. Store locations in Austin, Orlando, Phoenix, and Oklahoma City alike are rolling out innovative customer engagement ideas, and major household-name retailers are following suit.
For example, REI brings customers in the door with outdoor adventure and educational programs. Lululemon offers rooftop yoga classes and calming meditation studios. With one click, you can sign up for cooking classes at Whole Foods or sewing lessons at Joann Fabrics. Bucee’s rose to fame across the United States just for building Texas-sized gas stations that tourists flock to in droves.
It’s no surprise that Forbes named experiential retail one of the top 5 trends that will redefine retail in 2019. Experiential marketing has exploded across both mainstream and indie brand spaces alike.
3 Experiential Retail Trends and Why They Work
Experiential retail stores work for the same reason that pop-up art installations work. They’re unexpected, immersive, relevant, and—above all else—shareable. Not all store concepts rise to meet these criteria, and some end up feeling forced or boring. The following three trends have emerged on the experiential retail scene and have been proven to strike that perfect balance. Here’s how they work:
- Mixed-Use Retail Spaces. Think House of Vans, London—a retail space that includes a food court, event center, shopping spaces, and the only indoor skate park in the city that also happens to be completely free and open to the public. ‘Mixed-use’ means erecting bookstores that are also pubs and banks that are also cafes (thanks to Capital One for that surprising innovation). This trend works because it turns retail spaces into new and unexpected community-building spaces. Customers don’t feel pressured to open their wallets when they walk through the door. Mixed-use spaces build rapport with visitors and add value to their lives, inspiring them to reciprocate in a way that feels natural and organic.
- Education + Entertainment. Millennials are spending the majority of their money on experiences, and retailers are responding with services and products that are perfectly packaged for that purpose. Stores are becoming the prime location to take classes on everything from outdoor survival to gourmet cooking—and all of the needed supplies are offered at a student discount from the stores themselves. It’s an effective way to reach customers and get eyes on your best-selling products while building brand affinity.
- Insta-Worthy Hotspots. If you want people to talk about your store, give them spaces that beg to be photographed. Experiential store concepts from Anthropologie and L’Occitane offer seasonally-themed photo shoots that are perfect post-brunch activities with friends. Casper and Samsung built miniature houses and apartments so in-store customers can test their products in a perfectly-staged (and Instagram-worthy) setting. Photo hotspots, when designed well and executed naturally, give your company all the marketing benefits of user-generated content.
How to Utilize Experiential Retail Trends in Your Own Space
Between technological enhancements, out-of-the-box decor, and overall real estate, experiential retail installments aren’t exactly cheap. It cost Nike and Adidas to install basketball courts and turf soccer fields in their flagship stores. But you don’t have to throw money at your stores to incorporate meaningful experiential elements.
The following steps will set you up for success with experiential retail, so you can be sure that whichever elements you do invest in come with a significant ROI:
Step 1: Reframe the way you view customer conversion. Stores are no longer places where people come to buy things. Customers coming in “just to look” are more than welcomed—they’re celebrated. You need to completely reframe the way you expect customers to behave in your store, and train talented staff to facilitate a great experience for each individual visitor. Today, engagement looks more like snapping a selfie than checking out at a register. It’s not just about one-time conversion anymore. Experiential retail is about creating hard-earned customer loyalty, one memory at a time.
Today, engagement looks more like snapping a selfie than checking out at a register.
Step 2: Use data to differentiate effectively. You certainly don’t need to outfit your entire retail fleet with experiential marketing in order to increase buzz around your brand. Identify a few select stores that already see high customer engagement and update those locations with exciting new features. You’ll see a much higher return by relying on existing conversion data and differentiating only your best stores.
Step 3: Start small and scale up. Experiential marketing 101: you don’t need to install 9-foot screens, updating your smart beacons will have the same effect on sales. Start by hosting an Insta-worthy pop-up event for loyalty members or incorporating an interactive shopping app like Shopkick into your marketing mix. Your goal is to create meaningful store experiences for a growing community of customers. If you see an increase in incremental foot traffic over time, you know you’re on the right track.
Live Up to Your Potential
We don’t see retail stores going away anytime soon. Experiential retail trends and other innovative adaptations are keeping the brick-and-mortar store alive. As consumer behaviors shift, stores are taking on new roles as community-builders, entertainment-givers, and curiosity-drivers. The truth is, we all need incentives to interact in the real world in the isolating age of social media. Immersive store concepts put retailers at the forefront of that cultural shift. With a bit of creativity, you can transform your stores into factories for engagement, excitement, and loyalty.
Shopkick is a consumer rewards app that helps bridge the gap between traditional marketing and the experiential retail trends of tomorrow. Our partners interact with customers through an engaging and rewarding interface that gamifies the shopping experience and deepens consumer loyalty. Contact us to learn how to use an app like Shopkick to give your visitors an experience they’ll enjoy again and again.
Image courtesy of Songquan Deng