Retail as marketing: redefining the retail experience

by Kristy Stromberg, CMO

Originally posted in Forbes as part of the Forbes Communications Council

In the pre-digital era, the relationship between brick-and-mortar retail stores and their customers was largely transactional— places to fulfill supply and demand. Yet as online commerce continues to grow exponentially, the role of the retail store is shifting from purely pragmatic to more experiential. Moving forward, the key to survival for retail stores may rely on their ability to act as a living showcase for products and brands.

Take Coach, for instance, which has made some radical yet effective changes in its approach. Last year, the company pulled its line of handbags and accessories out of 25% of its North American department store locations — choosing instead to focus energies on its own stores. Chief among those stores is the new Coach flagship location in New York, which elevates the ordinary shopping experience with special touches like a monogramming station (replete with emojis), a 12-foot dinosaur fashioned out of Coach leather pieces, and Made to Order Rogue (which gives shoppers the ability to create a bespoke Rogue bag).

Tesla and Nike are also among the companies leading the charge to create new associations with the traditional retail experience. For luxury car manufacturer Tesla, the dealership concept has made way for direct-to-consumer stores and galleries. Sleek interactive displays and on-site demos educate shoppers about the brand’s electric vehicles, while design studios enable would-be Tesla owners to configure their desired model (which they can then share on social media). As Automotive News put it, “The idea is less to sell a product on the spot than to let shoppers spend time with the brand.” It seems to be working: Reservations for Tesla’s Model 3 are reported at around 400,000.

As for Nike, its new concept store in Soho adopts an omnichannel-style approach to marry the company’s virtual and physical offerings. The goal? To offer dynamic tools for personalized performance. Among the in-store features: an instant personalization studio with laser engraving and custom printing capabilities and a fitting room with digital checkout and adaptive lighting (to mimic the feel of a yoga studio or evening run). Numerous “trial zones” offer inviting spaces for shoppers to test shoes, whether on a synthetic turf soccer field or on a basketball half court. For instance, the Nike+ Running Trial Zone transforms the treadmill into a 90-second run in Central Park or the West Side Highway via digital screen (fueled by real-time performance feedback).

The Shifting Role Of Stores

This new breed of experiential retail signals the movement toward stores as vehicles for marketing rather than just straightforward sales. Though e-commerce provides instant gratification through savvy search engines and easy one-click buying, there is still no replacement for the sensory touchpoint provided by a brick-and-mortar location where customers can touch, feel and evaluate the product in person. Retailers that recognize this distinction will certainly have an edge in the rapidly changing marketplace, in which the number of distressed retailers has tripled since the Great Recession, according to Moody’s Investor Service.

The proof? Highly successful online retailers such as Amazon, Fabletics and Warby Parker have all ventured beyond the digital landscape to open physical stores in recent years. Though it may seem counterintuitive in today’s rocky retail climate, these retailers are finding real value in reaching customers the old-fashioned way. According to Amazon’s Chief Financial Officer Brian Olsavsky, the retailer’s burgeoning chain of bookstores is “another way [for the company] to reach the customer and test what resonates with them.”

No matter how long a retailer has been in the brick-and-mortar game, its longevity will depend on not only its ability to create enhanced experiences for customers but its unique take on how to keep them coming back. One shining example is Nordstrom, which is slated to open 17 new stores this year (amid a landslide of closures for other department stores). The retailer has long been hailed for excellent customer service, from hassle-free returns to hand-delivering items to homes. Whole Foods has also succeeded in this vein, going to great lengths to ensure an inviting environment with colorful displays and carefully-curated playlists.

This “feel-good” takeaway is yet another aspect that is largely exclusive to the real-life shopping realm, and it goes hand-in-hand with shaping the new face of retail. Now is the vital time for retailers to embrace these realizations, as many shoppers still prefer buying from physical stores over shopping online — and forward-thinking, experientially-minded retailers have a shot at keeping it that way.