In a world where online shopping has become the norm, the role of brick-and-mortar retail stores is undergoing a big transformation here at Future of Retail X we dive into ‘The Rise of Experimental Stores’.
With store closures during lockdown, retailers had to quickly shift everything to digital channels and then post-covid had to work to pull customers back to in-person shopping. And it’s paid off. Online shoppers have fallen back in love with the high-street. Online clothes retailers such as ASOS.com and Boohoo Group PLC have seen their shares plummet, while those with bricks-and-mortar stores such as Marks and Spencer have rebounded post-lockdown. Next has also recently seen the strongest growth in sales via their #retail stores rather than online. But retailers have had to think outside the box when thinking of ways to lure shoppers back to stores. The rise of experiential retail stores marks a shift in how we think about shopping, as consumers seek unique experiences that blend commerce and entertainment..
Creating Immersive Environments
One of the pillars of experiential retail is the creation of immersive environments. These stores are not just places to buy things; they are destinations where customers can immerse themselves in a brand’s story. From interactive displays to live demonstrations, experiential stores create a memorable journey for shoppers and create hype which in turn increases footfall. Flannels last year launched a Renaissance pop-up in three of their stores for the launch of Beyonce’s concert film, with exclusive installations and apparel. There has also been a growth of pop-up stores for brands without their own standalone stores who want to offer this experience. Huda Beauty ran an immersive retail experience pop-up store in Covent Garden, London, for the launch of a new product range. In order to encourage as much social media activity and engagement as possible, visitors could sit on a throne that Huda used in her launch material and post it on social media.
Building Community and Connection
Experiential retail goes beyond selling products; it’s about building a community. There is a rise in stores hosting events, workshops, and classes, and turning their retail spaces into hubs of social activity. Gymshark opened their first physical store last year, on London’s Regent St, and offers fitness classes and exclusive talks within the store. By fostering a sense of belonging and connection, brands can forge deeper relationships with their customers, turning them into loyal advocates.
Technology as an Enabler
Technology plays a crucial role in experiential retail. Augmented reality (AR) and virtual reality (VR) technologies are starting to be introduced into the physical store environment. PUMA Group recently teamed up with Meta and its Quest 3 mixed reality headset to enable its new virtual workout class experience. The physical gym, inside a Puma store in Berlin, attracted 160 booked appointments and long queues of customers eager to experience using the Meta Quest headset.
Modern service features can also enhance the customer experience. H&M recently unveiled a new innovative store in New York equipped with mobile checkout options, smart mirrors in fitting rooms that provide personalised recommendations, and the convenience of picking up online orders from in-store lockers.
Adapting to Changing Consumer Expectations
As in-store shopping continues to grow, we’ll see more store openings this year (for instance UNIQLO plans to open 20 new stores in the US this year) and consumers will be researching online and purchasing offline. This will make the digital experience even more important, as almost every shopping experience will become a blended one, with multiple online and offline touchpoints. Many retailers already offer seamless omnichannel experiences, allowing customers to research online and make purchases in-store, or vice versa. Click-and-collect services and same-day delivery cater to the needs of today’s on-the-go consumer. M&S last year saw their online clothing and home sales increase by 4.8% year on year, driven by a 20% growth in click and collect sales. Ikea also saw their full-year sales uplift by 12% in 2023 due to a growth in click-and-collect orders.
The Business Impact
For businesses, embracing experiential retail is not just about creating a buzz – it’s a strategic move with tangible benefits. These stores often generate higher levels of footfall and longer times spent in the store, leading to increased sales. Also the emotional connection forged through experiences can lead to brand loyalty and repeat business. JD Sports Fashion recognised the opportunity to build loyalty via their stores with the rollout of their JD STATUS loyalty app last year, which can be used in-store to give shoppers cashback on purchases, in order to encourage more omnichannel shopping.
Looking Ahead
The rise of these experiential stores signals a new era in retail. Building a relationship between a brand and a customer is important, and physical stores offer the opportunity to do this in a way that digital experiences can’t compete with. The shift to experiential retail is not without its challenges. It requires significant investment in both technology and store design. However as consumers continue to seek meaningful connections in a digital world, experiential retail is a great way to meet this demand and encourage more omnichannel shoppers. Brands that successfully navigate this shift stand to gain a competitive edge in a crowded market.
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