As Ecommerce Expands, Brick-and-Mortar Retail Focuses on the Experience

BY: ZACH HEAD

JULY 20, 2017

Outfitted with food trucks, a teepee with soft cushions, and a stage, Urban Outfitters (OU) recently extended into experiential retail and created a lifestyle brand known as Space 24 Twenty. The location is built to attract community events ranging from live music to candlelight yoga. UO sandwiched the entrance to its expansive courtyard with two storefronts, separating men and women’s clothes. Food park patrons can purchase clothing or knick knacks from the storefronts, but—as UO hopes—the patron may also create a distinct association between UO, the brand, and urban outings, the lifestyle.
EXPERIENTIAL RETAIL GROWTH

Experiential retail is the art of creating a personalized, often social, experience within the physical spaces of the store. As the barriers between eCommerce and brick-and-mortar have blurred, the experience of going to the store has changed as well. Now, instead of asking an associate, customers can google “best budget tv reviews” while shopping. Brands have subsequently discovered new ways to bring customers in store and create lasting relationships, rather than simply focusing on providing product information. When brands successfully integrate experiential retail, they create a symbiotic relationship between in-store shopping, online information gathering, and even online shopping.

There’s real value to establishing and leveraging this symbiosis. From Synchrony Financial’s research, 77% of customers are more loyal to brands that offer an experience, while more than 50% of shoppers say they would pay more when they value the shopping experience. A shift toward experience may also become necessary for many retailers as the shopping climate worsens for brick-and-mortar. In 2016, 2,056 stores closed in the United States and 2017 could see as many as 8,600 stores close. With the pricey overhead of many retail locations and changing consumer preferences, the brands that have innovated within their physical spaces are often the ones excelling.

77% of customers are more loyal to brands that offer an experience, while more than 50% of shoppers say they would pay more when they value the shopping experience.”
WHAT DOES EXPERIENTIAL RETAIL LOOK LIKE?

Space 24 Twenty isn’t the only noteworthy flagship experience location. A PGA Tour Superstore opened in Houston in 2016, offering lessons, an indoor driving range, and summer camps for the kids. Lowe’s also provides a VR experience known as “Holoroom How To” in three of its stores. The interactive experience offers basic DIY skill tutorials such as tiling a shower.

Experiential retail is not limited to outside-of-the-box, innovative technologies, either. It can be created simply through store presentation. Take Anthropologie, a cousin of Urban Outfitters. It’s carefully cultivated image includes a branded scent (which you can purchase there, too), non-traditional presentation of products, and a strict attention of detail. In fact, stores require furniture and racks to be placed at 35 to 40 degree angles to create a comforting symmetry.

There are innumerable ways to create a branded experience. Regardless of method, it’s clear companies should consider how they can leverage their brand to improve the brick-and-mortar retail experience. As brands explore what experiential retail means for their future, here are three rules of thumb to remember:

  1. Be Authentic. Innovative technologies, such as VR and AI, won’t be successful long-term if they are used to simply create an image of innovation rather than a reality. A relevant, branded experience, instead, leverages these technologies to show a consumer a new way to interact with the brand, creating measurable value.
  2. Understand your brand. Experiential retail has broad applications, but it is important to understand how the experience relates to a specific brand. An artificial reality-powered changing room might enhance the experience for a high-fashion store geared towards millennials, but it may not be as useful for a company that sells wool socks. The best experiential retailers focus on what makes their stores unique and then use technology and customer information to highlight those strengths.
  3. Employees become brand advocates. As many stores offer new experiences, the employees must become champions for the brand’s ethos (think: Apple Genius Bar). Excitement is contagious and employees who can stir, guide, and increase that excitement within the confines of a store building may perhaps be the greatest asset for brands going forward.

 

Experiential retail is here to stay. Its broad applications will always allow retailers to innovate in order to differentiate. Check out our blog “More Store Closures Means Innovative Strategies” and follow us on Facebook, Twitter, and LinkedIn if you’re interested in hearing about other strategies retailers are using to fight brick-and-mortar decline.

ABOUT THE AUTHOR:
As a member of our marketing team, Zach helps shape up the content calendar and keeps operations running smoothly. He loves telling stories that entertain, sharing information that engages, and creating content that empowers. Ready to tackle anything that comes his way, Zach’s motto is always, “Absolutely. I’ll give it a shot.” Outside of Square Root, Zach loves to travel and has seen 43 of the 48 contiguous states. An avid basketball player, he describes his jump shot as “picture perfect.” Zach will graduate from the University of Texas at Austin with dual bachelor’s degrees in marketing and radio-television-film in December 2017.