Online shopping has exploded over the past decade, and experiential retail is helping stores make a comeback.
In 2020, online spending represented 21.3 percent of total retail sales according to Digital Commerce 360. Consumers spent $861.12 billion online with U.S. merchants, up 44 percent from the year before. In 2019, only 15.8 percent of total retail sales were completed online.
Some of the increase had to do with the COVID-19 pandemic, but online shopping has been on a steady uphill climb for years.
And no wonder. When you shop online, you don’t have to go anywhere, you can choose next-day delivery and other convenient delivery options, you have access to more products, and you can often get your shopping done in less than half the time.
This has made it tough for traditional retail stores. As online shopping has increased, in-person shopping has diminished, and companies are scrambling to do something about it.
Realizing that today’s consumer needs more incentive to get out of the house and travel to a store, brick-and-mortar shops are beginning to change the way they do business. That has given rise to the new term, “experiential retail,” which may be the one thing that saves local shops from extinction—while giving consumers a fun new way to get their products.
What is Experiential Retail?
Experiential retail is a type of retail sales or marketing whereby customers enjoy the “experience” of shopping. While you may be able to get a product fast and easy online, you miss out on the sensory and tactile experience of being able to interact with products, communicate with people who are knowledgeable about them, and physically explore the store and all it has to offer.
The truth is that in many cases, we no longer need to go to a physical store to get our goods. Online commerce has made many physical stores unnecessary when it comes to delivering products to people, but that doesn’t mean they’re not valuable or desirable.
Human beings enjoy interactions and experiences. Particularly after being cooped up during the pandemic, most are craving face-to-face contact.
Still, simply walking into a store, finding a product, and walking back out isn’t enough in most cases. Today’s customer is looking for a little more.
How Does Experiential Retail Work?
Physical stores that want to thrive in today’s market know that they need to offer customers more than the typical retail experience. That may mean incorporating any of the following:
- Immersive and shareable experiences
- Ways to stimulate customers’ senses
- In-store events and services
- Ideas that prioritize customer engagement over sales
- Personalization that helps forge emotional connections
A Casper mattress store in New York, for example, offers customers the option to spend 45 minutes in a private sleeping pod that incorporates a Casper mattress, sheets, and pillows, along with a fully equipped bathroom for freshening up afterward. The experience gives customers a chance to enjoy some truly restful time while the company gets a chance to show what their products can do.
Starbucks, on the other hand, offers a sort of community feel in their stores, with the tables, chairs, and Wi-Fi connection giving customers a place to come work, research, or relax while enjoying their favorite personalized beverage.
Samsung’s pop-up store in New York takes it a step further by offering a cavern-style venue complete with interactive art, virtual reality, lounge areas, and a recording studio. And New York’s American Girl flagship store offers a salon where girls and their dolls can get matching hairstyles, manicures, and piercings.
The idea is to find innovative ways to merge entertainment, sensory experience, and even technology with traditional shopping—and it appears to be working.
Experiential Retail Can Help Increase Customer Loyalty
GlobalData reports that shops providing extra services like restaurants, in-mall entertainment, and child care enjoy more frequent visits from consumers as well as increased sales. The more innovative these shops are, the more people will pay attention—and the more they are likely to share their experiences.
Indeed, sharing is a big part of the success equation. If customers walk into a store and enjoy their experiences there, they are likely to snap pictures on their smartphones and share them with their friends, providing free advertising for the stores.
Research from marketing firm Walker Sands also shows that personalized and unique experiences help drive increased sales for brick-and-mortar shops. Technology, too, can be helpful in-store, particularly if customers can use an app to get exclusive discounts or other extra perks.
Other methods that seem to be helping stores to succeed in today’s more competitive market include:
- Creating a more personalized shopping experience
- Providing live product demos
- Scheduling special events and entertainment
- Offering virtual reality experiences
- Incorporating family and kid activities
All of these improvements can help customers to feel more connected to a physical store, increasing awareness and loyalty. Experiential retail is giving companies a way to not only survive but thrive in today’s technology-driven world.