Experiential retail gets creative – but the customer still comes first
In today’s hypercompetitive market, the battle for the consumer is about giving them not just a product or a service, but an entire experience.
Retailers are investing countless dollars to differentiate their brands from competitors and play the cards of personalization. With further advancement in technology bridging the gap between the digital and physical worlds, companies are bringing to life next-level retail concepts in an omnichannel fashion. Both the evolution of the consumer and deeper integration with technology has created a portal to the future for retailers who dare to be bold.
A future where consumers can rent cycling gear from a store and experience a guided mountain biking tour from trained staff without leaving the area; travel to a nearby space and pay to take Instagram-worthy photos in glowing ball pits or rooms full of ice cream; or enter their favorite stores and interact with virtual reality (VR) headsets to visualize products not stocked or see it placed in their homes.
This is the future of retail and it’s already picking up steam as retailers adapt their business models around creating an experiential customer experience (CX). But what defines something experiential anyhow? Also referred to as “retailtainment,” it entails focusing on the experience at hand rather than solely the transaction. It’s the difference between selling someone a cappuccino, and selling them a relaxing afternoon in a café where every step of the customer journey, from entering the shop, waiting in line, to paying for their cappuccino, to indulging in in-store activities, flows together in just the right way.
The trend towards improving CX is especially prevalent during the holiday season as shoppers plan to spend nearly $1.5K per household and approximately two-thirds of consumers allocate spending to experiences, according to a 2019 study from Deloitte. Companies are bringing experiential retail front and center and making more memorable (and Instagrammable) memories that keep consumers jingling after they leave the store. Here’s a look at some of those trends:
Reviving struggling businesses
With retail today, it’s innovate or risk getting left behind. Experiential retail is the innovation that has the potential to transform brands and drive the bottom line, specifically struggling businesses. Just this holiday season, Toys “R” Us resurges once again, making its way back into the hearts of consumers with the launch of an experiential omnichannel concept.
Hailing support from one of America’s largest retailers with a booming toy business, Target, Toys “R” Us is now powered through Target’s website, offering a truly immersive experience to online shoppers with interactive educational tools for children. Experiential retail is not just an experience that is seen, felt or heard in a physical store environment, it’s quite the opposite. And with the rise of the mobile revolution, experiential retail will have even more of a home in the digital world.
In fact, a FIS Retail Global Payments Report indicates that e-wallet purchases nearly overtook debit card payments last year (20% and 21%, respectively) – signifying changing tides in the future of U.S. retail.
Pop-up shops are popping up everywhere
In order to meet the demand and accommodate consumer preferences, some retailers open pop-up shops for a limited time during the holiday season. For instance, Abercrombie and Fitch launched a “Do 96 Hours In” Shop this season to bring local experiences to consumers in key cities. The shop offers hands-on experiences making consumers feel as if they are in their ultimate self-care destination.
Similarly, Kohl’s this year opens a holiday pop-up shop to bring its business to the hustle and bustle of Manhattan. Consumers can enjoy mocktails while they browse through interactive holiday windows to view limited edition products. And of course, the shop provides Instagram-friendly backdrops for capturing and sharing digital experiences. Experiential retail takes the form of many, and pop-up shops are a recurring way that retailers are innovating.
But yet, while these innovations offer a fun and exciting glimpse at the potential of experiential shopping, retailers must not lose sight of what’s at the heart of it all – the customer. As retailers take advantage of omnichannel and experiential retail, the primary focus should be driving consumer engagement and loyalty. Payments offer a way for retailers to drive experiential moments that excite, while also making the shopping experience faster, easier and more secure for customers, generating short-term satisfaction and long-term loyalty.
From immersive VR experiences and connected digital mirrors in consumers’ favorite stores that make shopping more fun and interactive, to seamless and secure payments that make everything faster and more convenient – experiential retail will only continue to gain prominence as the retail landscape shifts and tech gets smarter. And with over 50% of companies redirecting their investments towards customer experience innovations, according to a Gartner study, CX will reign supreme.
Casey Bullock is GM, global e-commerce, of Worldpay from FIS.