The truth about experiential retail

by John Emmerson | COO Situ Live

Oct 7, 2020

The traditional retail model, especially, was already under question, forcing the emergence of a new approach even before lockdowns began.

A new era of retail will be underpinned by experiences. Experiences that were already desired by consumers. A desire that will only grow as the need for greater real world stimulation and physical human connection explodes in the post-pandemic world.

We have to look beyond the current paradigm and envisage an exciting time to come. A time when retail outlets become experiential centres focused on the storytelling and meaningful conversations at the heart of brands’ interactions with their customers.

Experiential retail versus experiential marketing

Immersive shopping experiences will supplant bland, outdated environments and become more appealing to consumers beyond the noise of online browsing. Indeed, the very concept of retail and the role it plays in the path to purchase and building brand loyalty is set to be redefined.

Not surprisingly, there is a lack of understanding of what experiential retail really is.

It’s easily confused with the marketing stunts, events and gimmicks inherent in experiential marketing. These have their place, but they are fleeting distractions compared to more supportive and helpful experiences that enhance the shopping event itself.

Experiential marketing creates a memorable moment that aims to influence a later purchase.

Experiential retail is different.

Technology is seamlessly integrated to support the consumer’s ability to discover and choose what’s right for them in the moment - enabling a more frictionless path to purchase. But it doesn’t rely on technology alone, it unlocks the power of human connection with empowered and knowledgeable in-store advisors to bring products to life.

70% of consumers want to physically experience products that will enhance their lives.

Situ Live - Kantar Panel Research

Sadly, technology is often the starting point and focus for many ill-advised brands that try to build new experiences to engage consumers.

Innovative tech can obviously impress and excite shoppers. But this is just the novelty factor, falling short of building true affinity with the brand it exists to facilitate.

Engaging, understanding and responding to consumer needs

Appreciation of the in-store experience is growing, with research by Westfield suggesting 2025 will be the ‘tipping point’ year. By this time, consumers expect that more than half of all retail floor space will be dedicated to experiences.

But change is coming sooner. And ironically, this shift may be further accelerated by our current situation.

It won’t just be a tipping point or a continuation of a trend. It’s going to be a renaissance - a complete reimagining of retail as we’ve always known it.

Of course, ‘experience’ is a broad concept that can take on any number of meanings, particularly in the world of retail.

As I’ve said, there’s no point adding some bells and whistles to a tired old formula, there has to be a holistic commitment to radically rethinking how things are done.

That means engaging, understanding and responding to consumers and their needs. Needs that will surely only be amplified as humanity finally overcomes its pandemic shackles.

86% of consumers believe it's important that brands lift their mood and make them feel better.

Momentum Worldwide - WE KNOW Experiences 2.0

Product demonstrations must be meaningful and interactive, whether they involve wearable technology or offer a chance to see smart kitchen appliances in action. And truly immersive experiences need to go beyond demonstrations, giving consumers opportunities to connect with products and feel the magic for themselves.

We need to take the theatre and excitement of experiential marketing events and embed it at the point where consumers are directly in the market for support and advice.

This will change the shape of retail.

Truly immersive and inherently personal

Joseph Pine and James Gilmore liken these experiences to theatrical performances staged by brands, with the purpose of engaging the consumer “in an inherently personal way”.

“Staging compelling experiences begins with embracing an experience-directed mindset, thinking not only about the design and production of things but also about the design and orchestration of experiences using these things,” they write in The Experience Economy: Work is Theatre & Every Business a Stage.

This is an important concept for us. And it's how we intend to work with our brand partners as we begin to roll out our venues during 2021.

Yes, it's daring. Yes, it’s different. But innovative brands need this. Consumers want it. And will crave it even more when their total freedom is re-established.

“Staging compelling experiences begins with thinking not only about the design and production of things, but also about the design and orchestration of experiences using these things.”

Joseph Pine and James Gilmore - The Experience Economy: Work is Theatre & Every Business a Stage

They will be more than ready to embrace new, real world experiences and escape the algorithmic noise of the digital world.

They will be ready to be ‘wowed’ by new innovations that make their lives better, as well as to be educated about how individual products work. And how they integrate with other brands to complement their lifestyle.

This will help break down the barriers often created by overwhelming choice.

We believe this is where the true value of experiential retail lies. Facilitating connections, conversations and an exchange of value between brands and consumers that can’t be matched in existing channels, especially the pure play digital ones.

Our report, Retail: The Quantum Shift, explores the trends driving the evolution of the retail landscape in more detail, and explains how this new approach is set to change brands’ marketing strategies forever.