The Wonderment of Experiential Retail

By Shaili Bhatt, C+R Research, Chicago, IL, shailib@crresearch.com

Interactive kiosks that invite shoppers to customize products. Stunning, Instagrammable backdrops. Immersive, game-like experiences to stop and play. Experiential stores of the future are here, generating buzz with exciting and noteworthy components; it’s a welcome contrast from the ongoing losses of physical retail in news headlines.

The retail industry is experiencing major shifts to adapt to an omnichannel economy. Social media, customer reviews and product comparisons regularly factor into shoppers’ purchase decisions. Online and app-based purchases require noticeably fewer clicks with fingerprint sensors and face recognition technology; busy shoppers expect delivery services or subscriptions for products to arrive directly at their home. Physical and digital solutions are more closely integrated than ever.

Meanwhile, e-commerce remains at a gradual uptick, accounting for 14% of total US retail sales, and 15% of total retail sales for global e-commerce. There are decreases in brand loyalty, especially as private label and online-only brands continue to evolve and provide increasing value. Current customers and loyalists feel confident and comfortable to replenish products online or with an app, but for prospective consumers, brick and mortar stores are better at driving new business.

Established brands are actively restructuring and renovating stores to provide more captivating experiences, especially in flagship and pop-up locations. Experiential retail strategies from major brands like AT&T, L’Occitane and Timberland are a few examples we will explore in this piece. Premium mavericks like Canada Goose also incorporated top-of-the-line strategies to boost their physical retail presence and brand credibility right out of the gate. (Anecdotally, the magic number for experiential concept locations is five pop-up shops.)

First, let’s consider the specialty retail trend for “outdoor immersion.” This trend spotlights nature and inclement weather to impart the product’s quality (e.g., durability and comfort in adverse conditions) and, hopefully, to broaden its appeal and relevance.

Imagine walking into a store that is a living garden. At Timberland’s concept store in New York, rugged boots are stylishly elevated along walls of inviting, lush greenery. Collections of boots are also on transparent displays atop hundreds of leafy green plants. Full-size birch and ficus trees and reclaimed wood tables are hard to miss throughout the store. Curious shoppers can enter a branded space called the Rain Room, featuring digital rain, and they can walk into a snowy scene with a park bench, as vivid reminders that this brand is warm and waterproof. “For 45 years, Timberland has inspired people to step outside—to pursue the outdoors with passion and purpose. Now we’re pushing the boundaries of what that can mean,” said Jim Pisani, global brand president for Timberland.

Canada Goose is taking outdoor immersion a step further. Known for highly-coveted, high-end down jackets, initial wear was among a niche audience; wearers would be asked on the street where they had worked in Antarctica. But a vulnerability to Canada Goose’s ongoing sales and revenue stream is that geography, seasonality, and warmer temperatures tend to curtail purchases of outdoor seasonal wear. To address this, at least five Canada Goose flagship stores now include a Cold Room for shoppers to test its coats and gear in a frigid environment; conditions that they were designed for, according to the website, which boasts how their parkas are worn by scientists in Antarctica. The Cold Room experience is not only exciting but also a relevant and useful way for customers to make more informed shopping decisions.

Stores with experiential elements aim to deliver a departure from the real world beyond shoppers’ expectations. This can include interactive experiences where you move through the store, use technology, and get something out of it (e.g., opportunity to use virtual reality and be in the world of a show or movie, get a little keepsake, snap pics for Instagram). These experiences give you the sensation that you are stepping into another world or experiencing a physical connection to it, if only for a few minutes.

With experiential retail, stores are offering unique, tangible experiences to counter the convenience and price of internet shopping. (Stores are certainly continuing to offer hands-on, “try before you buy” experiences not found online—that’s not going away).

In some cases, culturally relevant movie or franchise tie-ins are driving visitation and enhancing the excitement around the visit before shoppers even step into the store. This is achieved with a mix of intensely themed environments, heavy doses of exclusivity and authenticity, and more intimate virtual reality experiences, all with a personal touch.

For example, at several of its flagship stores, AT&T harnessed the power of the hit series Game of Thrones (GoT) with a pop-up that takes over the regular store display. GoT fans entering these stores immediately encountered a large, colorful display of banners from the popular houses from Westeros; it was an imposing, uncommon, and inspiring set-up.

Well-trained staff considerably enhance the enjoyment and impact of experiential retail. In this GoT takeover experience, AT&T employed personable staff who seemed to appreciate and embrace the fandom. Beyond the lobby, visitors were encouraged to freely explore authentic props and costumes around the store. Experimentation and customer service are two of many building blocks that factor into experiential retail success.

Most remarkably, AT&T offered GoT fans a refreshingly informal invitation to sit on an extraordinary full-size replica of the Iron Throne, the titular end-goal of the show. This space was surrounded by imposing columns, complete with a medieval stone motif backdrop, effectively masking the fact that shoppers are in a telecom store. The authenticity and rarity of this experience offered priceless, shareworthy pictures.

Immersion is the entertainment aspect of experiential retail, and it can also include new technologies like augmented or virtual reality. In AT&T’s GoT takeover, there was an intimate 4D VR experience—using HTC Vive and Unreal Engine—to go “Beyond the Wall,” for guests to have a shot at killing the Night King’s army of the dead, the show’s longtime zombie-like nemeses.

Experiential takeovers at retail locations like these are changing the way people interact and connect with brands. Fans feel emotionally uplifted and inspired by their visit, which in turn helps to build deeper ties with the host brand and its physical retail space. These experiences and interactions are remembered long after the takeover leaves the store.

A classic French beauty brand, L’Occitane en Provence, recently shifted its retail strategy to tell the brand’s story in more exciting, authentic ways. The flagship store in Manhattan now features an area dedicated to social media, including a live feed of its Instagram account. Shoppers can experience a bike trip through Provence on stationary bikes that face a screen showing the French countryside. The store also offers customers a VR-enabled hot-air balloon ride over France, along with a real-life hand massage that uses L’Occitane products.

Experiential retail strategies tend to be more disruptive, offering heavy doses of aspiration and inspiration, opposite of the austerity that retailers once embraced. According to the Future 100 report by JWT Intelligence, these retail experiences are “radically different to the expectations of older generations, who looked for serenity and formality.”

Immersive experiences like the Rain Room, Cold Room, AR/VR, and sitting on the Iron Throne are coercing shoppers to have a more prolonged experience at these retailers than they would have otherwise. How can retail stores push the envelope to give customers a reason to come into stores more than ever? Does a retail store now have to offer something that shoppers can’t get online? And if so, how can a brand differentiate in a growing trend and not get lost?

Qualitative research methodologies are excellent for generating ideas and exploring which immersive and experiential ideas are truly special and resonating with shoppers. Ideation, co-creation, and concept development research can be conducted to catalyze, iterate, and optimize experiential ideas. Before or after the launch, teams could benefit from observational research, perhaps paired with spontaneous intercepts for follow-ups into shoppers’ reactions. Research like this allows brands to uncover the rich emotional and social significance of new experiences, to better understand dimensions such as relevance, affinity, authenticity, and differentiation at a deeper level, whether shoppers make an immediate on-site purchase or not.

At every step, qualitative research provides deeper context and insights to fuel brand retail strategies and marketing communications. What multisensory elements are adding valuable texture to these experiences? Is there multigenerational appeal? What part of this experience are shoppers going to share with their friends? Are they getting good Instagram pictures that integrate the brand? Free samples or tokens to take home as a gift? Who are these experiences resonating with the most, and are there ways to broaden that interest and appeal? Finally, does experiential retail increase brand loyalty and lifetime spend? Market research will likely increase to figure these things out.

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