Retail’s Not Dead – But, Retailers Must Evolve to Keep Brick-and-Mortar From Going Extinct
Which sounds more appealing: Browsing for the perfect pair of boots, reading reviews, and snagging your size on sale – all without leaving the comfort of your couch – or gearing up for a trip to your local mall, facing the crowds, digging through styles and shoeboxes at multiple stores, and MAYBE unearthing a style you like, in a size you can fit into? No, it’s not a rhetorical question - but the answer is absurdly obvious.
It doesn’t take a material girl to recognize that global shopping habits have drastically changed in the past couple of years. With the COVID-19 pandemic added to the mix, e-commerce has gained even more momentum in comparison to brick-and-mortar retailers. As consumers, most of us have become accustomed to - and proficient at - shopping online. We spend the minimum amount needed for free shipping, track our packages through smartphone apps in anticipation, and excitedly open our front doors to goodies delivered direct - it’s like Christmas, year-round!
Daily, we see the impact e-commerce - (especially with the momentum it continues to gain as a result of the pandemic) - has had on the retail sector. However, not all retailers have reacted in the same way. Some have found ways to buck the trend of store closures through “experiential retail” – they have intertwined innovation into the transactional business, providing education or an experience to the customer.
Interested in learning more? First, let’s explore experiential retail from a conceptual standpoint. Then, let’s investigate some real-world examples of experiential retail applied successfully in the CRE sector.
Experiential Retail: What Is It…and Why Should I Care?
While experiential retail isn’t entirely new, COVID-19 accelerated the trend and brought it to the forefront. With the rise of e-commerce, diminishing foot traffic, and changing consumer preferences, experiential retail may be the key to survival. Retailers must provide consumers with a solid value proposition on why they should physically visit the store.
Experiential Retail: Who’s Done (or Is Doing) It Successfully?
Apple
As one of the pioneers of experiential retail, Apple is excelling because it operates differently than most retailers. Over the past two decades, Apple stores – whether flagship stores or smaller locations in suburban shopping centers – have held to the company’s long-standing value proposition of delivering a superior user experience.
Enter an Apple Store on foot, and you’ll see more than tables of white, chrome, sleek products. Apple Stores have classes and lectures – from the outset, Apple treats and approaches consumers as more than the buyers of its technology, alone. Each of its physical locations boasts a Genius Bar – an iconic service and physical hotspot that consumers can leverage for troubleshooting and repairing the products they purchase. Apple’s employees support consumers in a way that is unforced but purposeful. They are the Geniuses, and they are here to help you, the consumer. In each of these ways, Apple has set a new standard for what it means to deliver an unparalleled in-store shopping experience.
Nike
Nike’s flagship store in SoHo (New York) is a five-story, 55,000-square-foot, retail experience that is as much of a place for sports enthusiasts to go and play as it is to go and purchase.
Features include:
Basketball half-court with adjustable hoops and digital screens (customers can try out the shoes, too)
Shoe customization bar
Wall-embedded touchscreens everywhere you look
Treadmill in front of a jumbotron that simulates outdoor runs
Dick’s Sporting Goods
Dick’s Sporting Goods unveiled the House of Sport concept, which it describes as a “place to gather and learn.” With two locations in the U.S. as of April 2022, House of Sport offers towering climbing walls, outdoor fields, indoor batting cages, golf hitting bays with simulators, and more. The stores also welcome community activities such as field days, sports practices, yoga classes, camps, clinics, and birthday parties.
Research shows the experiment has been a tremendous success, with weekly visits over 93% higher than those seen at other Dick’s Sporting Good locations.
Experiential Retail: Why Now Is the Time to Act
Currently, more than half of Americans are millennials or younger. Millennials and Gen Zers may have differences, but there is one thing they’re closely aligned on: spending their time and money on experiences over things, alone. In fact, more than three in four millennials (78%) agree. With a growing appetite for real-life experiences and creating memories, the younger generations are shifting away from materialism.
Millennials and Gen Zers don’t want the status quo retail experience of their parents’ generation. They want brands to engage with them as consumers, and here’s how to get started. Big-box stores may have an advantage, but mom-and-pop stores can find ways to become experiential, too.
Fuse retail with entertainment: A small bookstore could bring in a local author. Consider local celebrities or industry professionals to draw in consumers.
Feed the ever-growing appetite for social media: Consumers – especially the younger generations – love documenting experiences on social media. Whether or not you enjoy social media or think it’s a good thing is not relevant – social media is here now, and it’s not going away. So, leverage it – and understand that you can develop the tools and substance to feed that social media hunger in your store(s). Do your research and apply it. Are there local trends or events worth exploring through social media use? Is there an Instagram-worthy wall you can set up for selfies that could feature your company’s social media handle? Can you somehow incorporate signing up for marketing newsletters and special deals?
Face-to-face cravings exist: After two years of pandemic-enforced solitude, many people want in-person interactions again. Make their trip to your store worth the while – prove to them that in-person exceeds online. Train your associates to (1) be knowledgeable about your products and services and (2) approach and treat your consumers well. Evaluate the performance of your associates by asking:
How well do they know your products?
Can they effectively recommend items to your customers?
Can they offer product insights or stories that shoppers won’t find online?
So much has been said about how retail is dead in an age where e-commerce supposedly reigns supreme. Retail isn’t dead – but retailers MUST evolve and adapt or they will go extinct in the brick-and-mortar sense. The retail landscape has shifted considerably throughout recent years, but retailers can use the change and experiential trends to their advantage. Retailers must energize the in-store experience to keep shoppers coming in their doors – it’s an opportunity to keep the bottom line outside of the red, and to distinguish your brand in a dynamic, engaging, real-life way.