NEWSTORE Blog

 

Experiential Retail: Applying a Digital Perspective to Brick and Mortar

By Amanda Nadile - February 26, 2019

When Coresight Research published its top ten predictions for retail in 2019, the leading theme was reinvention – for the retail industry overall and physical stores in particular. This is despite ongoing chatter about a retail apocalypse. What’s actually coming to fruition is how far from a physical retail demise we really are.

Bottom line is shoppers still value physical retail. It’s why Coresight’s insights for the year focus on all-things experiential retail, including:

  • A new generation of flagship stores
  • Short-term stores
  • “New Retail,” also known as data-driven online-to-offline ventures
  • More technology
  • Artificial intelligence
  • “Smart Retail,” or the use of smart technologies designed to provide faster, safer, smarter and better consumer experience when shopping

The New Retail Concept

Recent years have seen consumers place an emphasis on purchasing products, services and even food online. It’s no surprise then brick-and-mortar stores have been feeling the squeeze. Major retailers and rising brands alike are realizing their go-to-market and sales practices need a rejuvenation, and it starts with their IRL stores.

In the words of Ron Johnson, chief architect of Apple stores, the way to make physical retail locations engaging is to:

“[Create] very distinct experiences for customers, in what they perceive as a public place. More like a great library, which has natural light, and it feels like a gift to the community. And we don’t want the store to be about the product, but about a series of experiences that make it more than a store.”

Brands are applying a digital perspective to physical retail to meet evolving consumer demands, reduce friction (anything that stands in the way of a positive customer journey), and get shoppers into stores. It’s why we need to adopt a “retail reversed” mindset. Think of physical retail like we do websites with intuitive and novel features that bring joy back to the experience of buying and selling.

Nike’s Chief Design Officer John Hook said:

“Imagine the website, live. The future of retail is going to be less fixed, more fluid, and hyper-responsive to consumer trends and needs.”

A Few Examples

This new retail philosophy is playing out in ways that are thoughtful, hyper-creative and fun. Here are a few we love.

Lego

In most malls and shopping villages, the Lego Store is close to the Apple Store. This is because the two companies approach the customer very similarly. Think of it, families enter a store that wants to be playful and supplies the toys to do so. Lego has taken the idea of “gamification,” a sure-fire way to motivate and engage consumers, to another level – especially for children. Much like Disney stores (Disney and Lego have a strategic partnership), Lego stores provide family rooms, display areas and in-store workshops, among other things, to make customers feel comfortable and welcome.

Tesla

Ex-Apple retail executive George Blankenship joined Tesla to brainstorm and design the brand’s retail stores. The stores are located in malls, which is entirely new for the automotive industry and a borrowed idea from Apple. Tesla’s retail locations are called galleries and they include connective displays focused on core differentiators such as autopilot, safety and motors.

Touches that Blankenship brought with him from Apple to Tesla include:

  • Uncluttered floor space which allows for less distraction and easier discovery
  • Touch-screen walls as a nod to the website shopping experience
  • Open interaction with products
  • Seating areas for introspection, talking with salespersons and “showrooming”

It didn’t take long for Tesla to achieve the highest Net Promoter Score (NPS) in the automotive industry and one of the top scores globally.

Kroger

What? Kroger is in on the experiential retail wagon? Believe it. The grocery industry is borrowing from its fellow large retailers to provide customers with experiences, products, services, and digital features that are much like what Amazon offers. Kroger now boasts:

  • New digital shelf tags that include price, promotions, and nutritional and dietary information about the goods on that shelf
  • A partnership with Microsoft to perform Retail-as-a-Service (RaaS)
  • The introduction of a connected store experience
  • Restock Kroger – a three-year $9 billion plan to increase its e-commerce, digital, and omnichannel businesses and redefine its customer experience
  • A “Scan, Bag and Go” program which allows shoppers to scan items from their smartphones
  • Machine learning, artificial intelligence and IoT for inventory management, innovation and remote work opportunities
  • Delivery by autonomous vehicles
  • Automated warehouses
  • Customer personalization

Nike

This month, Nike opened a pop-up store in Atlanta called SNKRS. The store serves users of the brand’s SNKRS mobile app with shoes, apparel, and other merchandise. Limited edition shoes are available, along with a Shock Drop app to send users “push notifications” of current shoe offers. When in the pop-up, users can find additional location-based features to unlock different sneaker access.

The company describes the pop-up as “the physical manifestation of the SNKRS app.” It will include a vending machine with SNKRS-related goods shoppers can access by scanning a pass in their app.

Nike’s experiential retail efforts don’t stop there. The new New York City flagship store is making brick-and-mortar shopping as convenient as online. The store boasts what it calls the Speed Shop, where shoppers can find and reserve products online, then try them on in-store. A locker houses the goods, and all you need to unlock it is a smartphone. If the fit and style are correct, customers can check out on their phones. IRL shopping now uses technology to make purchasing a product completely seamless.

Photo Courtesy of Nike

Roots

This Canadian retailer offers high-quality, outdoorsy fashion for men, women and kids. In June of last year, Roots opened a store in Boston on the famed Newbury Street. The location is set-up gallery-style with multi-sensory touches. The new venue allows the retailer to connect with urban consumers in what’s called the “Roots Legends Brand Activation Center.”

Roots President and CEO Jim Gabel said:

“We wanted to launch our U.S. expansion project in Boston first by bringing a unique and immersive retail experience to the community. New England, and more specifically Boston, is a perfect fit for our brand.”

The store features:

  • Personalized, handcrafted leather bags at the Roots Sweat Bar
  • Awards Jackets that are available at the Leather Customization Workshop
  • Badges and patches exclusive to the Boston area

Its Toronto store includes:

  • DJ stations for special events
  • A lounge area for hanging out
  • Varying décor in dressing rooms
  • Custom Roots jackets that can be customized with monograms, funky colors and other design elements

The company hired Karen Zuccala as vice president of marketing to boost the brand’s marketing and brand storytelling. Formerly Nike’s brand marketing director, she also worked for Adidas and Deisel – two companies on the forefront of omnichannel retail.

L’Occitane

French beauty brand L’Occitane opened its new concept store on New York’s Fifth Avenue in August 2018. The beauty brand’s strategy includes social media-friendly displays and hands-on interactions. It evokes natural elements, soothing customers with a “rain shower” sink, a skincare consultation venue, ever-changing immersive installations that draw shoppers into the charm of Provence, France, and a fulfillment services center. The flagship includes L’Occitane’s signature beauty items as well as experience-rich concepts such as:

  • Live video of its Instagram account
  • Stationary bikes in front of a view of Provence
  • A 360-degree virtual hot air balloon ride during mini-spa treatments
  • A lavender-scented truck traveling across the US to woo customers
  • A test and play experience
  • Radiating sun installation sets
  • Fragrance clouds
  • An interactive skin care bistro

L’Occitane’s beautiful website is enhanced in-store through the creation of real-time, sensory experiences.

Photo Courtesy of L’OCCITANE Group

STORY

This retailer may be the best model of the immersive retail experience. The STORY team says it pioneered and created a new retail/media business idea; it built communities of consumers and small businesses and partnered with Fortune 500 companies in ways most could not have imagined. The next chapter of STORY includes moving into select Macy’s stores.

The idea is to create retail concepts that change like a gallery and have more in common with a magazine than a store while selling things like stores have always done. The STORY officers say its mission is:

“To create accessible discovery at the intersection of community and small business.”

STORY has all the elements of a website, such as a feeling of immediacy, learning opportunities, playfulness and excitement. And, yes, STORY has an online presence. But nothing is sold online; only at the store where yoga classes take place, cooking classes occur and DIY workshops are packed. Here’s how they do it:

  • Every four to eight weeks the gallery changes everything about the store to offer a new theme, trend or issue.
  • The gallery organizers create concepts such as Making Things, Home for the Holidays, Love, Made in America and more.
  • They ensure that the experience is everything and their fine-tuned collaborations fit.
  • The partner with businesses like American Express, Intel and Target, who create access for brands to meet influencers from across media and retail.
  • The team encourages small businesses, brands and makers to be a part of the STORY.
  • They listen to the advice and teachings from people like O Magazine’s Adam Glassman, GMA’s Tory Johnson and The View’s Whoopi Goldberg.

New Store

Today’s new retail is immersive, interactive, technology-enhanced and personalized. It seamlessly connects shoppers, store associates, products and brand properties, to create a new kind of brand experience that is perfect for the modern mobile shopper.

Want to unlock your New Store? We can help.