Welcome to the “Store Experience Era”
To maintain relevance, many retailers are looking beyond selling ‘things’ to selling experiences
As numerous retailers downsize their physical store footprint through store closures, they are also testing adding “experiences” to their stores to create “customer stickiness”. Experiences include hosting events, launching in-store specialty services and interactive entertainment.
A study by HRC Advisory last year found that 57% of surveyed shoppers ranked store atmosphere as increasingly important in their shopping experience. The refreshing, innovative atmosphere that unique store experiences create can lead to many satisfied and repeat customers.
The goal of offering these experiences runs deeper than just getting customers to cross the store lease line – an increasingly complex objective given the growth of online shopping. The belief is that unique store experiences compel customers to dwell in the store and shop longer and are, therefore, more likely to make a purchase and spend more per visit.
With that potential benefit in mind, it’s not surprising that retailers are adding unique store experiences to the conventional shopping experience and doing so in a highly publicized fashion. The hope is that they can also attract customers who would otherwise not frequent the store, and influence brand perception in a more intimate and personal manner than traditional means like advertising campaigns or sponsorships. These investments add significant incremental cost and often take up space that could be used for sellable product.
With all that is at stake, what are the critical factors to consider when building out the in-store experience?
- Invest in what matters: What may come as a surprise, of course, is that introducing cutting-edge in-store technology does not necessarily drive effective store experiences. In fact, a recent study from a leading software company found that shoppers were not interested in interacting with artificial intelligence, virtual reality, or smart mirrors while in a shop. HRC Advisory’s recent customer research further substantiates these findings, where less than a third of surveyed shoppers appreciated technologies like in-store apps or customizable dressing room lighting. This suggests that retailers need to focus on logical, complementary initiatives to entice target customers, versus contrived efforts to fit the latest technology into store experiences just to appear innovative.
- Ensure products are the centerpiece of the experience: If the experience doesn’t help sell the product, the ROI may not be there. The product that the retailers sells should be a part of the experience. Some retailers, like Macy’s, have found a way to make the event about the product itself with the use of their Story concept. Retailers like DSW are testing nail salons to encourage salon patrons to buy new shoes that complement their fresh pedicure.
- Test, test, test: The in-store experience can be a way to test the experiences beyond core categories and to attract more customer segments. For example, Lululemon is prototyping artist-focused co-working and event space within at least one of its stores. As Lululemon expands beyond athleisurewear, this novel use of store space is part of a greater push to attract a new customer.
- Make it worth it: Creating the right store experience will require some investment. Of course, not all physical locations will warrant that investment. Consider scale when envisioning the experience and also about how the experience can be scaled to reflect the importance of the store. Beyond just a flagship offering, think about how to scale back to additional stores while maintaining the essence of the experience being created. The right formula might involve producing a few different experiences that are tailored appropriately to the store or market.
- Not a “one and done” effort: One of the hallmarks of the current retail environment is the pace of change. When designing the in-store experience recognize that this can’t be a static display. The experience itself must have the ability to evolve or change over time if it is going to be used successfully as a tool to drive traffic and transactions.
The new focus on the store experience is indicative of the confidence exemplified by a new set of retailers who believe in its effectiveness. If well-executed, it just might be the secret recipe to recovery and success for many retailers.