We frequently buy goods and services from retail businesses, supporting the industry’s growth. The retail sector is one of the few industries that are crucial to our survival. Also, the economy is greatly impacted by retail with high employment and annual sales involved.
Let’s look at the global retail sales for the previous year, which were roughly $27.34 trillion in income in 2021 of that amount, $5.76 trillion came from online retail sales and $19.86 trillion from sales by physical locations. It is predicted that this amount will surpass $30 trillion by 2024.
Source – Deloitte
The consumer is King in any business and satisfying the consumer is becoming challenging with more competition, changing preferences of consumers, and multiple channels for communication. Customers are free to share their experiences about anything and anywhere in the market nowadays. They can do it on a variety of channels, including social media, review websites, e-commerce websites, and influencer marketing.
Customer delight is the new benchmark for customer satisfaction. Retailers should aim to turn customers into fans and to do that customers should experience something new that makes them feel special and unique that’s where the concept of experiential retail comes in which customers are provided with experiences other than the standard ones, such as browsing merchandise, conversing with salespeople, handling products, and checking out, when they enter a physical retail space. Interactive art, live music, virtual reality, cafés and lounges, and video projection panels are a few examples of experiential retail amenities.
What is experiential retail?
Giving customers unique shopping experiences is an experiential retail marketing strategy. Stores leverage resources like cutting-edge technology, unique in-store services or events, and skilled staff to create distinctive in-store experiences that foster brand loyalty. Customers are immediately engaged, and you can ask them to interact with your brand in person.
A survey commissioned by Shopify and conducted by Forrester Consulting found that 35% of consumers intend to interact with companies through immersive moments in the upcoming year. The fact that 40% of brands stated that providing experience retail would be a high priority for them in the upcoming year is not surprising.
Difference between Experiential retail vs. traditional retail
- Experiential retail is a great alternative to traditional retail because it strongly emphasizes providing customers with a pleasurable experience
- It offers them value that goes above and beyond the standard shopping experience
- Customers may communicate with one another and discuss their brand experiences that create a word-of-mouth effect
- Customer interaction is more important than making sales in experiential retail which is the opposite of traditional retail
- The goal is to engage a customer’s various emotions not just provide good service
Purpose of experiential retail
- To develop a fully immersive experience that improves consumer loyalty to your company.
- Building a customer experience hub that delivers exceptional customer service and brands are approaching it in a sophisticated manner.
- Brands that place a high priority on engagement and personalization see a boost in income that happens almost three times as quickly as brands that don’t.
- Customers like customized services, which will eventually be advantageous to the business as they will choose to make purchases from you whether they do it online or in person.
Examples of Brands using experiential retail
Major brands understand that creating a fantastic in-store experience is essential to the success of their physical and mortar stores. Brands change their strategy and turn to experiential marketing, a tactic that places the customer at the center of a distinctive and engaging brand experience. Offering excellent customer service, product demonstrations, in-store events, and other activities not only draws in new clients and keeps existing ones coming back.
Some examples are as follows-
- Apple – One of the first companies to invest in experiential shopping, which has since gained rewards in the shape of rising popularity among both millennials and baby boomers. Thanks to its knowledgeable sales staff, in-store workshops, and unique events, it has transformed its physical sites into unforgettable brand experiences that cultivate loyalty with every visit.
- IKEA – As a result of the study they do before entering a new market they have been able to slightly customize the products it offers while maintaining enduring elements of the brick-and-mortar shopping experience.
- Vans – Customers can browse for their favorite pair of sneakers as well as engage with the neighborhood in a space that prioritizes creative expression. They developed House of Vans, a store that offers consumers access to a skating bowl, and ramp as well as music, cafe and bar, artist space, and theatre.
Ways Brands capitalizing experiential retail
- Place Omnichannel Services
- Invest In Customization
- Allow Consumers to Test Out and Use Products
- Build A Place That Focuses on The Community
- Offer Quality Services
- Implement Localization
- Pop-Ups Can Be Used to Determine Consumer Demand.
- Puts Customer Interaction Ahead of Sales to Provide a Memorable and Engaging Experience.
- Promotes Innovative Tactics That Pique Your Customers’ Senses
- Superior To Clients’ Expectations
- Leverages Activities and Products Available In-Store
- Serve Seasoned Customers
Related reading: Consumer and retail industry outlook 2023
- The use of cryptocurrencies in mainstream retail is gaining traction
In daily transactions, customers are demonstrating an interest and desire for cryptocurrency. Currently, there aren’t enough businesses that take cryptocurrencies as payment. Since retail heavyweights like Walmart and Amazon are launching long-term plans for cryptocurrencies. Small and medium-sized merchants should look into the prospect of cryptocurrency payments and how it will help them in this quickly changing market.
- Instant Shopping Becomes Truly Instant
You may pause a video, press a character’s costume on your phone to get links to instantly buy the items you want in your size, and freeze the frame while viewing any video or playing any game.
Touchscreens and interactive advertisements will take the place of outdoor billboards. While mobile wallets will be able to swiftly input shipping information and issue payments on the move, anyone walking by can pause, tap, and purchase featured items.
Customers can make immediate purchases by blinking in a predetermined morse-code pattern, and the package will be delivered from the nearby warehouse. People wearing will be able to instantly recognize the brand, price, and stock levels of any clothing or home décor products they see – both in-store and on the street – thanks to advanced visual AI.
- Personalization is Everywhere
In the future of shopping, digital technology—including smart mirrors, digital mannequins, QR codes, interactive applications, and others—will become a mainstay of physical retail, enabling brands and merchants to offer guided digital trips through real locations.
- Digital Store
From the minute a customer enters your website or app, emotionally intelligent technology will continuously evaluate the contexts and moods of the visitor. In accordance with this colour schemes, messages, and aesthetics will change. The home screen’s items, the wording on the page, the usage of the customer’s name, and the marketing of particular products and collections will all be customized to the individual customer’s preferences.
- Brick and Mortar Store
Advanced analytics will enable in-store workers to be aware of relevant information about each person that enters the store by using historical and real-time shopper behavioural data. Retailers will be aware of the customer’s past purchases, preferences, and tastes if they establish a regular relationship with them. Based on the requirements of both new and existing customers, they will be able to provide curated assistance.
It seems difficult for retailers to keep up with the constantly shifting requirements, wants, and preferences of consumers which is crucial in the contemporary retail environment. To deal with that the concept of experiential retail came into the picture which provides customers with more than simply the chance to purchase goods. It all comes down to providing a memorable in-store experience that will draw people back time and time again. If you give your customers an immersive and interesting shopping experience, they are more likely to remember your brand and come back for more. Therefore, experiential retail is surely something to consider if you’re looking for a way to expand your business.
Based on insights by Suchita Biswas, Senior Manager, Research and Information, TMT.