Experiential Retail

The Rise of Experiential Retail and Retailtainment

• Experiential retail aims to provide customers with a unique and memorable shopping experience.
• Experiential retail is characterized by unique spaces, high customer engagement, and the use of technology.
• Creating an attractive and welcoming environment is crucial for experiential retail.
• Experiential retail outlets focus on providing a memorable experience for customers and building strong relationships.
• Retailtainment is a trend where retailers use entertainment to attract customers and encourage them to spend more time and money in their stores.
• Retailtainment can take the form of in-store events, interactive displays, and a comfortable shopping environment.
• The goal of retailtainment is to create a unique and memorable shopping experience that builds customer loyalty and drives sales.
• Retailers use retailtainment to create an engaging and memorable shopping experience that stands out from the competition.
• Interactive technology can be used to create an immersive shopping experience.
• Retailtainment adds excitement and energy to the store environment, making it more inviting and enjoyable for shoppers.
• Experiential retail goes beyond retailtainment by creating an emotional connection with customers, leading to brand loyalty and repeat business.
• Experiential retail and retailtainment are important trends in the retail industry, with the former focusing on lasting impressions and emotional connections with customers.

6 Brands That Are Mastering Experiential Retail

• Marvel's Avengers S.T.A.T.I.O.N is an immersive exhibit that has toured the world since the first Avengers film, featuring real-life movie props and interactive displays, and providing an in-person experience to fans and bringing the brand to life.

• Farfetch's Store of the Future is an augmented retail solution that links the online and offline worlds, using technology to enhance the retail experience, including connected clothing racks, touch-screen-enhanced mirrors, and sign-in stations that pulled data collected online to use in-store.

• Huda Beauty ran an immersive retail experience pop-up store in the centre of Covent Garden, London, to launch a new product range and reach new customers, delivering a sci-fi themed experience in support of their new eye-shadow palette Mercury Retrograde.

• The House of Vans in London converges art, music, BMX, street culture, and fashion in a 30,000 square feet building, offering a unique shopping experience where young people can shop and socialize.

• Ikea brought 100 Facebook competition winners to one of its warehouses and let them stay the night, selecting the mattress, sheets, and pillows to fully give them a tailored experience, and providing a unique way to obtain visibility and get fans to focus on what Ikea has to offer.

• Space Ninety 8 is a shared retail space that spans 5 floors, hosting retailers, galleries, and even a rooftop restaurant and bar, emphasizing experience and perfecting the art of retailtainment.

• Farfetch's CEO, José Neves, has spoken about his concern that physical retail is diminishing, and his vision for retailtainment includes advancements in technology to make the consumer experience more human.

• The Avengers S.T.A.T.I.O.N is a great example of retailtainment and experiential retail in action, where visitors are fully immersed in the fictional world they adore, further cementing their affiliation and love for the Marvel brand.

• Huda Beauty's sci-fi inspired pop-up in Covent Garden caught the eye and wowed its visitors, introducing a whole swathe of new customers to the Huda Beauty brand.

• The House of Vans is the perfect example of how experiential retail can be used to empower a shopping experience, offering a space where young people can not only shop but spontaneously socialize.

• Ikea's Big Sleepover is just one example of how the company is using social media to apply experiential marketing to its retail strategy and provide its customers with a memorable event that brought the brand a ton of visibility and engagement.

• TOMS' placed VR headsets into 100 stores in 2015, enabling them to virtually transport players to Peru to see the impact of their One for One giving campaign on local people, improving awareness of their social corporate responsibility and promoting their giving campaign.

Experiential Consumption: The Rise of Experience Economy and Changing Consumer Behavior

• 78% of consumers, particularly millennials, prefer spending on experiences over materialistic consumption for hedonic value.
• Experiential consumption created opportunities for service retailers but posed challenges for retailers of tangible merchandise.
• Experiential marketing emerged as a unique marketing strategy prioritizing customer experience to combat the challenges of experience economy.
• Consumer spending on experiences like food, travel, events, and leisure was expected to reach $8 trillion by 2030.
• Consumers migrated from 'material consumption' to 'experiential consumption' seeking unique, social activities and cherishing memories longer.
• The experience economy was predicted by James H. Gilmore and B. Joseph Pine II in 1998, focused on creating memorable events for customers.
• Unique real-life experiences like adventure, dining, theme parks, concerts evoke greater satisfaction and are considered more social than material goods.
• The worldwide revenue of the Walt Disney Company's parks and resorts segment touched $20.3 billion in 2018.
• 52% of consumers surveyed preferred spending on good experiences instead of buying tangible merchandise like shoes and apparel.
• The travel and tourism sector's growth of 3.9% outperformed the growth of the global economy in 2018.
• The total revenues of the live concert industry were expected to reach $31 billion by 2022.
• Experiential consumption was catalyzed by digital disruption that changed the media habits of consumers who became the habitat of social media.

The Rise of Experiential Consumption and its Impact on Business

• FOMO (Fear of Missing Out) contributed to the growth of experiential consumption among millennials.
• Citizen Relations Canada found that 68% of Canadian millennials surveyed indulged in reactionary consumption within 24 hours of experiencing FOMO.
• The rise of smartphones, internet penetration, and social media usage drove the growth of experiential consumption.
• Millennials viewed ownership differently compared to previous generations, creating opportunities for various companies, including startups.
• The experience economy boomed, creating business opportunities in the service sector such as events, amusement parks, restaurants, entertainment, fitness, and tourism.
• Restaurants offered unique experiences through technology, special events, and hospitable environments to meet consumer demand for experiential consumption.
• Consumers had a huge appetite for unique, engaging, and exciting experiences and considered the brand experience 1.5 times more significant than other factors.
• The demand for experiential and customized luxury tours also evolved dramatically.
• The shift towards experiential consumption led to the downfall of the retail sector and the bankruptcy of several retailers.
• Retailers of tangible products, including luxury brands, started creating and nurturing human experiences to sustain in the market.
• The shift towards experiential consumption did not indicate that consumerism was dead, but rather shifted from the desire for material to the pursuit of pleasure.
• Marketers began competing on the basis of unique and engaging customer experiences, going beyond traditional marketing strategies to enhance customer engagement, build brand affinity, and increase online presence.

The Rise of Experiential Marketing: Understanding the Importance of Customer Experience

• Experiential marketing is a strategy to create compelling consumer engagement through brand experience.
• 96% of consumers believe events influence their purchase decisions more than traditional advertising.
• Emotional connections with brands are established through experiential marketing events.
• Brands are responding to the experience economy with virtual reality and augmented technology-driven experiential activities and social experiential events.
• Companies investing in experience-led products and services are doing better than traditional product or service companies.
• Retailers resort to creative FOMO-worthy marketing strategies to attract millennials.
• The popularity of experiential marketing is due to the changing retail landscape, digital disruption, and rise in experiential consumption.
• Innovative organizations improvise customer experience to meet the need of the hour.
• Pioneers in the market led by examples and raised the experiential marketing strategy bar high.
• Experiential consumption is on the rise, and consumers gradually drift away from materialistic consumption.
• Insufficient financial resources and expertise create gaps between customer expectations and brands' experiential offerings.
• Brands allocate more budgets and channelize resources to create the best experiential marketing strategies.