George Yashin, Founder and CEO of ZERO10.
The pandemic has fundamentally altered the trajectory of retail, rendering traditional tools insufficient and compelling industry leaders to embrace new approaches to meet evolving clients' demands. After spending months in lockdown, consumer behavior has inevitably shifted toward digital. However, online activations alone cannot satisfy a growing hunger for entertainment and experience. Statistics show that customers are still willing to encounter brands’ products in a physical environment.
At that juncture, experiential retail came to the forefront of retail marketing. Rather than exclusively emphasizing product sales, marketers began prioritizing immersive experiences within physical retail spaces. This shift underscored a transition in market competition. It is no longer about offering products; it's about how the products are presented to customers.
Experiential Retail As A New Norm
These trends have enabled retailers to explore innovative approaches, fostering deeper connections between customers and brands while capturing their attention for extended periods. Some turn to emerging technology to enhance the overall shopping experience inside their retail points and draw new audiences to their stores. At ZERO10, we've observed a growing demand for AR mirrors that combine physical and virtual experiences and can be seamlessly integrated into stores.
Additionally, some retailers have expanded their offerings by branching out into new areas. For instance, Prada's highly anticipated branded café in Harrods last year immediately became a massive success. Similarly, brands like Burberry, Jacquemus, and Kate Spade have followed suit by opening pop-ups in prime retail locations. “At the cafe pop-up, we are testing a new lifestyle concept for the brand that offers a joyful experience and sparks emotional connections with brand fans,” explains Liz Fraser, Kate Spade New York's CEO.
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The concept of "retailtainment," which combines retail with entertainment through interactive experiences and technology, is now a reality for brands striving to remain competitive. To successfully integrate this approach into your brand strategy, consider these five tips:
1. Turn Your Retail Point Into A Memorable Destination
Many brands are reimagining their retail spaces, transforming them into engaging destinations that offer a blend of shopping and recreational experiences. H&M, for instance, renovated their flagship store in Barcelona, introducing a new retail concept featuring interactive fitting rooms, digital windows, and a coffee shop with an open terrace.
Taking innovation to new heights, the South Korean eyewear brand Gentle Monster has crafted stores resembling futuristic museums with humanoid robots and unconventional art installations. This bold approach has garnered remarkable attention for Gentle Monster, driving unprecedented foot traffic to their stores.
2. Use Augmented Reality To Showcase Your Products
Augmented reality (AR) technologies offer brands a low-risk entry into the realm of retail innovation. They seamlessly integrate digital objects into reality, augmenting the shopping process, as seen with the Louis Vuitton and Yayoi Kusama AR campaign or Nike bringing an interactive AR challenge into its NYC House of Innovation.
These displays, while capturing users' attention and introducing new experiences, maintain the focus on the product itself. Some retailers like Coach and Tommy Hilfiger are leveraging AR Mirrors in their stores to provide shoppers with virtual try-on experiences, allowing them to visualize themselves wearing the brand's latest designs digitally, thus attracting their attention.
3. Go Phygital
While virtual experiences are gaining significant attention from retailers hosting fashion shows in digital worlds or opening stores in the metaverse, merging the physical and digital realms proves to be more effective. Brands are exploring innovative ways to blend these worlds, appealing to a wider range of customers, including tech-savvy Gen Z and Alpha and more traditional shoppers.
For instance, Louis Vuitton has seamlessly integrated the virtual experience with tangible benefits for web3 users. By purchasing NFTs, Louis Vuitton clients could access exclusive collections of physical products, bridging the gap between virtual and real-world retail. Similarly, Dior surprised the fashion world by launching their first sneakers, which were paired with their digital counterpart in the metaverse.
4. Add New Experience To Your Brand
Experiential retail aims to provide multisensory engagement with brands, often through unique experiences designed to evoke emotions, particularly among those unfamiliar with the product. Last winter, Loewe offered customers the opportunity to 'taste' the new collaboration with the Japanese art studio Suna Fujita through traditional Japanese dishes at a pop-up Christmas cafe in Madrid.
In September, Burberry launched a new project, Burberry Streets, that included immersive experiences, installations and events in London, Seoul and Shanghai. The project debuted in London, where it featured a branded tube station, iconic London cabs adorned with Burberry branding, captivating video screens and striking banners, transforming the city into a dynamic showcase of Burberry's vision.
5. Use AI To Enhance Your Customer Service
Artificial intelligence offers new possibilities for retailers, extending beyond its conventional digital applications to enhance in-store experiences. Brands like Burberry are leveraging AI to analyze customers' personal data, empowering shop assistants to provide customers with personalized recommendations based on their purchase history and individual needs when they visit a physical store.
Similarly, American grocery delivery service Instacart has developed a ChatGPT plugin to enable users to customize orders in real time. This AI-powered tool generates personalized meal ideas based on immediate requests and facilitates ingredient delivery directly to customers' doors through Instacart's service.
When exploring ways to enhance your retail strategy, focus on tools that benefit both customers and your business. Many marketers are turning to phygital tools to blend physical and digital experiences, appealing to both traditional customers and younger generations who expect innovation. Additionally, transforming your store into an aspirational destination by adding a coffee shop can attract a new audience.
One thing is clear: Experiential retail is here to stay. The sooner you start experimenting, the greater your chances of success in this highly competitive field of modern retail.
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