Experiential Retail

Due to the saturation of retail stores in the market, companies

have been forced to
find a way to differentiate themselves in order to remain in
business.
What is experiential retail
How do people experience it
Why is it necessary
How to create experiential retail
Experiential retailing contribution
 A successful retailer
One who provides the consumer with a total shopping
and/or service experience that outweighs the individual
product or emotional benefits.
Total Consumer Experience = Great Product +
Great Service /Aesthetics
No longer acceptable for companies to merely stock
merchandise on the shelves and expect it to sell.
Throughout the years, various merchandising and
marketing strategies have been implemented to help
increase sales.

One tactic that more and more retailers are

adopting today is experiential retailing.
 Changing Seen of Shopping
Shopping is changing
Shopping moved from being something of a
necessity to something of a pleasure,
To being a form of entertainment for some,
almost a pastime.
We are seeing the emergence of a new kind of
place, a new kind of experience, a new form of
destination
The experience retail destination
 Changing consumer
behaviours
The drive towards experience retail is being
fuelled by changes in consumer behavior,
Research shows that consumers now regard
shopping as a form of
leisure and entertainment &
looking to spend more time in places which offer
them a mix of experiences:
leisure,
entertainment,
sports,
cultural facilities and
even access to heritage attractions in one centre or place
They want to accomplish more in less time;
that as shopping evolves into an experience
 Changing consumer
behaviours
Retail is becoming part of the
entertainment industry;
industry that shopping is a
way for people to express themselves and
associates people with desired lifestyles;
that witty aspirational brands are
becoming more important;
that bricks are becoming a more
important retail marketing channel and
the physical retail experience should be
entertaining and authentic.
 Changing consumer
behaviours
People face the paradox of increasing time
pressures and expanding choices.

Youth are increasingly looking for multiple

experience settings,
settings shopping thats more
like entertainment, and places to hang out
with friends and family.
 Growing Importance of Hedonic
Consumer
Consumption Desire for
Experiences
Consumers affluence & shopping patterns
People are spending more money on
experiences & products/services that evoke fun
and reflect their individuality
and lifestyle.
Examples??
Also, people want to be entertained and receive
emotional stimulation throughout the shopping
process, not just through purchasing the goods.
 Consumer Desire for Experiences,
The Symbolic Role in Consumption
cont
Objective entities vs Subjective symbols
Symbolic consumption pertains to the purchasing of
brands,
licensed products, signature merchandise, and souvenir
merchandise.
Symbolic consumption increases revenues for retailers
Why??
Coca-Cola and Disney capitalized on each others symbolic
brand heritage when Mickey Mouse appeared on packs of Coke.
The Need for a Total Consumer Experience!!
Consumers who visit restaurants, a restaurant with a
historic designation, are motivated by preferences for
history, culture, and sightseeing
Consumer Desire for
Experiences,
Creating an experience for consumers is
more important than ever
cont

The product is not enough anymore!

Why???
Consumers are more knowledgeable
and have begun
to expect great products & great
experiences.
The abundance of competitors
 Experience retail is a new form of
retail place
place
A destination where the main driver or attractor is a retail
component supported by a combination of activity
attractors designed to drive sustained footfall to it.
Its a form of development where the overall experience
on offer for consumers is a place to spend time and
money on a mix of experiences.
The mix can include :
retail,
leisure,
entertainment, cultural, heritage&
sports attractions.
It may include a mall /hotel combined with a cultural or
sports attractor, - a museum, theatre or a stadium, and
perhaps a commercial office element.
It can also be a place where people may wish to stay
overnight to experience the full menu of attractors,
facilities, events and programms.
 Engage with Experiential
Retailing
Age of commoditization, consumers shift focus from
product attributes to experience obtained while
using

More relevant, memorable sensory experience =

higher value, worth, and price
Engaged, involved, have relationship with
product, brand, company
Experiential is never a commodity

Experiential = differentiation/competitive
advantage
 Engage with Experiential
Retailing
Many retailers are trying to increase customer
store visits by making shopping fun and
entertaining.
This can be seen in the hospitality sector where
more and More restaurants are starting to add
additional incentives or
perks in order to bring in more customers.
Kids eat Free
Live Music on Thursdays
Theme nights
 Definition
a strategy that transforms products and services into a
total consumption experience including aspects that are
both utilitarian and hedonic.
Utilitarian : Having regard to utility or usefulness rather
than beauty, ornamentation, etc. Also, can mean
practical, useful, functional, sensible.
Hedonic
Hedoni : of, characterizing, or pertaining to pleasure

Consumers expectations are becoming greater; they

have begun to demand services where they once may
have merely expected products and transactions
 Definitions

ER is a retail strategy that transforms products

and services into a total consumption
experience. (Kim,Y., Sullivan, P., & Forney, J. C.
(2007).

It satisfies emotional or expressive (hedonic)

desires, as well as rational or functional
(utilitarian) needs of the consumer (Kim and
Sullivan, & Forney, J. C 2007, p. 3).
For consumers with money, and even those on
The evolution of the retail
temporarily reduced budgets, shopping is
experience
becoming more fun than run.
Consumers increasingly desire experiential
pleasure and feel-good sensations from
consumption and are spending more money on
quality experiences than on material goods.

To address this trend, product manufacturers

have recognised that they need to offer
consumers experiential sales environments,
The evolution of the retail
experience
Retail development must offer consumers (who are
becoming ever younger) an authentic and entertaining
environment in which to find, try on, buy, wear and display
goods alongside a complementary and relevant mix of
attractors and lifestyle experiences, if they are to be
attracted to spend their time and money there.
Evidence indicates that such places are also offering a
public realm, in-store or in the mall that acts as a setting
for new forms of public art and sculpture and as a stage
for people to show off what they have bought and for them
to listen to or participate in live music, drama and dance
events.
The implications for developers are that shopping centres
will need to include leisure and entertainment and sports
offers and that shopping centres will be more like
integrated, urban entertainment centres with high-quality,
well-managed, and active public realm.
 Experience retail
Is a much more sophisticated offer to
consumers of a place where they can
satisfy:
many of their needs,
wants and aspirations for the products,
services &
experiences that they require for their
lifestyle and self-image.
key concepts that are vital to the creation
of experiences:

Interrelated moments the occurrence of

individual or multiple events.
Brand operations the core competencies of a
company.
Customer expectations conscious and
subconscious consumer needs, wants and demands.
Interactivity communication and collaborative
exchange.
Engagement intended rational and emotional
responses, and involvement.
 Experiential retailing
contribution
It combines very innovative forms of delivering the
retail experience together with the
leisure,
entertainment and culturalexperiences that
consumers want or aspire to &
increasingly, the residential lifestyle they aspire to
as well.

Contributes the value added to the purchase,

differentiation in the market place, and repeat
patronage.
The driveway decision.
 Experiential retailing contribution
Experiential retail turns the mere purchasing of
products / services into an enjoyable shopping
experience through the use of:
extravagant store environments,
technology,
various interactive facets,
highly trained staff, and
entertainment.
It creates a total consumption experience that causes
consumers to become immersed in their shopping
venture.
Retailers employ thematic, lifestyle, and
branding retailing into the experiential format to
attract customers.
Experiential retailing
contribution
In the delivery of service in the retail
environment, it provides more personal and
higher quality service.
Staff really do know about
the products they are selling (often modeling the
clothes themselves), who designed them, and
where they are made.

They are backed up by the latest

technologies, like the dressing cubicles with
built-in, time-delayed cameras which can
show you how the dress or the suit looks from
behind.
How can you incorporate
Think how you may create
experiential retailing in your
Shopping adventure
store?
Leisure
Learning
Family time
Sensory (taste, touch, sight, sound, smell)
Market Environment for Experiential
Retailing
A system of market environments influences
consumer demand-driven experiential retailing.
Cultural
Technological
Economic
Political
Social
Physical
 Retail has changed forever
Today's dynamic marketplace has a
new driver: the consumer.
More than ever before,shoppers have
control over where, when and how products
and services are purchased.
What was once a relatively homogeneous
middle class, living relatively similar lives,
has rapidly segmented into a diverse
society comprised of individuals who
prioritize self-expression over
conformity.
 Retail has changed
forever
The physical store environment now accounts
for a greater percentage of purchase decisions
in many retail categories than before the advent
of the Internet.

Recent surveys indicate that up to 75% of all

purchase decisions are now made in the
physical store.
And these decisions emanate from far more
educated consumers who arrive at stores armed
with information gathered online and who expect to
be able to shop in the way they desire.
Retail has changed forever
The retailers that give consumers what they
want will ultimately win both the business
and their loyalty.
Despite overwhelming evidence that the
consumer experience is the single
most important factor in continued
growth for manufacturer and retail
brands alike, it has remained ill-
defined
and, with a few notable exceptions, ignored
by both.
Retail has changed
forever
Everything matters: but consumers matter
most
To make things even more challenging, every
aspect of retailing appears to be of simultaneous
importance to success in today's marketplace.
Store Environments matter more than ever,
too.
Having squeezed every available dime out of
other aspects of the value chain, the physical
store environment is the "last frontier" for
alleviating downward pressure on price and
improving brand relevance
 Retail has changed
forever
It is the store, not the ad, website or catalogue, wherein the
consumer comes face-to-face with
most products and services, and where the brand promise
first established in these other
communications and selling channels has the most
profound opportunity to deliver on its promise.
Despite these facts, the discussion still appears to be
focused on operations.
operations
Experiences also matter more than ever, given that
59% of consumers say they have all the
material possessions they need, according to a
recent WPP survey.
Consumers report that, as they age, their needs have
been increasingly met, but their wants
escalate. Rather than through physical products,
these wants are being fulfilled by intangible
experiences.
Retail has changed
forever
Today's most compelling products such as the
iPod enable and facilitate experiences
rather than merely delivering function.
But consumers matter most of all. Much to
the dismay of operationally focused
retailers such as The Home Depot, Wall Street
is beginning to reward retailers such as Lowe's,
Best Buy and Target, which are considered by
many to be more consumer-centric.
Market value is increasingly being
determined by the number of consumers a
retailer owns, not by the number of doors
or where they're located.
Consumercentric retail
experiences are:
"Interrelated moments that occur when a
brand's operations align with customer
expectations to elicit interactivity, as well
as rational and emotional engagement.

Focus on the in-store experience increases

frequency and dwell time and, in the
process, increases sales, profitability and
long-term loyalty.
Consumercentric retail experiences
are:
Consumer Electronics, more than the other
three product categories studied (apparel,
grocery and home furnishings), is
associated as much with leisure as
with practicality, and at first glance,
seems to lend itself to a more emotional
shopping experience.
The full experience retail offer envisioned here
places that combine pleasurable shopping
experiences with indoor and outdoor sports,
Where can and
leisure, cultural you find
entertainment facilities,
catering for families, singles and special
experience
interest groups asretail
well, possibly with hotels
and residential accommodation in the mix -
has not yet been fully realised,
realised
but there are examples of its principal elements
being combined in different locations around the
world.
How Experiential Retailing Can
Differentiate a Brand
customers have outgrown the typical retail
environment, which tends to bombard shoppers
with a lot of the same kinds information. Because of
this, brand differentiation is often compromised.
ER reorganizes the shop environment to be focused
on the individual customers energized interaction
with the store space, the products, the broader
community and, by extension, the brand.
It make shopping more vivid so that the customer
will spend more time in the store, spend more in
general, and spend on the retail experience itself.
Social shopping
Social shopping, where shoppers involve
others in their experience, is one of the
major themes being trialled and embraced
by multichannel retailers.
Augmented reality (AR)
Augmented reality (AR) technology generally
overlays a computer generated view over the real-
world environment, making it particularly useful for
large purchases and fashion where consumers
desire to see if an item suits them or their
environment before purchasing. Tissot is a great
example of AR success - using its pioneering touch
screen, shoppers have been able to virtually try on a
3D watch
IBM is one company working with retailers on AR by
testing its mobile application that can be used by
shoppers to gather more information about products,
something they would normally look for on the
internet.
How Experiential Retailing Can
Differentiate a Brand
If the shopping experience can be elevated
above the norm, a brand will be more
memorable. Here are some strategies that
fuel experiential retailing:
The staff are elevated through the use of
titles that are more enlightened sounding
than Sales Associate.
The physical design of the retail space
encourages lingering.
Socially integrated technologies let shoppers
browse inventories with a sense of play.
 Brands Using Experiential Retailing
The Apple Store
The Genius Bar offers hands-on troubleshooting where
customers can interact with friendly, Apple-trained technical
experts at a uniquely designed space in the store. This educates
customers and encourages them to linger in the store before
and/or after appointment times.
The Body Shop
The Body Shops experience based stores are in their trial
stages. They include hand massage tables where shoppers can
have staff-facilitated conversations about broader issues,
Community Walls with petitions for social justice campaigns, and
low-to-the-ground furniture that encourages shoppers to hang
around.
Adidas
Adidas adiVerse Virtual Footwear Wall lets shoppers browse
extensive inventory through a sleek interactive touch screen.
Build-A-Bear Workshop
Build-A-Bear Workshop provides a magical retail environment
where customers collaborate with a Bear Builder to create a
 Apple store which has changed the
landscape of how we shop these days.
There is no central cash register, but
instead stores have roaming sales
assistants, an interactive genius bar and an
EasyPay self-checkout. It makes much
more engaging experience and Apple Store
has become destination in a shopping trip.

Brands Using Experiential

Brands Using Experiential
Retailing
Last year, Fiat recognised this and
launched Fiat Click car showrooms within
UK shopping centres which enabled people
to browse a car and then order it online.
Test drives were even available to book
online and cars could be delivered to
people, anywhere. So in effect the Fiat
dealership was removed from the entire
purchase process
 Nissan is another brand which has embraced
experiential marketing. The Nissan Innovation
Station, managed and staffed by TRO, is a fun,
interactive brand experience. The brand center is
designed to make the future of motoring come alive
and engage people who would not necessarily
choose to visit a dealership.
With its interactive games, virtual experiences,
drive simulators and personalized gadgets, theres
literally something for everyone, while Nissan can
succinctly communicate the story and personality
behind the brand.
A woman uses her mobile phone to
buy a product at a virtual retail shop
Strategies for Experiential
Retailers

Experiential retailing exists everywhere!!

Design of Stores, Malls, Hotels, Restaurants,
Theme Parks, etc.
Many retailers include entertainment or unique
themes in their
retail mix.
The mall of the future??
Strategies for Experiential
Retail Strategies to Create a Total Consumer Experience
Retailers,
Entertainment- or theme-based retailing
Attracts tourists ; shopping & dining are the most popular
activities cont
Value retailing
Value retailers provide utilitarian benefits such as low price,
convenience, and wide assortments of products.
Brand extension
Brand extension introduces a companys brands into new product
categories.
Strategic alliance
Strategic alliances are created by combining two or more brands
in one
product (or service) or a set of products (or services).
The Next Step for Retail Strategies
Challenge s for Retailers in the New
Millennium
In other countries, retailing has reached a
level of maturity.
Consumers are demanding consumption
experiences that bring emotional rewards.
Traditional models that focused on product
assortments in retail outlets provide limited
insight into why consumers may be bored
with their shopping experiences.
Central aspects of ER
 Conclusions
Experience retail will be a major form of
development over the coming decade.
It has the capability to revive many flagging
town and city centres and return them to
being places in which people will want to
spend time and money.
Experience retail developments will change
the offer of the places in which they are
located, change the nature of the
experience offered to consumers& change
their branding as destinations.