Experiential Retail: How Retailers Win Customers and Influence Millennials
You may not immediately recognize the term Experiential Retail, but you have certainly experienced it. At the most basic level, shoppers are already participating in experiential retail when they grab a food sample while wandering the aisles of the grocery store or when testing out multiple shades of lipstick before selecting a final color for purchase. A few savvy retailers are taking the experience concept much further and capturing the attention of that Holy Grail group of consumers: Millennials.
Forbes describes Millennials’ shopping behavior as “No longer passive. Millennials want to interact with brands, to co-create products and to participate in the brand experience,” and suggests that “Millennials today are looking for relevance and authenticity. They want to develop relationships with brands that deliver a personalized, customized experience. Brands that don’t understand and respond to these needs will fail.”
Indeed, this has been proven by one of the best specimens of retailers doing it right; Apple. Millennial shoppers in an Apple store are surrounded by people their own age and by slick, high tech products that promise to simplify their lives. Apple’s advertisements echo this appeal- they show young, hip iPhone users expressing their individuality by putting their phones to creative uses and even inventing their own apps to make their lives easier. Fast Company recently stated that “Today, a product or service is powerful because of how it connects people to something—or someone—else. It has impact because we can do something worthwhile with it, tell others about it, or have it say something about us.” This generational shift in ideals is affecting purchasing habits- at least 70% of Millennials have purchased a product that supports a cause and they’re more willing to pay extra for a product if it supports a cause they also support. Both TOMS and eyeglass retailer Warby Parker employ the “for each item we sell, we give one to those in need” approach, which has been a huge hit with this emerging group of shoppers.
With Millennials’ preference for experiences over tangible objects and consumer behavior turning increasingly digital, retailers are using their brick and mortar and flagship stores to focus more on creating a fully-immersed brand experience for the customer. The TOMS flagship store in Venice, CA provides an experience beyond just shopping for hip shoes; they offer coffee and lattes, baked goods, and plenty of seating and free Wi-Fi to perpetuate their image as not just a place to shop, but a place to hang out and to see and be seen. London-based Burberry recently launched their flagship store as a physical representation of their website, complete with the world’s tallest retail screen, performance stage, and clothing containing RFID microchips that when tried on by shoppers, transforms dressing room mirrors into screens that show how the clothes look on a catwalk. They have also done away with cash registers and equipped staff with iPads with credit card machines, similar to the checkout process at an Apple store. Menswear retailer Bonobos refers to their brick and mortar locations as Guideshops, where customers can have a beer while consulting one on one with a Guide. Purchases are completed online and shipped directly to the customer; the stores are solely there to offer a personalized and individual experience for their customers.
By using new technology and appealing to customers’ sensory experiences, forward-thinking retailers are effectively using experiential retail to form memorable and emotional connections between the customer and the brand to generate loyalty and influence purchase decisions.
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