The Challenge: how can retailers convert enjoyment into sales?

Amazon’s inextricable march to retail dominance is on course to gain a 50% share of all e-commerce sales in the US by 2021. The power of transactional, value-driven convenience is never in doubt. However, reassuringly for physical retail, recent stats on Generation Z’s appetite for the world outside the walls of cyber reality appears healthier than one might be led to believe. According to research 60% of Generation Z, who by their very definition are digital natives, prefer to purchase in-store. The future of bricks and mortar is not in question, what can be questioned is the speed of adoption and the will of retailers to successfully transition to the new shopper life-styles.

Experiential Retail is playing an increasingly important role in the measure of ‘Shopper Enjoyment’

So what constitutes the customer ‘need’ emerging in the new shopper lifestyle? The answer lies in the increasing value society is placing on lifestyle and experience, paradoxically, fuelled and promoted by social media. It has been said that ‘experience’ is becoming valued as an equal or an alternative to ‘ownership’.

This truth can be observed in statistics indicating the increasing importance that experiential retail plays on the measurement of ‘shopper enjoyment’. This trend is improving performance across an ever-increasing range of retail categories, beyond the traditionally engagement based health & beauty department. Categories seen to be adopting more experiential activations, include: food and grocery, clothing, footwear and electrical.

Digital Relevance

It is worth noting that the new shopper need-state is one of the paradoxes of modern life. With the increase and convenience of digital interaction our lives are becoming increasing time-poor. Somehow the convenience of the digital screen that holds our gaze – from the first moment we wake to the last thing at night – is not freeing up more time for us. This dichotomy is feeding the desire for more tangibly real ‘human’ interactions - a search for something real and sensory that we can touch, taste and feel.

The irony is that retail experiences, whether it’s in the store, coffee shop, pop-up shop, food-hall or the diner, still provide us with the necessary wi-fi to indulge our insatiable gaze into the life’s alternative matrix. What is clear is that the retail experience has to embrace digital, but not for digital sake! Customer relevance has to be king, with a combination of the emotive and the functional.

Creating a ‘Fan’ Not Just a Consumer

A recent event in the retail world that tells this story all too starkly is the demise of Toys R Us. While other famous toy brands like Lego and Hamleys gain brand efficacy through championing the store experience, Toys R Us remained passive in developing the store engagement. The lesson learnt is the one constant that always remains, namely the necessity to quickly move the retail space into the destination place. As soon as your customers become fans and crowd your shop floor, then progressive brand success is assured. As with Lego, when you observe half your customers in store are using their phone cameras to capture the latest displays, then the indication is that store advocacy is on track.

Merging the Worlds of Digital and Experiential

Let’s take a look at the principles of merging the worlds of digital and experiential. Firstly, the digital experience must not prove a hindrance to the customer’s path-to-purchase. Unnecessary complexity introduced via innovative technology is proven to turn customers off, or to simply find itself ignored.

In Part II we’ll be looking at some examples of the best innovations in retail experiential activations throughout 2017 and 2018.

James Hale, group creative director, Lick Creative