Countless retailers spend millions on advertising and public relations to attract customers to their stores. But what if we told you that the key to building customer loyalty and driving sales not only lies in what happens outside your store, but inside it, too?
That’s where experiential retail comes in.
Experiential retail isn't just about creating a superficially engaging environment. It's about tapping into the human psyche to create an emotional connection with customers, keeping them running back to you instead of your competitors.
In this blog, we'll explore the key elements of experiential retail and provide you with five actionable strategies to take your retail experience to the next level:
How is Experiential Retail Different From Traditional Retail?
Imagine strolling into a traditional retail store to buy a backpack. You're greeted by row after row of identical-looking backpacks and a salesperson who's indifferent to your needs. Your experience is mundane and transactional, and it fades from your memory shortly after you leave.
Now, picture walking into an experiential retail store. You see fewer backpacks, but each one has been carefully curated and displayed with pictures and videos demonstrating their versatility. There's no pushy salesperson, just a friendly brand representative who invites you to try on different models and feel their comfort and durability for yourself. And, if you're really lucky, the store may even have a virtual or augmented reality system that lets you simulate climbing mountains or traversing different terrains with your backpack.
If you guessed the latter experience attracts more customers, you're right: in fact, 60% of consumers say they expect retailers to dedicate more floor space to experiences than products.
So, what's the key difference? Experiential retail isn't just about ambiance and aesthetics — it's about creating a community where customers feel valued, heard, and catered to. Unlike traditional retail, experiential retail isn't solely focused on making a sale, but on building relationships, earning trust, and creating loyalty.
Key Elements and Benefits of Experiential Retail
In a world where 88% of customers value the experience a company provides as much as the products and services they offer, retailers need to be a little more daring and a lot more creative to stand out.
In other words, they need to invest in experiential retail.
What makes experiential retail so effective is its ability to tap into customers’ emotions. When customers walk into a store or scroll through an ecommerce website filled with surprises, interactive experiences, and personalized attention, they feel special and appreciated. They're no longer just a number in the sales books, but an individual with unique interests, preferences, and needs. This is the kind of experience that people will talk about with their friends and family and, ultimately, inspire them to keep coming back for more.
Plus, experiential retail allows you to distinguish your brand in an unforgettable way. It goes beyond mere product displays to create immersive environments that engage every sense and tell a story. Blending technology and innovation, you can deliver a remarkable experience that cements your position as an industry leader and makes your customers feel like they're part of something truly unique.
To recap, experiential retail's benefits include:
- Creating one-of-a-kind, memorable retail moments that customers want to share
- Stimulating customers’ senses through touch, sight, sound, and even smell
- Defying customer expectations with powerful, personalized experiences
- Nurturing communities that make customers feel like they belong
- Inspiring brand loyalty and setting your brand apart from competitors
Five Experiential Retail Strategies You Can Implement
Now that we've explored how experiential retail can forge deeper connections with your customers and leave your competitors in the dust, let's dive into how you can apply it to your own brand:
- Analyze Your Customer Data
Your customer data is a goldmine of information. But are you using it to create shopping experiences that your customers love?
Analyzing customer data uncovers which platforms or channels your shoppers prefer and why, so you can use this intel to craft targeted marketing and promotional tactics tailored directly to those channels. You can even customize offers for specific user groups — like offering different promotions to long-time customers versus new customers — that show that you value their loyalty.
Getting even more granular, you can also create promotions based on purchase history and other customer behavior. Offering discounts on previously purchased products, or recommending new products based on browsing history, is the equivalent of saying, "We know you and we value you." Your customers will feel heard when they receive suggestions that are contextual and reflective of their shopping preferences, building brand engagement and sales.
Bottom line? Don't let all that customer data you're gathering go to waste. Put it to work with modern retail analytics software and create shopping experiences that your customers will rave about.
- Create Consistency with an Omnichannel Approach
Customers expect a cohesive experience when they interact with their favorite brands, whether they're shopping in-store or online. According to RetailNext, 40% of consumers purchase more from retailers that provide a personalized shopping experience across channels — so cross-channel consistency is a must.
So, how can retailers implement an omnichannel approach and create consistent digital experiences? The first step is to integrate all channels and data so customers have a seamless experience, regardless of where they engage with the brand. This might include everything from point-of-sale systems and inventory software to loyalty program information and social media analytics.
Another crucial factor in creating consistent digital experiences is ensuring that the branding, messaging and overall user experience are consistent across all channels. When every aspect feels the same, customers can trust that they're getting the same level of satisfaction and value, no matter where they shop.
- Bring the In-Store Experience Online
Shopping online has become the norm for most, but it can sometimes feel like you're missing out on the in-store experience. But with the help of AR/VR, gamification, and virtual assistants and chatbots, retailers are bringing that experience online.
For instance, virtual try-on experiences and interactive product visualizations offer customers a unique and personalized experience online that can rival the experience of shopping in-store. By seeing products in 3D or trying on virtual clothes, customers can easily visualize how they will look and feel in the products.
Gamification can also make shopping more fun and engaging by offering rewards for completing certain activities, while virtual assistants can offer personalized guidance and support on the customer's online shopping journey.
ThirdChannel's managed live chat, for example, matches people who are passionate about your brand to potential buyers, improving the shopping tenfold. In fact, a customer of one of our clients — the second-largest online retailer for lingerie, swimwear, and loungewear — said about the live chat:
"I fully expected the chat function to just be a robot, but Fie helped me find exactly what I was looking for. It was clear that she had an excellent understanding of the products and how they fit different shapes. It was really the next best thing to going to a specialty shop in-person."
- Elevate the In-Store Experience
The in-store experience is the centerpiece of experiential retail. It involves creating an atmosphere that both welcomes and engages customers, so they feel connected to the environment and the brand. This is achieved by using various techniques such as store design, product offerings, events, and technology to stimulate customer senses and create a seamless, enjoyable shopping experience.
An excellent example of this is Nike's House of Innovation store in Shanghai. The store features immersive experiences that set it apart from other retail locations. Visitors can use augmented reality walls to customize their own sneakers and test them out on a digital basketball court that tracks their movements and displays overall rankings. The space is not just a place to shop but a destination to have fun, try new things, and experience something unique.
- Embrace Retailtainment
"Retailtainment" — AKA, using your retail space for entertainment purposes — is a powerful tool for captivating customers. From workshops and classes to product demos, concerts, and even celebrity partnerships, there are endless ways to leave a lasting impression on your customers.
Take Haus Laboratories, the beauty brand created by Lady Gaga, for example. In 2020, Haus Laboratories partnered with Amazon to create a series of live-streamed “Haus Party” events where customers could interact with the products, learn new makeup techniques, and even participate in contests. The result? A fun, memorable experience that cultivates brand loyalty.
Pop-up shops or temporary installations like Nordstrom's "The Lab" concept are another innovative way to engage customers. Inside select Nordstrom stores, The Lab features rotating pop-up shops that are regularly updated to keep customers intrigued. The Lab also offers workshops, panel discussions, and product demonstrations that help foster community building and generate buzz around the Nordstrom brand.
The Missing Link in Your Experiential Retail Strategy
Creating a remarkable in-store experience is an art form. There's the perfect blend of data analysis, strategic omnichannel strategies, and eye-catching experiences that capture shoppers' attention and keep them coming back for more.
With ThirdChannel, you can ensure that your retail store is taking full advantage of this new way of building customer loyalty. Our cutting-edge analytics software will help you design personalized shopping experiences, bringing your online and offline channels together to create a seamless, consistent brand.
Are you ready to make your store a must-visit destination for shoppers? Schedule a demo with us today.