The fashion and retail industries are all the buzz about experiential retail. What does it mean and how will it impact the industry?
What is Experiential Retail? It is generally it refers to a store in which stuff happens in addition to selling, and shoppers do things besides buying. The idea is that a retailer offers consumers a chance to buy an experience rather than just an object or service. As stated by NPD in their article, “Experiential Purchasing and the New Retail”, The consumer is buying a memory.
As consumers continue to migrate from shopping at brick & mortar retail store to e-commerce, it is becoming more difficult for fashion and retail brands to remain relevant.
The traditional idea of a retail or fashion brand providing products, services and environment may no longer be sufficient to attract consumers.
As fashion and retail brands expanded nationally and globally, they needed to localize their brand message while maintaining the integrity of their brand DNA. However, this is easier said than done. More often than not, over expansion of brands has cause their commoditisation.
At the same time, the consumer is now global. They can shop where they want, when they want and how they want. The millennial and generation z consumer came to age during the social media revolution which has changed the way they shop, who influences their purchase decisions, and what brands they purchase.
Luxury brands for example have traditionally focused on product, service and store environment in order to create an experience for their customers. Many of the same brands have realized that they need to become more experiential in order to engage and educate existing and new consumers. Several luxury brands have opened museums to educate their consumer on brand heritage, quality, design and workmanship. In essence, what makes the DNA of the brand.
This also serves as a fusion of brand, art and culture.
The department store is another example. It was once not only a place to shop but also a community center where the consumer could have an outing, meet friends and family, eat a meal, and experience what was new and exciting. It was a memorable experience. As markets become increasingly competitive and department stores became focused on bottom line profitability, they lost sense of why the consumer shopped at their stores.
The Department Stores became more promotional in order to remain commercially competitive but at the same time lost relevance with their customers. Consumers once looked to the leadership of the Department Store to bring them experiences. Today, the consumer is more independent and sophisticated than ever. They are spending more on experiences such as health and wellness, arts and culture, food and beverage, education, entertainment, technology and travel. Department stores must embrace this. One retailer that understands this is Macy’s. Macy’s recently acquired the STORY brand.
Other fashion and retail brands must also recognize that in order to remain relevant with their customers, they must once again become the leader in bringing experiences to their consumers.
President, Pilnick Associates LLC
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