One of the most common misconceptions about retail today is that lean, online retailers are devouring the revenues of brick-and-mortar stores. While this may make for more compelling headlines, it doesn’t tell the full story.
In many parts of the world, the retail landscape is becoming increasingly divided. At one end of the spectrum, there are the retailers that prioritize large, diverse inventories and low prices—a business model best exemplified by Walmart and similar low-cost chains. At the other end, there are the high-end retailers that prioritize luxury goods and superior customer service. For those retailers, exclusivity is the primary motivation for their customers.
It’s those brands “in the middle”—the ones that can’t compete based on cost or luxury—that struggle to differentiate. And it's these same brands that can benefit the most from experiential retail.
What is experiential retail?
Experiential retail seeks to delight shoppers with memorable shopping experiences that can be shared. In many ways, experiential retailers aim is to create communities around their brands.
As customers become more selective about the brands they shop with, the in-store experience needs to stand out from the pack. The catch? It can’t be gimmicky and forgo the transactional element entirely. At the end of the day, shoppers are still there to buy.
“The best kind of experiential retail are the experiences that are repeatable—not one-off gimmicks, where you take an Instagram selfie and call it a day. Meaningful experiences are where you want to go back time after time after time because the service is great, or you have a relationship with the person who works there. Repeatable value that’s different from your online experience.” — Arpan Podduturi, Director of Product, Shopify
Navigating experiential retail is tricky, so in this post, we take a look at four high-profile brands who do it best, and unpack what makes their experiences effective in terms of driving foot traffic, increasing sales, and building long-term loyalty.
4 examples of experiential retail (and takeaways)
While many experiential retailers adopt similar strategies to provide superior shopping experiences to their customers, there’s a great deal of variance from one retailer to another. The qualities the following retailers share, however, is a commitment to creating authentic, human, and immersive experiences that align with their brand values and product offerings.
Allbirds: Selling “the comfiest shoes on the planet”
Footwear is one of the most lucrative and competitive verticals in retail. In a multibillion-dollar industry dominated by entrenched incumbents, new entrants in the footwear market are uncommon—which makes footwear retailer Allbirds’ success all the more remarkable.
Many of Allbirds’ shoes are constructed from a superfine merino wool sustainably sourced in New Zealand. In the early days of the company, many consumers were intrigued by the unorthodox material. This created opportunities for Allbirds to create a narrative surrounding its products, highlight how and where the company sources its materials, and start conversations about the sustainability of the fashion and apparel market—all of which have become central to the company’s brand.
Allbirds didn’t just want to sell “the comfiest shoes on the planet.” It wanted to redefine the entire experience of buying a new pair of shoes.
“Consumers want to understand the product and the materials. They want to have transparency into the supply chain. They want to trust the brands they support to do something more.” —Tim Brown, cofounder, Allbirds
Allbirds began selling its shoes online in 2016 and opened its flagship retail store in San Francisco in May 2017. Opening retail stores wasn’t just a way for Allbirds to increase its physical footprint—it gave the company a way to interact with customers directly and provide the kind of shopping experience that few other footwear retailers can offer.
The company’s stores are as minimalistic as Allbirds’ footwear. Select pairs are wall-mounted throughout Allbirds’ stores, showcasing the company’s newest designs without overwhelming customers. The shop floors are similarly roomy and allow customers to browse at their leisure.
This also gives Allbirds’ sales associates the opportunity to answer customer questions and tell people about Allbirds’ products and brand values as they shop. Allbirds’ New York location even features a “service bar,” where customers can take their time in finding the right size.
The result is a relaxing and educational experience that goes beyond the clinical nature of most shoe stores. The company’s retail locations have proved so popular that Allbirds plans to open an additional 20 stores in 2020, many of which will be located across the U.S.
Showfields: “The most interesting store in the world'“
While some brands might think that consumer interest in department store shopping is waning, Tal Zvi Nathanel, CEO of experiential shopping destination Showfields in New York City, sees the department store concept as a way to bridge the gap between physical retail and ecommerce.
Launched in 2018, Showfields is a four-story building located in Manhattan’s NoHo (North of Houston St.) neighborhood that boasts almost 15,000 square feet of retail space. Showfields aims to make it easier for digitally native retailers to expand into physical locations. The goal, however, isn’t necessarily solely to increase sales but to enable online retailers to connect with their customers in a more meaningful way in the real world.
“We don't buy products today, we buy stories, we buy missions, we actually define ourselves by the products that we buy today.” —Tal Zvi Nathanel, CEO, Showfields
Showfields is among the latest examples of the “new retail” movement—sometimes also referred to as c-commerce, or collaborative commerce—that seeks to redefine physical retail. Showfields’ retailers occupy pop-up spaces for between four and six months. Each floor of Showfields is designed to flow seamlessly from one brand to the next, and each floor is interspersed with art installations and intentional community spaces. The result is a uniquely contemporary take on the idea of the traditional department store—an idea that could gain traction elsewhere in the coming years.
New retail concepts such as Showfields don’t just provide digitally native brands with the opportunity to expand their presence into the physical world; they also align with changing consumer expectations for more memorable retail experiences that offer shoppers something more. As competition across the retail landscape intensifies, consumer expectations are likely to become even more demanding—a challenge that concepts like Showfields are ready and willing to tackle.
Mejuri: Exploring the evolution of a brand
In late 2019, direct-to-consumer jewelry brand Mejuri opened a 2,300-square-foot pop-up retail space in the Chelsea district of New York City to commemorate the brand’s fifth anniversary. However, unlike most pop-ups, Mejuri’s temporary space didn’t just offer shoppers the chance to buy some of the brand’s most popular jewelry; it also invited fans to explore the evolution of the Mejuri brand—literally.
The Mejuri Vault was the brand’s first experiential pop-up and ran from November 23 to December 22. The space itself featured a winding, maze-like structure that allowed shoppers to quite literally explore how Mejuri’s most popular product lines have changed over the years. After making their way through the glittering twists and turns of the pop-up’s maze, shoppers had the chance to purchase jewelry from three of Mejuri’s most popular themed collections: diamonds, the tarot, and the zodiac.
The Vault was created to be an immersive experience. Each of the space’s individual rooms featured unique decor, music, and ambient lighting, creating spaces that showcased the brand’s separate narrative collections. The installation encouraged visitors to share their experiences via social media and offered shoppers a uniquely tactile way to interact with the Mejuri brand and its products.
Lululemon: The power of community
In 2018, athletic apparel retailer Lululemon held more than 4,000 events across its 460-plus locations around the world. With more than 17,000 brand ambassadors worldwide, Lululemon already enjoys the kind of customer loyalty that would be the envy of many companies. Now, the brand is expanding further into the realm of experiential retail by focusing on creating community spaces where like-minded fans can pursue their fitness goals.
Lululemon opened its largest retail location to date in Chicago’s Lincoln Park neighborhood in July 2019. But the 20,000-square-foot space is more than a huge store. The location features a range of amenities that blur the already-thin line between Lululemon retail stores and fitness centers: a restaurant serving a wide range of healthy meals and snacks, including smoothies and vegetarian Beyond Meat products; workout studios; a meditation center; and retail space selling popular items and Lululemon merchandise unique to the Lincoln Park location.
Many retailers have experimented with introducing additional amenities into retail spaces, including restaurants and gyms. Lululemon’s approach, however, is unique in that the brand’s Chicago location allows guests to try on Lululemon garments during their workout. This enables prospective customers to put Lululemon’s activewear through its paces in an actual exercise environment before committing to a purchase.
“The brand is highly authentic, encouraging employees to get out into the fitness and yoga world and do meditation in-store. This move seems like an extension that, if it continues to be authentic, will expand the brand to new venues, new customers, and new platforms.” —Mark Price, Managing Partner, ThreeBridge
The company has ambitious plans for its retail locations in the future and estimates that 10% of its total retail footprint will be primarily experiential by 2023.
Experiential retail ideas for small businesses
Many of the most innovative retail concepts are being pioneered by large brands with larger budgets. Although companies like Lululemon may be in a more advantageous position than smaller retailers, this doesn’t mean that smaller businesses can’t offer their customers meaningful retail experiences. Below are some creative ways that Shopify’s retailers have created memorable in-store experiences, without breaking the bank.
Pop-up stores have become increasingly popular in recent years, but smaller retailers may still find it challenging to launch a pop-up shop on a budget. Opening a pop-up shop for just 30 days can cost more than $30,000, putting this effective means of reaching new customers beyond the reach of many smaller retailers.
One potential alternative is to launch a pop-up truck instead.
Agencies such as Pop-Up Mob specialize in creating bespoke pop-up experiences for smaller retail brands. Pop-Up Mob worked with jewelry brand to create a pop-up truck to coincide with the Art Basel festival in Miami. The golden classic Volkswagen van conversion featured a number of items from Bittar’s collection and encouraged visitors to pose for selfies with the vehicle between shows. Merchandise was also available for purchase from the truck.
Two of the most significant advantages pop-up trucks have over their storefront counterparts are timeliness and mobility. Alexis Bittar’s pop-up truck was parked strategically outside the Faena Hotel in Miami Beach’s historic district during Art Basel Miami. This allowed the brand to leverage the considerable foot traffic created by the event and appeal to a wide range of prospective customers between exhibitions during the festival, which routinely attracts tens of thousands of people every year.
The van became something of an art installation in its own right, which blended retail, brand evangelism, and artistic expression into a uniquely memorable experience.
Many retailers run events for members of their local communities. One way to take this idea one step further is to make a retail space available for individuals who could benefit from a place to meet. This is exactly what camera accessory and bag retailer Peak Design did when it made its flagship location in San Francisco available as a co-working space for artists.
Every Wednesday between 1:00 pm and 5:30 pm, Peak Design’s showroom / low-inventory store becomes a co-working space for local photographers, artists, and other creatives. One benefit of Peak Design’s co-working initiative is that it positions the store as an ally to artists and photographers in the area, many of whom could become Peak Design customers in the future. It creates a place for creatives to discuss their work and share ideas, both of which can be difficult to do in isolation.
It also solves an urgent need in the artistic community. Co-working spaces may be plentiful in the Bay Area, but costs can be prohibitive to freelancers and working artists who may lack the financial means to afford a more traditional coworking membership. Making its space available in this way aligns closely with Peak Design’s core brand values of inspiring positive change and being a conscientious member of San Francisco’s creative community.
Supporting charitable causes
St. Frank’s co-founder and CEO, Christina Bryant, describes the brand as a for-profit business with a social mission. The company imports artisanal, handcrafted goods from over 25 countries around the world, which are then sold on St. Frank’s ecommerce site and in-store at its San Francisco location. However, unlike some larger retailers with similar products, St. Frank aims to create ethical, sustainable, long-term relationships with its artisans to strengthen local communities in developing nations.
Since opening its flagship retail location in San Francisco in 2015, St. Frank has opened several additional locations around the United States, including Palm Beach, Florida; Pacific Palisades, California; and East Hampton, New York. Each St. Frank location hosts customer charity shopping events, from which part of the proceeds are donated to a non-profit chosen by the customer. This advances St. Frank’s mission of supporting charitable causes and gives its customers the opportunity to take a more direct role in how that support is dispersed.
“We’ve been educated as consumers around this ‘get big, give back’ model of a Warby Parker or a Toms, where it’s ‘If you purchase, we’ll donate something’. I think that’s awesome." —Christina Bryant, Co-Founder/CEO, St. Frank
In-store co-branding initiatives
For some brands, even something as seemingly conventional as an in-store co-branding initiative can become an experiential event. This is the approach that luxury accessories retailer Senreve—which takes its name from the French words for “sense” and “dream”—took when it hosted an in-store co-branding retail event with fine jeweler Aurate at Senreve’s San Francisco location.
Before opening its flagship location in San Francisco, Senreve showcased its designer bags at “pop-in” events at curated retail spaces, such as Fivestory New York. After opening its own store, Senreve began hosting pop-ins of its own, including an in-store co-branding initiative with Aurate, one of Senreve’s many brand partners.
At first glance, it may appear that pop-in events have little in common with some of the innovative examples of experiential retail above. However, the experience comes not from the nature of the pop-in event itself but in the curation of complementary goods sold by retailers that share similar missions and brand values. The fact that there is significant overlap between Senreve and Aurate’s target markets means that the two brands complement one another effectively and offer shoppers a more complete lifestyle retail experience.
Educational events have become increasingly popular as a way for retailers to spread awareness of important issues as well as their own products.
Fellow is one brand seeking to help its customers understand more about their cup of joe, as well as the greater supply chain that brings it to their kitchen. Fellow offers a range of products designed to help coffee lovers brew the perfect cup at home. The brand’s pour-over kettles have proved extraordinarily popular with coffee enthusiasts and professionals, alike.
And they’re eager to share this expertise with the public. At the Fellow Store + Playground, their flagship San Francisco retail store, they offer short demos and tastings as well as in-depth classes on advanced brewing techniques taught by guest master brewers. These events provide customers with an experience that teaches them more about coffee as a commodity and introduces them to Fellow’s extensive range of products.
Fellow’s model is monetized, too. For three dollars, store visitors can sample a coffee of their choice using Fellow’s products. The result? About a quarter of people who do the demo end up purchasing something.
Fellow’s workshops and classes are a great example of how experiential retail can be applied in simple ways. Many people are familiar with the basics of brewing a cup of coffee, but Fellow’s classes elevate the experience from a simple demonstration to an engaging, educational experience with like-minded coffee aficionados. It also helps strengthen Fellow’s brand as a company that’s as passionate about coffee as the participants in its workshops.
Evaluating the success of experiential retail
Although in-store sales is among the most common metrics of success in brick-and-mortar retail, focusing solely on sales or revenue fails to take other factors into account.
Positive shopping experiences create lasting ROI for retailers. Consumers want to feel valued and will reward retailers that work hard to earn that loyalty. Brick-and-mortar retail is all about the connections. Today’s consumers have higher expectations than ever before, and unified commerce is quickly becoming the new standard because it delivers the experience shoppers expect and ensures every sales channel works in harmony with every touchpoint enabling the other.
Experiential retail isn’t a passing fad—it’s the future of how, where, and when we shop.