By now it’s clear that brick-and-mortar retailers as a whole are not destined for extinction, but the landscape has shifted under their feet in response to online retail and new consumer expectations. Those that are evolving to the new world order are more and more turning to experiential marketing in retail spaces to attract consumers back to shopping districts — and the digital technologies that once seemed to pose an existential threat is now infusing life back into the brick-and-mortar world.
Group Delphi’s experts in experiential marketing trends in retail environments weigh in on the changes they’re seeing in the space — and the ones they expect to see more of in the next year.
For brick-and-mortar retailers, adapting to today’s retail landscape means reassessing how the retail space is used.
“Experiential is becoming much more at play,” says David Salinger, Senior Account Director at Group Delphi. “Everyone now uses Amazon as a search engine to buy products. The game has clearly been changed on what a seller needs to fill up his or her physical space. So, when you move into offering experiences in-store, you’re stepping up with something online can’t provide.”
Among the more prominent trends in experiential marketing in retail, online-based retailers are launching offline showrooms to also provide in-store experiences.
“Even online retailers are catching on. Companies like Raspberry Pi have opened stores, offering kits for coders. Amazon Go and the Amazon 4-Star Stores are other examples of an online retailer manifesting itself into a physical space,” says Salinger.
Tech Out at Check Out
The tech-based companies aren’t just becoming brick-and-mortar retailers, they’re redefining the retail environment with tech-driven experiences, finding real-world applications for augmented reality and digital interactives.
Cosmetics giant SK-II recently opened a pop-up in San Francisco that embodies this new trend. Guests were treated to technologies like facial scanning for optimal cosmetics, all while indulging in product immersions via beauty treatments.
Likewise, businesses like Virtual Visions offer smart displays for retailers, allowing shoppers to check for inventory both in the store and warehouse.
This is good news for mom-and-pop sellers who are no longer obligated to keep their entire inventory in-house. As Brian Jeong, Business Development Executive for Group Delphi says, “It’s the retail industry 4.0. Stores can add to their inventory from 60 to 90 percent. There’s less display, more cash flow.”
Big Data, Big Innovations
New approaches with technology combined with consumer data are changing the way customers navigate physical spaces, find what they’re looking for, and make purchases. Grocery giant Albertson’s teamed up with Microsoft to “eliminate the friction customers experience at the grocery store,” through apps that can tell customers where to find items in stores, if items are in stock, and even pay for fuel purchases with a single tap.
Other technologies including AI, facial-scanning, and eye-tracking are finding applications in retail spaces. In these cases, the technology isn’t just being used for the immediate customer experience — it’s working to make future experiences better.
“Companies can now track the movement of customers through stores and offices to determine the most efficient use of space,” Jeong says.
Flagship Stores Set Sail
These trends — often because they require large investment and an element of risk — are most visible with the biggest brands, who have already gone all-in on the latest innovations.
Flagship stores from brands like Nike have already incorporated the use of smartphones in their spaces. Fashion retailer Barney’s is doing the same, offering apps to connect shoppers and personalize their shopping experience, while the store itself will be able to recognize in-house shoppers from their online activity.
These efforts are an attempt not so much to reverse the trend of shoppers opting for online over in-person retail as to make the two complementary. As Salinger observes, “Younger audiences accustomed to online shopping are making the effort to come into the store.” Innovations and bold experiments in experiential marketing in retail environments are becoming essential to the rebirth and growth of retail by changing the perception of what the retail experience is in 2020 and beyond.