Why shopping is about to become all about the experience

Why shopping is about to become all about the experience

In years to come, the Black Friday spectacle of throngs of shoppers scrambling past each other to ransack shelves of flat screen TVs, might look very different.

Shopping may be about to undergo a dramatic transformation. Within the next decade it could change into an activity driven entirely by experiences and interactive technology rather than the act of buying. Think pop-up shops on steroids; places where you try things on or test products in person but don’t actually make any purchases.

Last year online sales grew by 15% in Europe and north America and a similar increase is expected this year

This rise in so-called ‘experiential shopping’ is in part a reaction to the growth of online shopping. Last year online sales grew by 15% in Europe and north America and a similar increase is expected this year. But this increasingly digital shopping experience means brands have fewer opportunities to meet their customers face-to-face and are getting desperate to connect. It is leading them to seek out new ways of reaching consumers.

Take the Museum of Ice Cream, for instance. It’s not a museum. It’s not a shop. It’s somewhere in between. Tickets to the series of bubblegum pink, ice-cream themed installations cost around $38 and have sold out in New York, San Francisco and Los Angeles.

Once inside, visitors are confronted with fun things to do rather than to buy – brightly-coloured, ice-cream themed installations such as a giant pool full of sugar sprinkles to jump into. 

“The way in which we are able to have our visitors physically, tangibly, sensually engage with brands has a return on investment that no ad could ever come close to,” Maryellis Bunn, who designed the experience, said in an interview with New York Magazine.

Bunn believes as more retailers move entirely online, their former shop fronts will be replaced by “experiences”.

Traditional bricks and mortar shops do appear to be disappearing in swathes. In the US, Macy’s, Sears, and K-Mart are closing the doors in hundreds of locations while in the UK Mark & Spencer and Debenhams are making similar closures.

Bunn believes as more retailers move entirely online, their former shop fronts will be replaced by experiences

But confusingly new stores, largely discount and low-end outlets, are opening too. In 2017 there will in fact be 4,080 more shops opening than there are closing, according to a report by the research firm IHL Group.

It is a complicated picture, but thinking of retail as either online or physical spaces, misses the point, says Steven Dennis, a brand strategy consultant. He believes shopping in the future will need to be both – an amalgamation of both online shopping and physical stores where customers move seamlessly between the two and personalised interaction with customers such as intuitive apps and immersive experiences, will be fundamental to success.

To understand how things will look, Dennis says we need to analyse how brands are already interacting with customers rather than just whether they are selling things online or in store. For instance, he says the idea of using stores purely as showrooms “has legs”. Shops like Story in New York, uses a rotating “gallery” of stock built around a narrative, such as a story about nostalgia for the 1990’s. This is connecting with people in a new way, he says.

Shops like Story in New York, uses a rotating “gallery” of stock built around a narrative, such as a story about nostalgia for the 1990’s

Similarly, Casper, the mattress firm, has rolled out “napmobiles” where potential customers can road-test the foam mattress inside a refurbished camper van before purchasing one online.  

Brands that try to appeal too broadly to too many different people are failing spectacularly, according to Dennis. “You either need to pivot more towards the Amazon side of incredible convenience and great selection and low price or you’ve got to pivot to the other extreme, which is to be more special and remarkable and differentiated,” he says. 

Creating a destination

Plans from coffee giant Starbucks show this theory in action. In April, Starbucks chairman Howard Shultz told investors that any retailer who is “going to win in this new environment must become an experiential destination. Your product and services, for the most part, cannot be available online and cannot be available on Amazon.”

In October, it closed its online store, which sold branded coffee mugs, coffee machines and coffee. And now, the company is launching 1,000 “Starbucks Reserve” locations. The concept is a high-end coffee bar where patrons can see small batch coffee beans being roasted and taste “coffee flights”.

Technology company, Samsung, is getting into the experience game too, setting up customer care centres that double as well equipped remote work spaces. The company has partnered with co-working space WeWork to open three pilot locations in the US in Detroit, Miami and Williamsburg, NY.

The idea, says Mick McConnell, who is vice president of design at Samsung Electronics America, is to offer customers a functional workspace, complete with high-end mid-century furniture and video conferencing systems, so people can be productive while they wait for their devices to be repaired.

Even retailers that started out entirely online are moving towards creating locations where customers just try out their products.

Eyewear start-up, Warby Parker, which is valued at more than $1 billion, offered customers affordable, designer frames that they could try-on at home before deciding to buy, when they started out in 2010.

Seven years down the track Warby Parker has more than 60 retail locations across the US and Canada where customers pick stylish frames in strikingly sleek and trendy shops (The Portland location doubles as an old school video game arcade) with lots of personal assistance from staff on-hand to give advice about the perfect frame for your face.

But even if you do find a pair you like, you can’t bring them home with you. Instead, glasses are mailed to customers. The company already offers prescription services in some of its locations, and in October it launched an app that allows eligible customers to give themselves a vision test at home.

There is an estimated 800 million square feet of empty retail space in the US

Menswear store, Bonobos, has a similar strategy. The company started online but has opened physical stores across the US, which it calls “virtual stockrooms for the website”.

Customers are greeted by a “guide” who acts as a personal shopper, offering advice and recommendations, but the clothing on the racks stays in the stores, and purchases are mailed out from central warehouses.

There is certainly no shortage of space for this new form of experiential shopping. It is estimated that there is currently over 800 million square feet of empty retail space in the US. In the UK the proportion of all shops that have been empty for over two years has risen sharply to about one in 28.

Exactly what will fill these spaces remains to be seen, but with digital retail technology likely to continue disrupting the shopping experience, it is safe to assume that Black Friday could become more of an experience than a bargain hunt.

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Source : http://www.bbc.com/capital/story/20171123-why-shopping-is-about-to-become-all-about-the-experience

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