How to Drive Customer Engagement Through Experiential Retail

The Power of Experiential Retail

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It’s been a wild two and a half years in the retail world. Lockdowns kept shoppers home, ongoing pandemic fears drove significant gains in ecommerce (and customer acquisition cost), and supply chain craziness has made for an interesting challenge. Now, inflation is the word. But customers are still showing up—retail spending is still holding its own despite rising costs.

But things are changing. Customers have more brand choices than ever. Stores look different. Companies are developing partnerships with brands. New players continue to enter the fray.

Consider the sheer number of DTC brands opening stores. Initially a decision by these brands to reduce customer acquisition cost, these brands have used their physical presence to build a community and create lasting impressions.

From flagships to shop-in-shops, customers have new options available. And it’s harder than ever to stand out. Over the past few months, we’ve explored the rise in digital native companies in the physical retail world. Today, we’re looking at what it means to create an unforgettable experience.

What is Experiential Retail?

When everything is available at the touch of a phone or the click of a mouse, customers have gotten used to convenience. Transactions have become… transactional. Relationships are harder to maintain. And even if the ecommerce world didn’t derail the world of physical retail, it certainly changed it.

Retailers need to be able to answer the following question: “Why should I come to your store?” For big box stores, the answer might be simple, vast selection and low cost. For luxury brands, the answer might be concierge service. But what about everyone else?

Defining Experiential Retail

This is where experiential retail can come in. Rather than simply offering a space, this mentality lives up to its name—it provides an experience. According to Shopify, experiential retail is defined as “the process of creating memorable shopping experiences for shoppers.” Sounds simple. But that could mean any good customer experience.

How Does Experiential Retail Differ from Traditional Retail?

Experiential retail does a bit more. Instead of simply being a positive shopping environment, experiential retail is built on being immersive, engaging, connected, and stimulating. Community-oriented, social, and organic, Lightspeed’s article offers nine ways experiential retail differs from traditional retail.

  1. Creates an immersive and shareable experience
  2. Prioritizes customer engagement—not sales
  3. Helps nurture communities
  4. Inspires new approaches
  5. Stimulates your customers’ senses
  6. Take an omnichannel approach
  7. Defies customer expectations
  8. Leverages in-store events and services
  9. The store experience addresses consumer needs

Is a Pop-Up Experiential Retail?

A few months ago, we explored the basics of pop-up shops and considerations for brands looking to open one. In these, we explained how brands can use pop-up shops to nurture communities, defy expectations, create a sharable experience and more. So these are experiential retail, right? Yes… Well, sometimes.

Pop ups can be—and generally are—great examples of experiential retail. But they don’t have to be. A pop-up could simply be a temporary store. It might be an opportunity to test a market or product. It doesn’t have to do something wild or memorable. But often, these provide great examples of a brand focused on the experience instead of just selling.

The same goes for flagships. Your flagship could have space dedicated to engagement and community—like the new Harry Potter Store in New York City, The Sill’s workshops or The Dreamery by Casper’s nap pods. Though each provides a way for shoppers to learn about products, they also are immersing themselves in sights, sounds, and values of the brand.

Why Embrace Experiences?

From new players to the retail environment to established brands, there are always ways to help customers engage. And it could often be as simple as a workshop. But it could also be so much more. Here are just a few reasons to dedicate space to experiences.

Shoppers Crave Experiential Retail

From having something cool to share on social media to feeling an authentic connection with a brand, experiential retail is often a profitable experience. And shoppers are starting to expect this from brands, with a wide range of data supporting this:

  • 60 percent of consumers expect retailers to dedicate more floor space to experiences than products—and 81% of consumers are willing to pay more for experiences that upgrade the shopping experience. (Westfield)
  • 35 percent of shoppers plan to engage with brands in the coming year. (Forrester/Shopify)
  • 86 percent of consumers believe it’s important that brands lift their mood and make them feel better—and 70 percent want an experience where they can laugh and have fun. (Momentum Worldwide)

Returning Customers and Longer Stays

In a recent Retail Touchpoints report, experts discussed the current retail landscape, highlighting the emerging landscape, the replacement of channels with experiences, and the importance of consistency across all touchpoints.

But one portion of the report stood out—Ethan Chernofsky, VP Marketing at Placer.ai’s segment titled Three Ways for Retailers to Experiment with Experiential. In this section, he highlighted our good friends at Vans and how the brand benefited from opening a House of Vans just a few miles from their Chicago store.

House of Vans: A Success in Experiential Retail

Custom bench, fixtures, and shelving by Morgan Li at House of Vans

Vans has always been on the forefront of experiences. They know their market and they know how to deliver for them. From pop-up skate parks at malls to the annual Vans Warped Tour, the company has always been more than their products.

But one of their greatest successes has been their House of Vans retail experience. Opened in February 2017, House of Vans supplements the company’s conventional store footprint. In this store, located a few miles from their main Chicago location, Vans offers a retail space—as well as a skatepark, music venue and event space.

It might not bring as many people as their main store—7.9 visitors per square foot vs 18.5—but those who show up embrace the experience. Analyzing data from January to June 2022, Chernofsky noted that House of Vans saw customers nearly twice as likely to return. Pair this with an extra 12 minutes in dwell time, and Vans is taking creative steps to connect with its customer base.

Chernofsky adds,

“Thanks to its skatepark and curated events, House of Vans likely attracts young skaters and other similar demographics that reflect the Vans ethos and aesthetic. By giving these visitors the opportunity to form unique memories, House of Vans can count on these individuals to act as brand ambassadors and build the Vans name among their friends and family — all thanks to the experiences provided in this one unique location.”

We’re proud to continually supply both House of Vans, their store at 1051 N. Rush Street, and many of their authorized resellers with graphics and more needed to deliver unforgettable retail experiences.

Social Engagement: Online & Offline, In-Group and Out-Group

Perhaps the biggest benefit of experiential retail is that it’s inherently social. As highlighted above, a concert at House of Vans is going to have customers checking in, taking photos, and sharing them. It’s going to have skaters interact with other skaters. So not only are visitors sharing their positive experience with potential visitors, they’re connecting with members of their group. And in turn, they’re feeling increasingly connected with your brand.

You Create Experiences. We Create Spaces.

Experiences will continue to shape the way retailers interact with customers, and experiential retail will provide organic and authentic ways to establish who your brand is. We… aren’t an experience company. But we do make spaces. Spaces built to create an unforgettable experience.

We’re Morgan Li and we’ve spent nearly eight decades transforming spaces with custom fixtures, furniture, and graphics. From established players to digital natives, we’re ready to apply more than half a million square feet of domestic production space to build what you need when you need it.

Whether you’re looking to open new stores or renovate existing ones, consider dedicating part of your space to delivering experiences. And leave the rest to us. Check out some of our recent projects and get in contact with us to learn more.

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Cash wrap and perimeter displays at Brooklinen flagship in New York City. Custom retail fixtures by Morgan Li