Brick and mortar retail sales figures are dropping every year regardless of whether consumerism keeps going up, the main reason behind this is the fact e-commerce keeps growing every year and although e-commerce represents, at the moment, 10% of all retail spending.
Some believe physical shops are doomed, but it is actually true is that shopping styles are changing. And the centre of this trend lays retailers.
Although the retail industry is one of the biggest industries in the UK, retailers will need to up their game if they want to stay relevant to Millennial customers.
New generations are not driven to store by the necessity to purchase or its convenience only, customers today are looking for experiences and a sense that they are buying something unique.
Most purchases are made by how buyers feel about it rather than how convenient is to actually purchase the item.
- According to PSFK’s “Future of Retail 2018” report, 55% of retail executives will spend part of their marketing budgets on in-store experiences by 2020.
- 73% of customers will spend more money and time in-store offering experiences.
- Experiential luxury retailers such as Harrods and Selfridges see in an increase in sales while their competitors like Debenhams and House of Fraser are struggling.
- 70% of customers say they would shop elsewhere if a store didn’t have an exciting or engaging experience.
- 85% of customers are more likely to spend in stores after taking part in an event.
- 90% of clients have a positive feeling about a brand after attending events.
- 9 in 10 marketers agree that in-store experiences build more customer engagement (Foodnewsfeed)
- GooglePopUp generated 28.2 million impressions, 95.2% of positive mentions.
- 80% of marketers believe that in-store experiences will drive more sales and customers and is critical to their company’s success.
- 77% of them will integrate experiential marketing as part of a brand’s advertising strategy.
1. Retailers will need to up their game if they want to succeed
# According to PSFK’s “Future of Retail 2018” report, 55% of retail executives will spend part of their marketing budgets on in-store experiences by 2020
Statistic – Fact
But what are retailer doing to prevent traditional retail to fall? Physical retail is not ended any time soon if at all.
Contrary to this fatal retail prediction, there is a successful case such as Selfridges and Harrods which managed to increase their retail sales while most of the other fashion retailers are struggling.
Experiential marketing strategy has proved to be successful in the Some number backed this up. For example, PSFK surveyed 400 retail executives to understand what their budget will go in the future and more than half of them consider in-store experiences a top priority, so as this is the second.
The biggest marketing investment would go to capturing and understanding data.
# Experiential luxury retailers such as Harrods and Selfridges see in an increase in sales while their competitors like Debenhams and House of Fraser are struggling
Statistic – Fact
2. Executives are planning to increase their budget for experiential retail
The fact that experiential marketing is more than just a trend and would actually lead the future of retail, is Selfridges success.
Selfridges is probably one of the leading companies in experiential marketing at the moment and has been investing heavily on increasing customer experience in-store and delivering a unique shopping experience.
Selfridges have reached a 12fth-consecutive-year record sales record. Debenhams and House of Fraser have, on the other hand, suffered to adapt to the modern shopper expectations and their sales have dropped notably.
# 70% of customers say they would shop elsewhere if a store didn’t have an exciting or engaging experience
Statistic – Fact
According to RetailExpo, consumers will spend more time and money on the shop if theses offer experiences as well: “63% of shoppers agree they want the places they shop to be inspiring”.
Nowadays companies, especially retailers, are investing more and more in experiential marketing and instores experiences, mainly because it gives them an edge over their competitors, experiences are more memorable and make a longer impact on consumers ́ minds.
Many predict that experiential marketing would consume much of the marketing budget for companies in the future as e-commerce and practical shopping continues to grow.
Matt Bradley, Event Director for RetailEXPO, explained: “ Shopping is a leisure activity, an immersive, social experience that creates an emotional response.
The ubiquity of e-commerce has changed the motivation for consumers to visit in-store meaning retails must create compelling reasons to visit. ”
As we can see on the image above, participating in experience increases engagement and builds brand recognition by creating attractive and inspiring experiences, retailers manage to create a lasting and positive impact on consumers ́mind rather than more conventional marketing strategies.
3. New consumer mindset at 2019
Nowadays customers have more choices than ever before, thanks to the internet and modern shipping techniques, anyone can buy almost anything from anywhere in the world at a click.
E-commerce, the rise of Amazon and eBay as well as the Globalization process have opened endless possibilities. These factors have shaped a new type of customer mindset: savvy, nonconformist and with high expectations.
# 9 in 10 marketers agree that in-store experiences build more customer engagement (foodnewsfeed)
Statistic – Fact
If e-commerce is slowly taking over retail, data shows that in-store experiences drive customers to brick and mortar shops.
Millennials generation is driven by experiences over materialistic possessions. And experiential retail can become a powerful strategy to channel more consumers into stores.
According to the National Retail Federation also confirmed by a top data analytics company, experiential retail marketing is driving customers to stores, with 49 % of those surveyed visiting stores more often than they used to because of new entertainment or restaurants.
4. Experiential retail 2019
What is the state of experiential retail in 2019? Many retailers, especially in the luxury sectors, are investing large sums of money into experience and participation marketing in an attempt to reach to consumers and stand out from the overcrowded retail market.
For example, Louis Vuitton keeps inspiring us with its overloaded and fancy installation which look more like a piece of contemporary art.
According to the Freeman Global Brand Experience study, over one third of marketing managers are planning to spend 21% to 50% of their budgets on brand experiences over the next several years.
And 80% of marketers believe that in store experiences will drive more sales and customers and is critical to their company’s success and 77% will integrate experiential marketing as part of a brand’s advertising strategy.
5. Top luxury experiential marketing examples to inspire you
5.1. TIFFANY & CO VENDING MACHINE
Tiffany & Co launched one of the most decadent vending machines in the world to promote the opening of their new store at Covent Garden in London. The world-renowned Jewellers have built a space which is meant to stimulate among visitors creativity and playfulness.
In an attempt to attract attention and increase customers engagement, Tiffany has installed a vending machine that expands the brand’s first fragrance.
By creating this concept, it attempts to deliver to clients an original and appealing proposition different from any other jewellery brands.
5.2. CHARLOTTE TILBURY’S MAGIC MIRRORS
Another beauty brand making the most of technology to change customer experience is Charlotte Tilbury.
The British makeup label has implemented an augmented reality technology trying to ‘educate women on the power of makeup’, this innovative tool can do facial tracking, bespoke skin analysis and real-time augmented reality.
Augmented Reality screens were installed in the store, allowed users to have their faces scanned and therefore to try on virtually brand’s looks.
Among others, it allows women to see without trying on what lipstick colour would suit them better.
According to themselves, they found a high correlation between customers who used the mirror and purchased something on the same day.
5.3. AUDI VR EXPERIENCE
Audi executive is aware of the importance of the showroom experience. In an attempt to generate attention and increase their in-house customer experience, they launched a VR Audi experience which essentially offers to customers an ultra-high fidelity experience of both the interior and exterior of the car.
Using virtual reality, visitors could take a look at the full range of cars’ customisable options before buying or ordering.
Users are able to inspect and digitally experienced their customised version of their vehicles. The VR tool is so powerful and to leave more than one person speechless.
Audi went above and beyond to create a powerful impact on costumer by taking this experiential digital application to its limits.
The German marketing team took care of every single detail, and users were able to even examine the seat stitches before purchasing their customized vehicle.
6. THE POP-UP STORE PHENOMENON
Brands are investing in experiential retail to drive customers into their brick-and-mortars by opening their own pop-up in-stores experiences. Alibaba’ Singles Day marketing campaign represents a perfect example of a successful experiential pop-up.
The Chinese corporation opened 60 pop-up stores in Chines where clients could virtually try things on using digital screens and augmented reality. Thanks to the campaign Alibaba received 812 million orders.
# GooglePopUp generated 28.2 million impressions, 95.2% of positive mentions.
Statistic – Fact
Campaigns like GooglePopUp and Calvin Klein x Amazon pop-up store generated great results in social media sentiment which has encouraged brands like Old Navy, Home Depot and Nordstrom are planning to launch their own interactive pop-up destinations with multiple events such as beauty classes and home workshops.
If you are thinking about how experiential marketing can benefit your business, please feel free to get in touch for quick over-the-phone consultation.