What on earth is experiential shopping and should we care?
Traditional retailers are turning to ‘experiential shopping’ to compete
“If you are just a retailer now you are going to have to be a tech company tomorrow.” Photograph: iStock
Retailers will gather in at a conference Dublin later this week to find out how they can make shopping more “experiential”. What on earth is experiential shopping and should we care?
Whether we do actually care or not, we are likely to be confronted by experiential shopping experiences more and more in the run-up to Christmas and beyond as shop owners here look to replicate retailers overseas as they all try and work out ways they can take on all the online retail giants that have become so adept at hoovering up our disposable cash.
Essentially, experiential retail simply means making the physical act of spending money about more than simply handing over the cash in exchange for goods and services. It has been happening in all sorts of ways in this country for longer than you probably think.
The most obvious example of a shift to the experiential is the humble petrol station. There was a time – not that long ago – when petrol stations sold petrol, diesel, cigarettes and sweets, maybe the odd briquette and, if you were lucky, a grotty toilet out the back that smelled like a herd of wildebeest had died in it.
It is a different world now. Petrol forecourts have becomes palaces of commerce where freshly ground coffee and pastries can be found alongside children’s toys and “romantic” gifts for your loved ones. Hot food is served at all hours of the day and night and pine-fresh porcelain palaces gleam behind it all. Some such forecourts have even been named after American presidents.
But it is not just in forecourts where the experiential is happening. Department stores and shopping malls now offer manicures, massages and all sorts of other services they hope will allow them to engage with us on an emotional level that the online retailers cannot yet compete with.
The third space
Volumes of international research shows how millennials more than most appreciate this kind of engagement (which they can then post on Instagram and Snapchat to cement the notion among their followers that their lives are terribly exciting) . These digital natives do much of their research online and know how much things cost, so if they are going to be convinced to shop in actual rather than virtual shops, they demand extra special attention.
Last year Staples, an office supplies retailer in the US, set aside space in its shops for wifi-enabled workspaces for the shopping public and supplied them with coffee – effectively trying to turn a place of paperclips and paper into that magical third space where the kids could go and hang out. Then there is the PGA Tour Superstore in Houston, which offers golf lessons from pros and has a large putting green and a section for practising swings.
Retail Ireland – the umbrella group that represents much of the retail sector in the State – wants in on the experiential action, which will be the focus of Thursday’s Retail Summit in the Guinness Storehouse. It has the title Exploring Experiential Retail and it will focus on how to deliver “unforgettable experiences to customers to drive brand loyalty and deliver greater consumer spend”.
Ahead of the event, Thomas Burke, the head of Retail Ireland, told Pricewatch that in order to take on the challenges posed by the online retailing revolution, bricks-and-mortar shops should be more about “making the experience of shopping as theatrical as possible, making it as social as possible and that can be done using technology and people and displays. The reality is we have to give consumers a reason to come out from behind their computers, and they will do that if they feel a sense of belonging, so what we want retailers to do is to build a sense of community.”
He says retailers cannot continue to do what they’ve done for the last “10 or 15 years for the next 10 or 15 years and expect to be in business. Everyone is going to have to change.”
But how far can retailers take it? Do we really want to be confronted with all manner of bells and whistles when we’re buying socks? “Obviously when it comes to creating an experience, there is a balance, says Burke. “You don’t want to be jumping out at every shopper but you do want to acknowledge each of them and you do need to work out how to build an emotional connection with each of your shoppers.”
One of the retailers who will be sharing their experience of the experiential is Avoca, a shop that manages to be both very traditional and on the bleeding edge of the next big thing. “I have heard a lot of talk about experiential shopping in the last year,” says managing director Simon Pratt. “But I think it has been at the heart of our company for a very long time. We have always worked to create a little bit of theatre in our shops.
“When people are in the retail environment it should be a cheerful and uplifting experience. It is a leisure activity, after all, and it should be fun and that has always been part of how we have seen it.”
He says the company’s secret is not hard to work out with fresh food and good coffee central to making a trip to Avoca about more than the acquisition of stuff. “I remember during the worst of the recession other retailers were telling me about the real struggle they were having just to get people to come through their doors,” says Pratt. “They had cut their prices by 30 per cent or more but customers were still saying, ‘If I go shopping, I will end up putting more on my credit card’.”
But what Avoca has long done has been to make shopping just one part of the experience. “We put ourselves in a position where our shoppers could do some retail without making a conscious decision to go shopping,” he says.
Of course Avoca is different to many retailers because of what it is. It doesn’t sell anonymous clothes or can-be-found-everywhere technology, and by any measure its range is eclectic. Even aimlessly wandering around the shops, marvelling at what is for sale – and, let’s face it, at the prices sometimes – is a pleasant enough experience.
“I think that because of what we sell, the online challenge is maybe not so severe and we don’t sell that much stuff that is easy to replicate online, so you might find a slightly quirky leather bag or you might just happen upon something that you didn’t know you were looking for. That is an advantage, for sure.”
The march of metadata
Alan Henderson is the “chief customer strategist” of Pygmalios Analytics, a company that helps retailers measure “every aspect of customer journey and quantify the most valuable areas of customer experience”.
His presentation this week is likely to scare the audience. “We want to help retailers understand what is happening with their customers,” he says. “We do this by tracking movements outside the store to see how many people walk past and what percentage come in and what they do next. We track movements and use cameras to determine people’s age, race, gender and their emotions and how long they spend doing certain things.”
Sounds terrifying, right? “When I explain it, it does sound kind of terrifying,” he admits. “It sounds very Big Brother. But the important thing is we don’t know who you are and we don’t want to know who you are; we are working with the metadata.”
He also makes the valid point that the only tool traditional retailers have to measure consumer behaviour is sales data. Ecommerce retailers track everything a shopper does – what they look at and for how long, what they buy, what they don’t buy. Where they have been. Where they are going next.
“Traditional retailers can’t do that and that’s what we want to change, we want to be able to quantify what the user experiences.”
User? Are they not customers? Isn’t ‘user’ a very tech term? “It is but if you are just a retailer now you are going to have to be a tech company tomorrow,” he says. “At least if you want to survive.”