“Experience” is the hottest word in retail these days. In “The Rise of Experiential Retail,” the cover story of the summer 2016 issue of Development magazine, author Maria Sicola describes how brick-and-mortar stores, malls and shopping districts are using authentic, hands-on experiences to differentiate themselves from online shopping platforms.
Since the article appeared, even more retailers have been jumping on the “experience” bandwagon. Mega-department store Macy’s, for example, revealed its prototype “store of the future” in a Columbus, Ohio, mall last month. The renovated store includes spaces where Macy’s can host classes to demonstrate beauty products and other events; an interactive “touch, try, feel” cosmetics department where customer and salesperson can sit together without being separated by a physical barrier; and expanded wedding and personal shopper services. “Services have become just as important as the product,” Andrea Schwartz, Macy’s vice president of media relations and cause marketing, told Columbus Business First.
Elsewhere in Ohio, the KitchenAid Experience Retail Center in the small town of Greenville offers cooking classes and demonstrations as well as factory tours, an outlet store, repair services and even a museum featuring the company’s early products and advertisements. Sub-Zero and Wolf Showrooms throughout North America are another example of experience retail venues where customers can attend cooking classes and demonstrations, compare products in a hands-on setting and work with designers.
Other retailers are betting that new types of experiences will attract shoppers A Forbes article, “Virtual Reality Will Save Retail,” notes that Samsung 837, the company’s New York flagship store, “carries no products, but pushes experience.” It hosts workshops and other events – including weekly runs and yoga classes – and features “giant interactive screens, a kitchen, theater and a multimedia studio. It’s a facility set up to celebrate experiences, specifically the experiences created and viewed on Samsung products.” While Samsung will use the store to sell its immersive virtual reality (VR) headsets, other retailers are expected to begin using VR to promote different types of products. Home improvement stores, for example, will use it to enable shoppers to visualize home remodeling projects, while sporting gear stores will allow customers to test athletic gear virtually and clothing stores will enable shoppers to “try on” clothing virtually.
As U.S. shopping malls update their events programs and leasing efforts, many are focusing on creating new types of experiences for growing ethnic groups. According to a Denver Post article and other reports, a number of developers have built or redeveloped Hispanic-focused malls and shopping centers, appealing to this demographic with larger common areas and family-oriented programming. Other malls have targeted Asian-American customers. And even traditional malls are expanding their programming and retail offerings, hosting more community events and adding more restaurants, movie theaters, salons and fitness facilities (think Zengo Cycle and Pure Barre rather than Gold’s Gym) in an effort to provide experiences that shoppers can’t get online.
In at least one case, however, a major retailer has decided to go against the grain. According to a Connect Commercial Real Estate article, discount department store Kohl’s tried to attract and retain shoppers with “Kohl’s Cafés” in its home state of Wisconsin, but decided after a two-store test run to kill the concept rather than expand it to additional stores. “The idea of a café in a department store is good, but is certain to be a lot of maintenance without good profit margins, unless you know what you’re doing. Unfortunately, Kohl’s wasn’t able to give it more time,” the article reports.
What types of experiential retail outlets are you seeing in your projects and your community? Do you think this is a fundamental change in the world of retail, or just a momentary flash in the pan? Let us know by posting a message in the comment box below.
Julie D. Stern is Managing Editor, Publications, at NAIOP.