LOS ANGELES, United States — Think back to the first time you ever went to Disneyland. When you enter, all five of your senses are instantly being catered to. The castles you’ve seen in the movies are right there in front of you, the smell of delicious food is in the air and whimsical music soundtracks your day. Those are just a few of the reasons that keep people of all ages coming back again and again. But what is Disneyland? Chances are the vast majority of people would categorise it as a theme park, which it most definitely is. However, when you boil it down, Disneyland is a brand experience space, a physical manifestation of all things Disney and a chance to experience it in person and fall more in love with the brand.
Now think back to the last time you walked into a retail location of your favourite brand. What did you feel? Did you have a memorable experience? Chances are you didn’t, and that’s a problem. According to GlobalData Retail, 70.7 percent of consumers say that the stores they visit are uninspiring, while 72.7 percent say that stores are a dull experience. The combination of stagnant uninspiring stores and e-commerce has seen the number of visitors to physical retail locations plummet. In shopping malls, for instance, mall traffic has declined by an average of 5.3 percent year-on-year since 2014, according to a Cowen report.
Retail spaces, malls and department stores have been closing at alarming rates and are projected to continue doing so. According to a Credit Suisse report, 8,600 retail locations are projected to close in the US in 2017. If true, 2017 would eclipse 2008, in which 6,163 stores closed, as the worst year for store closings. At a time when retail is facing its most challenging time yet, the need to adapt is becoming even greater for companies wishing to remain in the race. Brands must create environments in which customers who come into their stores leave feeling a greater connection to the brand, and these connections are now built through the creation of experience.
“Goods and services everywhere are becoming commoditised. You can buy whatever you want at the cheapest possible price, you can get it all over the internet or in warehouse-type places,” says Joseph Pine II, co-author of “The Experience Economy”. “We’re at the level of peak stuff, we don’t need more things. We need what we value, which are experiences.”
For years, brick-and-mortar retailers have engaged their customers through merchandising and store layouts. Now, however, they must focus on creating an experience for the customer. Several fashion brands have successfully done so with the help of technology, education, and entertainment. These tools should serve as a foundation for all brands wanting to connect with their customers and create a lasting impression that will keep them coming back.
When it comes to the integration of technology in retail, many have tried but only few have succeeded. The role of technology should go beyond improving the consumer experience; it should give retailers the ability to get to know their customers like never before.
Ray Hartjen of RetailNext, a leading provider of retail analytics, believes technology eliminates “friction” in the shopping experience. “The difference makers in retail are asking ‘What do we know about friction points?’ ‘Where do we lose customers?’ ‘Or maybe we keep the customer?’ But they’re begging for something different that we can use to create a competitive advantage,” says Hartjen. For those who eliminate friction points, there is great opportunity, such as increased foot traffic and a customer’s willingness to pay full price. After all, convenience is the reason many consumers prefer online shopping, according to PwC’s 2015 Total Retail Survey.
A well-thought-out and frictionless brand experience can be an extremely powerful pairing for retailers. One of the best examples of this being executed properly is from LA fashion brand Reformation.
Earlier this year, the company opened its first tech-enabled store in San Francisco. “The retail shopping experience is outdated [and] accessing information while in a store is very challenging,” founder and chief executive officer Yael Aflalo tells BoF. “I think that we’re so used to having every piece of information at our fingertips: searching for products, finding out if product is in stock, sorting for what you want. All those things are very manual.”
Eliminating those friction points was the goal for Aflalo. Now, the majority of Reformation’s stores are equipped with digital touch screens and fitting rooms with adjustable lighting. The touch screens allow shoppers to see all available styles and sizes in-store in real-time and select what they want to try. An associate will receive a notification and prepare the shopper’s fitting room. Once inside, there’s no need to leave thanks to the “magic wardrobe”, another screen that allows shoppers to select a different size or style and have it delivered to the fitting room.
Tech-integrated experience at Reformation is functional, because It allows the company to collect consumer data. One of the first things a customer will notice when they use one of the in-store screens is that it bears a striking resemblance to Reformation’s e-commerce site. For Aflalo, the integration of brick-and-mortar with e-commerce was crucial when designing the concept. “Because everything in our store is orchestrated through technology, every single interaction in the store is tracked. We know how many people walked in, how many people created a dressing room, how many people showed up to a dressing room, how long they spent in the dressing room, what they purchased, what they didn’t purchase, how long they were browsing for,” she says. “Because we email everyone their receipt, we now have all of that in-store information connected to our e-commerce information. Because of that, we can be better at knowing what our customers liked and didn’t like and then give them better product suggestions.”
Technology will need to become an integral part of an experience-based store.
It seems Reformation is ahead of the competition in terms of in-store technology. “Today stores are still struggling to align inventory systems and align pricing because they treat [e-commerce and brick-and-mortar] shopping as separate channels,” says Hartjen. Indeed, brands must understand that the line between e-commerce and in-store shopping is absent from the consumer’s mind. Thus, merging the e-commerce experience and analytics with in-store shopping and vice versa allows brands to know their consumers’ behaviour better, while also delivering an elevated experience that is not currently offered by the competition.
The Education Experience
By providing educational experiences, not only is a brand creating value for consumers, but they are also learning new ways in which they can use the product.
Take Burberry’s Maker’s House. After the brand’s September 2016 and February 2017 shows, the venue was transformed into a space where visitors could learn about the inspiration for the “see now, buy now” collection, participate in free events connected to the collection, as well as view art on display.
For the September 2016 collection, Burberry partnered with The New Craftsmen, a furniture and homeware company rooted in high-end British craftsmanship, with the goal of bringing the collection’s inspiration to life. The week-long event offered an extravagant list of free activities including sculpting, sand-casting, traditional lacquer, stitching and embroidery, as well as lectures on fashion history taught by the Burberry archivists. Within a week, over 20,000 people had visited Maker’s House. The second edition, in February of this year, was even more successful. An exhibit of works by sculptor Henry Moore (the inspiration for that season’s collection), as well as classes including print-making and life-drawing, resulted in over 30,000 visitors and 3.8 million social media impressions.
While Maker’s House has been a marketing success for Burberry, it is important that brands integrate a similar mix of learning opportunities permanently into their retail strategy. Sephora is a leader when it comes to this. The brand’s Beauty TIP (Teach, Inspire, Play) stores are a testament to its commitment to innovation and customer experience. Sephora experts teach group beauty classes, while an augmented reality tool, “The Virtual Artist”, allows customers to see how several hundred combinations of looks would appear on them, as well as learn new techniques through video tutorials. By pairing technology with opportunities to learn, Sephora has created a thriving retail network that is not only driving sales, but creating lasting impressions on customers that keeps them coming back. Revenue for LVMH’s selective retailing group increased by 12% in the first half of 2017, and was attributed to Sephora’s growth.
The Entertainment Factor
With many consumers, especially millennials and members of Gen-Z, shifting their spending away from tangible goods to entertaining experiences, brands must capitalise by integrating those experiences into their retail strategy. A study by Seattle-based consulting firm Harris Group found that 78 percent of millennials prefer to spend their money on experiences rather than tangible products. Millennials are driving the experience economy and their spending power is only set to increase: in the US, the demographic has already surpassed Gen-X as the largest share of the workforce. Brands that are successful in marrying entertainment with retail are more likely to engage millennials, drive traffic to stores and connect with their customers in a deeper way.
Millennial expectations are shared by older generations too. The Harris Group study found that since 1987, consumer spending on live experiences and events relative to total US spending has increased by 70 percent.
By creating entertaining experiences for customers, retailers not only drive store traffic and increase brand loyalty, but also create a marketing opportunity. Consumers who attend these experiences are often documenting them on social media. This authentic and organic engagement allows brands to access customer’s social networks and reach a larger audience.
One of the first fashion brands to enter the experience economy was Vans. The business has been providing memorable experiences through events such as The Warped Tour, America’s longest running and largest travelling music festival which launched in 1995. Vans hit a home run in 2010, however, with the first “House of Vans” in Brooklyn, New York: a space for free concerts, art exhibitions, workshops and a skate park, but not retail.
“The House of Vans is the physical manifestation of what the Vans brand stands for. It’s a home for all of our brand pillars: action sports, music, art and street culture,” says Nick Street, vice president of global integrated marketing at Vans. “We’ve always supported subcultures and the communities that are close to us, so for us it’s a pretty natural thing. If you’re a skate brand you’re going to create a skate park for skaters to skate in. If you’re encouraging self-expression and supporting artists, you create a space where they can show their artwork or where they can play on a stage.”
The concept was so successful in terms of driving brand loyalty and engagement, there are now three permanent House of Vans locations and six pop-up locations in eight countries, none of which sell any products.
It is evident that the time for apparel brands to enter the experience economy has come. As an increasing number of retailers close their doors, it is important for the brands wanting to survive to understand the benefits of experience-based retail. Ideally, an experience space will contain elements of all three categories: technology, education and entertainment. A frictionless experience is achieved through technology; education adds value for the consumer; while memorable entertainment increases traffic, brand loyalty and social media impressions.
Regardless of how a brand chooses to shape its experience, it is important to remember the goal, which is to inspire the customer, and provide them not only a reason to come into a store, but for them to want to come in and need to return.
Pine agrees: “When they walk out, the last thing that happens is something that creates a memory, giving them the feeling that they want to do it again or to share it with somebody and feel like, ‘Wow that was time well spent’.”
"Given that the fashion industry is changing so quickly it is important that the fresh ideas and unique perspectives from the next generation of leaders are heard. That is exactly what has been accomplished with the Future Voices program. Thank you to The Business of Fashion for providing me with the platform and opportunity to share my thoughts and opinions about the need for experience based retail. As a college senior that is truly an incredible opportunity.
A special thanks to my editorial mentors Limei Hoang, Christopher Morency and Tamara Abraham, who provided me with guidance and an invaluable learning opportunity throughout the writing process.
The Business of Fashion has always been a place in which all aspects of the fashion industry intersect and to contribute to that has been an incredible honour."
The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.