Concept is King: Examining Experiential Retail
Concept is King: Examining Experiential Retail
- Words Leslie Zhang
- Date September 22, 2017
With every action tracked and every decision guided by smart phones, computers and wearable technology, it is of little surprise that an increasing number of consumers turn to the convenience of e-commerce to satisfy their shopping needs. With sites like Grailed and other alternative online marketplaces, the internet makes it easy for shoppers to find what they want at prices below even the deepest store markdowns. An August 2017 release from the U.S. Department of Commerce estimated the value of second-quarter domestic e-commerce sales at $111.5 billion, an increase of 16.2 percent from the previous year that positions e-commerce as the channel behind nearly 1 in every 10 sales in the United States.
On the flip side, the past few years have been depressing, if not devastating, for brick-and-mortar retail. In April, The Atlantic reported corporate behemoths shuttering hundreds of flagships, bankruptcy indiscriminately striking businesses of all scales and apparel companies’ stocks dipping to new lows. The media dubbed it Retail Apocalypse, a dramatic yet unfortunately apt name. In his “Retail Prophet” column for Business of Fashion, industry futurist Doug Stephens repeatedly warns of the imminent demise of the physical store as we know it, and heralds the popularization of stores fueled by technology and keen to provide visitors unique, sensory experiences.
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“Skids of products and rows of shelving will give way to more gallery-esque store designs and artful merchandising, allowing space for in-store media and interactivity with product,” Stephens declared in early 2015. “Social media will be infused into the experience offering at-the-shelf reviews, ratings and comparisons of products. The store in essence will become an immersive and experiential advertisement for the products it represents and a direct portal to the entire universe of distribution channels available.”
Faced with the growing, inescapable dominance of e-commerce in today’s retail landscape, designers and retailers must transform traditional boutique spaces into experimental, experience-driven landscapes primed more for promoting a brand image than for converting sales.
Modernizing Store Design for Millennials
The conceptual store that Stephens predicted is one rooted in total consumer immersion, thus heightening the need for retailers to understand and control the influence the store’s environment has on shoppers. A store’s environment is not only made up of its interior and exterior design, but also its physical surroundings and ambient variables such as music choice, lighting, layout and wayfinding, color palette, scent and temperature.
A 1982 study found that, for task-oriented shoppers, environment has little impact on initial store selection and planned purchases. Today’s shifting retail landscape further complicates the issue, as task-oriented shoppers can now utilize the internet to quickly locate products for the lowest available price and have it delivered without making physical trips. As such, it may seem initially futile—even wasteful—to devote resources toward building out store interiors to match what 35-year-old research studies deem to fit consumers’ subconscious desires for an ideal shopping environment. However, research on millennial shopping habits report a widespread acknowledgement of shopping as a form of entertainment and a legitimate group activity. To lure shoppers out, stores need to heighten “hedonic values” such as fun and novelty.
In the past, this could be as simple as repainting the walls a warm shade and playing more upbeat music. Today, creating a real-life experience more fun and novel than the meme-filled abyss of the web often ironically means blurring the divide between the two. Buzz-worthy boutiques and pop-up shops increasingly incorporate heavy-duty technological installations, or act as portals into otherworldly settings ready to be captured through cellphone cameras. A traditional boutique space, however hip or elegant, no longer seems enough to carry a business. Instead, physical stores are increasingly being converted into multi-use creative spaces that not only encourage online sales and native social media advertising, but establish and advance a specific brand or company image.
[Off-White’s Hong Kong space](http://familynewyork.com/work/031owhk exemplifies the pivot away from utilitarian interior design. For the interior design, Virgil Abloh tapped Family New York, an architecture firm that has created stage sets for Kanye West and collaborated with Nike and NeedSupply. The result is a narrow, sparsely-stocked space where lush tropical foliage and geometric white wall shelving is dotted with the occasional Abloh creation. The shop is about four times as long as it is wide, and would never truly be able to functionally accommodate the horde of shoppers Off-White’s popularity is capable of generating. That, however, was never Abloh nor the firm’s intention; instead, the location was “designed to materialize the versatility of Virgil Abloh, the creative mastermind behind Off-White…The Quarry-like interior functions as a gallery, retail or performance space, pending on the nature of Mr. Abloh's collection and performances.”
Digital as More Than Just Data
The internet’s abundance of information has led to willing privacy tradeoffs in favor of speed and convenience. Businesses eagerly tap into the online culture of oversharing, utilizing personal information and browser history to push targeted product advertisements onto users. “Digital tools just make it easier to collect, merge, and sell databases,” wrote media scholar Siva Vaidhyanathan in his book The Googlization of Everything. “Every incentive in a market economy pushes firms to collect more and better data on us.”
Retail executives and industry consultants are thus eager to mash together society’s collective unquestioning love for technology and data collection tools under the guise of personalizing offline shopping. Farfetch, one of the industry’s most prominent online destinations for luxury fashion, tried it out with their “Store of the Future.” The pop-up shop employs virtual reality, touch-activated mirrors, emotion-scanning software and new payment options that plans to be “the offline cookie that closes the loop,” according to founder José Neves.
Placing the emphasis on gathering offline customer data is misguided, however, as their information will provide limited insight on how to save retail if it does not address root causes behind why fewer and fewer shoppers even bother to venture out the door. Creating truly tasteful, appealing shops that coax the digital generation out of hiding requires a more sophisticated embrace of technology beyond equipping every staff member and fitting room with tablets.
Nike’s recently-launched Makers’ Experience in their By You Studio represents a more cohesive integration of personalization technology. The currently invitation-only studio is an acceleration of their online customization service NIKEiD, allowing selected visitors to customize a pair of blank sneakers to their liking and ‘try’ them on through augmented reality and digital projections. The confirmed design is then produced within 90 minutes. With focus shifted to creating both a unique experience and a unique product as opposed to harvesting information, Nike successfully establishes and differentiates an innovative physical space and furthers its reputation as a company that “has worked directly with athletes to create cutting-edge and highly personalized products.”
Soul in the Age of Social Media Playgrounds
Nike’s Makers’ Experience not only harnesses technology to create immersive, personalized experiences, but it also taps into another important factor of the equation: exclusivity. For the social media generation, exclusive experiences are often what gets pushed to the front of the highlight reel and, consequently, to the top of the list of things worth spending money on. Eventbrite reported that 78 percent of millennials in the study would rather spend money on experiences and events over items.
Social media rests on upward association and personal brand building, which in turn generates a proliferation of Snapchat stories and Instagram photos taken at private, influencer-filled events and VIP or invitation-only spots. While this trend can often be FOMO-inducing or seen as nauseatingly self-indulgent, RSVP-required, after-hour events and private concerts are a straightforward model for labels and retailers to replicate. Oftentimes, such events produce native advertising through word-of-mouth on social media that is much more effective than a traditional marketing campaign, and promote the store as something worthy of association or aspiration.
Besides producing the need to flaunt exclusivity, the storm of social media has unleashed a general frenzied pursuit of anything “aesthetic.” People deliberately venture out in search of photo opportunities, queueing up for the latest over-the-top, photogenic dessert and heading to the latest trendy restaurant, gallery space or boutique to capture bleach-white walls and palm leaves pulled from the latest Pinterest page refresh.
“In response to the ever frantic demand for trendy environments, digital strategists and brands have joined forces to sidestep museums, restaurants, or businesses that double as nice backdrops—and skip straight to the backdrop itself,” Alyssa Bereznak wrote for The Ringer. “They are frequently designed to accommodate and complement the smartphone-wielding masses who don’t just want to photograph art or fashion—they want to prove they were part of it themselves.”
While curating social media-ready spaces appears to be easy bait to attract new demographics, there lurks the risk of stores becoming nothing more than a prop or a backdrop, as has happened to countless art exhibits and installations. The infamous pink exterior walls of the Paul Smith flagship on Melrose Avenue in Los Angeles demonstrate the profitability perils involved. The Paul Smith store has become one of the most recognizable photo spots. Yet, "the Instabait does not contribute to foot traffic, and that if anything, it deters real Paul Smith customers from shopping," wrote Dhani Mau for Fashionista. "Indeed, those who prefer an intimate, exclusive setting when dropping thousands of dollars on work clothes might, understandably, try to avoid such an environment."
Even if actual products inside really have been eclipsed by the store's design, the Paul Smith brand has perhaps been complacent in its own diminishment. The company has not acted much on the phenomenon, besides most noticeably placing security guards by the wall to control daily tourist traffic and prevent damage. The store was painted for its opening in 2005, several years before social networking truly took off, and perhaps the Los Angeles store was never calibrated to properly welcome and leverage the potential of a social media-driven crowd of consumers.
There is no panacea to the current woes of the retail industry. Brick-and-mortar stalwarts should not view e-commerce, technology and social media as a plague causing a slow, miserable death. Instead, the retail landscape should be viewed as an industry as fluid and ever-changing as the next, facing unique challenges with the rise of the Internet Age and armed with a number of adaptations in response.