Kristina: Over the past 18 months, “experience” has become a buzzword in e-commerce circles – what is “experiential retail?
Jonathan Yaffe, Co-Founder and CEO, AnyRoad: As unmarked retail chains die off every week, the world’s best category-defining retailers are all becoming experiential brands. That’s why Calvin McDonald, CEO of Lululemon, called Lululemon an experience business rather than a clothing business. This is why Jean-André Rougeot, CEO of Sephora, alluded to the future of Sephora depending on services and appointments.
The concept of experiential retailing was already taking off before 2020, but the pandemic has accelerated as the last year and a half of lockdown has surfaced what really matters: People crave human connection and experiences that stimulate the world. ’emotion.
Kristina: How important is this marketing aspect to merchants now?
Jonathan: Very important. In fact, their future depends on it. The world is moving from an economy of “things” to an “economy of experience,” and only retail brands that embrace this idea will survive. We live in a time when 72% of Millennials prefer to spend their money on experiences rather than things, after all.
More and more retailers are realizing that the combination of physical location and consumer experience is what ultimately establishes brand loyalty. Brands like Bloomingdale’s, DICK’S Sporting Goods, Lululemon and Sephora have all made major strides in experiential retailing this year and many more will follow suit if they want to stay competitive.
The pandemic has also challenged any retailer that has expanded its physical footprint too much in previous years to turn the boat around and ensure that the remaining stores are properly tailored to target markets. Many retailers are reducing their footprint and re-evaluating their product line and customer experience strategies. Take Bloomingdales as an example: The retailer recently unveiled its Bloomies concept, which is a smaller scale and highly organized store focused on experiences and services.
Kristina: Are retailers and brands on the right track with their experience strategies?
Jonathan: Yeah. AnyRoad customers have already seen an average 20% increase in in-store traffic after launching experiential programs, in addition to significant improvements in brand loyalty and Net Promoter Scores (NPS). Our data shows that customers tend to linger in stores up to 15% longer and ultimately spend more per visit. Experiential retail programs will only become more transformative as retailers continue to become smarter and more data-driven with their approach.
Kristina: What role does data play in the digital experience?
Jonathan: The huge benefit of most experiential retail initiatives – whether digital, hybrid, or in-person – is that they de-anonymize shoppers and allow for a more personalized experience. Retailers can use these identifying features (all of which are optional) to develop first party data profiles that can help improve the experience over time and inform other parties in marketing. Solutions like AnyRoad allow retailers to connect their reservation systems to point-of-sale, CRM and loyalty data to understand the real impact of their experiential offerings on bottom lines – like how they’ve gained loyalty, how they improved the perception of the brand and how much revenue they generated.
As the world opens up again, there are plenty of opportunities to marry the online and offline worlds – and that includes experiential strategy. For example, Michaels Stores, a customer of AnyRoad, pivoted its in-store art classes to online programming in March 2020, which strengthened the loyalty of existing customers and widened their reach to new audiences. . Now Michaels is able to capitalize on that loyalty and drive more foot traffic in physical locations after investing in digital experiences during the pandemic.
Kristina: What about in store? How can merchants better use customer data in physical spaces?
Jonathan: Digital experiences, and e-commerce in general, are often more associated with data-driven strategies than traditional retail – but the experience boom has opened new doors for retailers to capture more data on physical buyers. For example, personal style appointments, lessons and educational content, or other in-store services, all help uncover valuable data and information that can be used to personalize future experiences, increase average spend. per visit, increase buyers lifetime value, and more. Following.
The bottom line is that powerful experiences can change consumer behavior, and in order to drive that behavior change, retailers need to understand the impact of experiences on things like loyalty, customer LTV, and preferences, and then take steps to increase lifetime value. Data is what makes it all possible.