These days in brick-and-mortar retail circles, it seems all anyone can talk about is experiential retail. Immersive, interactive, technology-enhanced — these are all adjectives that get tossed around when executives are talking about what the store of the future needs to look and feel like.
What does experiential retail really mean? For some it may be a swimming pool full of sprinkles or meditation pods.
But in reality, how many stores are actually as experiential as these out-of-the-box ideas? In a country with roughly 22.5 square feet of retail space per capita (more than any other country), the answer is: not many.
"I think the majority of the stores are really still not that great honestly," Kambiz Hemati, vice president of global retail design at Foot Locker, recently told Retail Dive in an interview. "They've fallen behind and they've become complacent. I think a lot of it has to do because they just don't know what to do."
But there's a much greater cost to doing nothing at all, than trying things that fail, said Hemati, who has spent the last 20 years designing experiential retail concepts. Granted, creating a store experience used to be much more simple than it is today.
"Before, people would come to the store and that was the first time they experienced whatever products and services that you sold. And now, I think one of the very big differences is even before they come to the store they already have done their research," he said. "It's almost like the store is just one point of the whole shopping experience."
But the fundamentals of purposeful design haven't changed, he said. "I mean, a human is a human."
That said, humans are all different and they don't all want the same experience. That means retailers can't just pick one model and expect it to work in every real estate opportunity. Big stores, small stores, pop-up shops, express stores, kiosks — all of them are essential to a retail fleet that complements all the ways in which customers can and want to interact with brands today.
During a several day conference earlier this month, executives in retail design, experience and real estate gathered in Miami to talk about the future of stores. While many agreed that meaningful store experiences will be different for every retailer, they also collectively highlighted how the basic elements center around things like localization, service and shareability.
Why build experiential stores?
While experiential store concepts may be the new table stakes in an area like Los Angeles, New York or other major metropolitan areas, there are few brands that have designed all of their stores in a highly experiential way. Some of that is because certain communities prioritize speed and convenience over inspiration and experience. But it also comes down in large part to funding, Paul Blackburn, vice president of retail development, design and merchandising in North America for L'Occitane Group, recently told Retail Dive in an interview.
Over the last five years, he's helped design and launch between 15 and 20 experiential stores. While the marketing causes a stir, the reality is that he's yet to see one that would create the kind of return on investment that could be rolled out across all of the company's stores. But, designers should be shortening their timelines on how often traditional stores need a refresh.
"[T]he notion of being able to build a store, leave it alone for five years minimum, 10 years typical, and then come back and do it again, it's never going to survive," he said. The cosmetics and beauty brand has shifted the way it approaches its store strategy over the last few years, pulling back from aggressively rolling out about 25 stores a year and instead investing more time and money in updating the stores it has.
"If you want people to know who you are you have to do something different, and that's not cheap."
Almira Cuizon
Vice President of Retail Operations at Roots
L'Occitane also opened its latest concept store last summer along New York City's famed Fifth Avenue. Given that the store is signing up three times more new customers than any other boutique (among other reasons New York retail is often more eccentric), the store is worth investing time and money into differentiating. For this store in particular, that means developing and implementing a new theme every three months, along with new experiential activities like photoshoots with provencal bikes and backdrops, or life-size advent calendars.
Experiential stores can also be a way for international brands to break into the U.S. market, at least that's the case for Roots, a Canadian outdoor apparel brand.
"[E]xperience centers become absolutely paramount because we have to educate everybody who comes through those doors who we are, what we're about," Almira Cuizon, vice president of retail operations at Roots, said during a panel at the Future Stores conference earlier this month. "So for us it was essential that when we arrived in Boston last year that our stores didn't look like a regular store you walk into. We had to create an environment where people walked in and said 'wow.'"
For Roots, that manifested in a store that emitted the brand feel, which meant hanging 1,000 socks from the ceiling and wrapping all the merchandising around its salt and pepper sweats assortment in salt and pepper-like material. Only 25% of the store was actually dedicated to selling product, she added. "If you want people to know who you are you have to do something different, and that's not cheap."
Overall, the strategy appears to have worked, in part because of another growing trend in experiential retail: shareability.
Do it for the Insta
"People came to our stores just to take Instagram pictures," Cuizon said. That's a statement that most store designers are dying to hear about their concepts. But there's a fine line when it comes to creating a space that will inspire social media sharing organically and one that comes off to millennials and Gen Zers as forced, inauthentic and worst of all — lame.
If you've walked into a direct-to-consumer brand's store recently, you're likely familiar with the kind of design that places cute vignettes around the store, featuring winding plants or colorful art around products spotlighted in their own lifestyle environment. In essence, these are carefully curated photos just waiting to be taken.
"If [customers] don't want to take pictures in your store, they're not talking about you," Cuizon said. "So make them talk about you."
User-generated content is an extremely cost-effective way of marketing and engaging with customers, but manufacturing moments could also end up taking away from the brand, Pete Trentacoste, environmental design director at Casper, said during a panel.
"We try to make the stores and the space itself beautiful and inspire good looking pictures, but we'll never put a hashtag on the wall," he said. "We're never going to be like: 'Take this picture here.' It just feels a little forced."
Localizing experiences
These days, design is one of the key differentiations of a brick-and-mortar experience. Whether it's through quirky architecture (think Burrowhouse), or local art (think Foot Locker's "power store"), retailers are using design to spark a curiosity deep enough to drive foot traffic.
Good design should be memorable and consistent enough to promote a singular look and feel, Hemati said.
"So in essence when you look at a brand like Nike or Starbucks, no matter where you go you have that same DNA of the brand that is present. But that DNA doesn't have to manifest itself in a cookie cutter type of way," he said. "The key, I think, of being successful is taking that DNA and then localizing and adapting to each community or international."
One example of how to do that is Foot Locker's "power store" that debuted in North America at a Detroit store earlier this month. The more than 8,500-square foot space is meant to serve as a "hub for local sneaker culture, art, music and sports," as the company describes.
"Every city has [its] own culture and community," Hemati said, adding that the key to making these stores authentic to the region they're in is to hire local coordinators who can spotlight the right local figures and organize relevant cultural events.
"The key I think of being successful is taking that DNA and then localizing and adapting to each community or international."
Kambiz Hemati
Vice President of Global Retail Design at Foot Locker
"We hired a local artist to do the giant mural on the exterior of the store and what we did is we didn't think about it as an art program that comes afterward and is more like an afterthought. My team and I actually designed the exterior of the building purposefully to be integral with the art," he said.
Other retailers, including other sneaker brands, are also turning to localization to amp up the experience. Nike Live, which the brand debuted in the Melrose neighborhood of Los Angeles in July 2018, was awarded Retail Dive's Store Concept of the Year for its potential to change how consumers shop.
Hemati previously served as Nike's creative director of stores from 2010 to 2012 and said that many of the ideas they had then have led up to the current design work. He also said he welcomes the design work the brand is developing at stores like Nike Live because he views Nike stores as complementary to Foot Locker.
As design becomes a more intentional factor of the store experience, it's changing consumer expectations, especially for younger generations. As Doug Stephens, CEO of Retail Prophet, recently put it, "Millennials don’t suffer from shortened attention spans. Rather, they simply have a much higher sensitivity to things that are boring."
For tech's sake
One of the most common design myths retailers buy into these days is the idea that experiential retail means more screens, robots, iPads or really any technology at all.
"The customer doesn't want to walk into a store to put their own device down just to pick up another one," Blackburn said, adding that experiences need to be seamless and purposeful. And oftentimes that can mean playing up the human element of walking into a store.
"...if you had a store — and the environment is not great, the lighting is not great — and you put a shiny object or some sort of screen in the store, I don't think you're really helping anything."
Kambiz Hemati
Vice President of Global Retail Design at Foot Locker
"Experiential retail doesn't need to be all the whistles and bells of something spectacular, but it does need to be a great customer experience," he said. L'Occitane is currently testing a way to bring that experience beyond the confines of four walls by allowing store managers to take business to corporate or commercial locations, for instance.
The human element of good service is so critical to women's workwear brand MM.LaFleur that the company intentionally keeps tech out of its showrooms.
"Our stores are a place where she can come talk to a person, she can vent if she wants to. It's a quiet, calm place to do something as mundane as shopping for clothes for work," Caroline Brown, director of experiential design at MM.LaFleur, said during a panel at Future Stores earlier this month. "To feel familiar I'm not going to put a nine-foot screen in there, I want her to feel like she's at home trying on clothes with her best friend."
The same example applies to Verizon stores, Hemati said. As a tech company, more technology in stores is just redundant, he said.
"I love technology and am an early adopter of all kinds of tech, but I still believe if you had a store — and the environment is not great, the lighting is not great — and you put a shiny object or some sort of screen in the store, I don't think you're really helping anything," he added. "And I think a lot of retailers have done that in the past because they're worried and want to have a reaction and they are trying to compete with Amazon or whatever."
It can be exciting for designers and technologists to use the store as a testbed for the experiences that could define the future of physical spaces, but, Hemati cautioned, it's important to make sure the technology is solving a problem, either for the customer or the sales associate.
