The Art & Science of Experiential Retailing

Next-Gen Destination

Consumers say personalized service from a sales associate was an important factor in determining the stores they choose to shop.

79%

Source: BRP, “2019 Special Report: Personalization”

One Part Art, One Part Science.

There are two key ingredients retailers need to create a store that’s a destination in its own right: knowledgeable staff that can provide personalized service and an experience shoppers can’t get elsewhere. The IKEA Planning Studio is an example of both. The Swedish home furnishings retailer brought its smaller urban format to the U.S. in April on the Upper East Side of Manhattan. The inventory-less store – all purchases made in the store will be delivered, at a cost, to shoppers’ homes – features IKEA planning specialists that are on-call to dole out inspiration and solutions to help city-dwelling shoppers maximize their smaller spaces. IKEA experts are available by appointment to help customers design and plan their projects. For shoppers who prefer a more DIY approach, the store features areas outfitted with computers where customers can interact with IKEA’s online room-planning features. Mattress retailer Casper has also found an interesting way to engage shoppers without actually selling merchandise. The Dreamery by Casper, located in the Soho neighborhood of New York City, offers scheduled 45-minute naps for $25. The serene space gives shoppers a way to rest and recharge, with the added benefit of growing brand awareness and giving shoppers a way to “try before you buy.” Meanwhile, Camp, on 5th Ave in New York City, brands itself as a Family Experience Store (it’s even trademarked the phrase). The toy store boasts rotating themed experiences and notes “every surface is a seamless blend of play and product.” The Instagramable store isn’t just selling toys in a pretty backdrop — it offers workshops and interactive areas for kids to play. This summer the store’s theme is Cooking Camp. The “immersive retail experience” explores the evolution of food, offering craft classes such as Play-Doh Veggie Sculpting. In similar fashion, when toy retailer FAO Schwarz returned to New York City late last year the store offered a toy grocery store where kids can fill child-sized carts with play food, the FAO Schwarz Baby Doll Adoption Experience where nurses and doctors walk children through the adoption process and teach them how to care for their dolls, an on-site STEM Professor doing interactive demos, a candy shop, kid’s spa, and much more beyond just shopping.

Photo credit: IKEA

Nike by Melrose offers a selection of nike.com best-sellers as well as city-specific styles which are determined by Nike digital commerce data.

Shoppers have grown accustomed to a tailored shopping experience. In the digital realm retailers offer up products and promotions personalized to customers’ unique tastes, but in the brick-and-mortar space personalizing inventory based on individual preferences is infinitely more difficult – but not impossible. Nike has taken the concept of localized inventory and ran with it in the physical world. Last year the athletic apparel manufacturer and retailer opened a concept shop in West Los Angeles that builds its inventory based on what consumers are buying in surrounding neighborhoods. "We continue to explore the physical and digital intersection through our new Nike app,” says Nike chairman, president and CEO Mark Parker. “Through smart retail, we can aggregate consumer buying patterns to better inform localized preferences and turn those into new growth opportunities." The small format, data-driven store has a pop-up vibe, with the retailer analyzing buying patterns, app usage and engagement of local NikePlus members to stock its shelves. New apparel, footwear and accessories — all specific to LA’s needs regardless of Nike’s broader seasonal priorities — fills the store on a bi-weekly basis (a Nike first). While innovators like Nike are stocking their stores with inventory based on hyper-local demand, others are breaking new ground with inventory-free stores. Nordstrom plans to open two new Nordstrom Local service hubs in NYC this fall. The inventory-free stores offer services such as online order pickup, alterations, styling and more, tailored to reflect the unique needs of local customers. Nordstrom first introduced the concept in Los Angeles, less than two years ago and says customers who visit Nordstrom Local spend two and a half times more on average. “In large cities like LA and New York, speed and convenience are critical to a positive shopping experience,” a Nordstrom spokesperson tells RIS. “As the retail landscape continues to evolve at an unprecedented pace, the one thing we know that remains constant is that customers continue to value great service and convenience, and finding new ways to engage with customers on their terms is more important to us now than ever.” In Los Angeles, Nordstrom Local has seen increased demand for next-day pickup services, with 30% of all next-day pickups conducted in the three Nordstrom Local locations. The new store concept is helping the iconic department store chain connect with millennial shoppers – customers tend to be younger and shop more frequently than customers not utilizing the neighborhood service hubs.

Next-Gen Destination

Localized Inventory

Retailers report they only have a "few advanced systems and processes" in place to achieve smooth, accurate and cost-effective omnichannel inventory management.

Source: RIS, “Sharpening Omnichannel Inventory Management to a Razor’s Edge”

49%

Retailers named inventory optimization as a top technology for 2019.

Source: RIS, “29th Annual Retail Technology Study”

46%

Conclusion

Retailers currently offer buy online, pickup in-store.

Source: RIS, “Sharpening Omnichannel Inventory Management to a Razor’s Edge”

38%

The benefits of an effective buy online, pickup in-store (BOPIS) solution are numerous. It drastically reduces last mile fulfillment costs, draws customers into the physical environment, and meets shoppers’ need-it-now demands. Currently, 38% of retailers offer the service, according to RIS’ “Sharpening Omnichannel Inventory Management to a Razor’s Edge” report. But the service is quickly becoming table stakes as retailers look to compete in the omnichannel age. The good news for retailers is that in addition to the obvious benefits BOPIS offers, the service is helping make enterprises more profitable. In fact, 33% of those that offer BOPIS are profiting from the service today, and another 38% believe the service will be profitable within two years, according to RIS’ “16th Annual Store Experience Study.” However, the actual in-store pickup experience is often lacking . Shoppers are forced to hunt out the pickup counter, and are subject to long waits as in-store staff struggles to locate orders in a timely fashion. To combat this, leading retailers are investing in novel BOPIS approaches that insert a level of cool and entices shoppers to order online and pickup in-store just to experience it. For example, Walmart has enjoyed overwhelming success with its vending-machine style pickup towers. Following a small-scale pilot the automated BOPIS solutions are now live at more than 700 Walmart stores.

BOPIS PROFITABILITY:

Source: RIS, “16th Annual Store Experience Study”

Smart Screens

Retailers believe customer service and satisfaction are top benefits delivered through deployment of self-service technologies in-store.

Source: RIS, “Streamlining the Store to Simplify Shopping”

76%

In addition to analyzing the customer standing in front of it, Sephora’s smart mirror’s recommendations are informed by real-time contextual elements including climate, season, and top-trending items.

Photo Credit: Sephora and Creative Agency Wildbytes

Tech-savvy retailers are keeping their in-store environment fresh and interactive with next-gen digital signage designed to both engage and entertain. Digital signage is not new, retailers have been leveraging it for years to rotate in-store content and promotional offers, but now retailers are able to personalize the screens to connect with shoppers on a deeper level. While a personalized, tech-driven, in-store experience is still in its infancy, many leading retailers have already taken the plunge, and many more have plans to do so. Twenty-eight percent of retailers have named developing personalized marketing capabilities as a top tech-driven strategy over the next 18 months, according to RIS’ “29th Annual Retail Technology Study.” Cutting-edge cosmetics retailer Sephora, for example, has installed an intelligent digital mirror in its flagship store in Madrid. Powered by artificial intelligence, the smart mirror is able to deliver hyper-personalized experiences and product recommendations. The mirror uses a smart engine that accurately blends actionable insights about the person in front of it, including gender, age, look, and style. It can differentiate between people wearing neutral or bright colors, bold or conservative styles, and floral and geometric patterned clothing. Using these parameters, the mirror makes personalized recommendations. Neiman Marcus has packed its new store at New York’s Hudson Yards with more than 60 smart screens that broadcast both promotional messages and real-time content. Digital directories found at each of the store’s entrances and in the customer service area provide customers with a quick search of departments, vendor locations, in-store events, and promotions. While most digital signage use cases are designed to provide shoppers with information or marketing material, Neiman Marcus is leveraging some of its screens for just plain-old fun. An audio service allows customers to access and modify the store’s music like a digital jukebox. Shoppers can choose a song from a pre-set playlist or vote on a queue of upcoming songs. Signage throughout the store reveals what song is currently playing, who picked the current song, and what’s coming up next.

51%

Experiential retailing requires a blending of art and science, as well as a seamless flow between online and offline. Next-gen technology and a wealth of consumer data can help provide a differentiated customer service, but only if retailers invest in the tools to do so. Building memorable experiences involves a strong foundation of technology, as well as a localized approach that helps build a community though classes, interactive experiences, micro-tailored inventory, or high-tech interactive screens.

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Walmart’s buy online, pickup in-store customers retrieve their orders with a next-gen self-service pickup tower that infuses a level of cool into an otherwise mundane task.

The massive self-serve pickup stations are positioned front and center at the store’s entrance and once the shopper shopper scans the receipt a series of mechanical arms and conveyors present the order in a matter of seconds. Drawing customers into the in-store environment to interact with and experience a BOPIS solution is the epitome of omnichannel success. Nordstrom and Rent the Runway (RTR) have gone live with a pilot partnership in four Los Angeles- based Nordstrom stores where RTR members can drop off their most recent rentals in a Nordstrom store. The convenient drop-off allows customer returns to be processed in real-time and their next rental shipped out quickly, allowing members to best utilize their apparel rental subscription. For Nordstrom the partnership increases foot traffic in its stores with the goal of converting that traffic into sales.

33% Profitable Today

21% Profitable in Less Than 12 Months

17% Profitable in 12-24 Months

The art of teaching is the art of assisting discovery.

Head of the Class Retail

Mark Van Doren, American writer and Columbia University professor

Buy Online, Pickup In-Store

Personalizing the customer experience

48%

Empowering store associates

Source: RIS, “16th Annual Store Experience Study 2019: Doubling Down on Transformation”

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The IKEA Planning Studio offers IKEA experts by appointment to help customers design and plan their projects.

There’s perhaps no greater area where art comes into play in experiential retail than in education. Retailers are discovering an impactful way to engage customers and brew loyalty: Teach them something and assist discovery. The Home Depot has known this for years. Offering workshops to inspire and instruct shoppers on home improvement projects, the retailer offers Do-It-Yourself and Do-It-Herself workshops, as well as kids workshops to introduce future DIYers to the brand through skill-building classes. Appealing to DIY crafters, Joann (formerly Jo-Ann Fabrics) unveiled its first concept store last June featuring The Creators’ Studio, a large open community space where customers can take classes, host events and rent machines to work on projects. The classes were developed based on trends and analytics. For example, Joann partner Pinterest saw a surge in searches for DIY personalized T-shirts and the retailer materialized this data in a new area where customers can learn to make custom shirts using electric cutting machines. The store also features a Craft Creator touchscreen kiosk, which provides craft projects that are popular on Pinterest, personalized for customers based on their preferences. For music lovers, Guitar Center opened its newly redesigned flagship Hollywood store location last year complete with a state-of-the-art, eight-room lessons facility. The store offers private lessons, jam sessions, recording lessons, group lessons and a rock show program, which connects customers with other musicians at similar skill levels so they can experience being in a band. For foodies, home goods retailer Bed, Bath & Beyond is piloting "The Kitchen," at its East Hanover, NJ, location. The dedicated space offers customers hands-on or demonstrative cooking lessons, allows them to try products the retailer sells while cooking, and eat what they create at a communal table.

Bed, Bath & Beyond is piloting "The Kitchen," offering cooking lessons and a communal table to eat what they make.

The Creators’ Studio at Joann’s concept store is a large open community space where customers can take classes, host events and rent machines.

Ensure your online experience seamlessly draws shoppers into stores where your brand identity can be reinforced without friction

Tailor your inventory to the local market

Personalize the experience with interactive, smart screens

Provide an in-store experience that develops a community

Assist discovery in stores, through classes or hands-on product demonstration

Give shoppers new, rotating experiences that keep them returning to physical stores

One Part Art, One Part Science.

Appealing to DIY crafters, Joann (formerly Jo-Ann Fabrics) unveiled its first concept store last June featuring The Creators’ Studio, a large open community space where customers can take classes, host events and rent machines to work on projects. The classes were developed based on trends and analytics. For example, Joann partner Pinterest saw a surge in searches for DIY personalized T-shirts and the retailer materialized this data in a new area where customers can learn to make custom shirts using electric cutting machines. The store also features a Craft Creator touchscreen kiosk, which provides craft projects that are popular on Pinterest, personalized for customers based on their preferences. For music lovers, Guitar Center opened its newly redesigned flagship Hollywood store location last year complete with a state-of-the-art, eight-room lessons facility. The store offers private lessons, jam sessions, recording lessons, group lessons and a rock show program, which connects customers with other musicians at similar skill levels so they can experience being in a band. For foodies, home goods retailer Bed, Bath & Beyond is piloting "The Kitchen," at its East Hanover, NJ, location. The dedicated space offers customers hands-on or demonstrative cooking lessons, allows them to try products the retailer sells while cooking, and eat what they create at a communal table.

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