The Experience Economy and the future of retail.
Aug 05, 2019
As one of the first customers through the doors of the newly launched Samsung Kings Cross (KX) concept store in London, I asked myself the question that has plagued marketers and advertisers for the last decade: is the high street really dead?
It’s hard to believe when brands like Samsung are so keenly opening, and investing in, new stores like this. But, I wondered, is this instead indicative of a new type of store; one that is more geared towards serving the needs of a new generation of consumers.
First off, I should clarify that the Samsung KX store really isn’t a shop. With everything from the world’s first vertical 10 metre wide screen – on which customers can create digital graffiti – to an interactive glimpse into the future of automotive driving, it offers visitors a flavour of every kind of Samsung product, without any real push towards sales. There are no price tags, no catalogues and (from my enquiries) no back of store stock. The staff have been given a new type of retail training, apparently to offer people an experience rather than a sale. Once the store – self-proclaimed as a place to “Do What You Can’t” – has officially launched in September, it will also offer cooking classes, pilates and more. It’s certainly an incredible setting and an enjoyable experience for any visitor – but what’s its purpose?
In the last few years, we’ve seen a rise in the need for interactive brand experiences that serve the needs of the customer, treating retail and the shopping experience as theatre. The value exchange certainly seems to have tipped in favour of the millennials who will dominate retail over the next decade. According to Ad Age, 17 to 34 year olds will spend $200 billion annually, and $10 trillion over their lifetime. Therefore it’s crucial for retailers to understand the millennial customer, their love of convenience and their apparent preference for immersive experience over point blank sales and materiality.
We’re seeing this trend towards experience in retail across many different sectors. Take Lego Wear’s recent pop-up store, created in collaboration with Snapchat. The physical space contained nothing but a plinth with a Snapcode which, once scanned, allowed visitors to enter a completely virtual store. Sci-fi it may seem but it’s almost certainly the future for product launches, with a focus on creating a unique and memorable experience over simply showcasing the goods.
We’ve also seen the desire for a strong engagement in the retail environment grow within our own client base, recently partnering with Epson on a branded experience activation, popping up at shopping centres across the UK to target university freshers with their latest EcoTank printer. And whilst engagement and awareness were always of utmost importance, it was also crucial for us to create an immersive and shareable experience for visitors to the stand – which we answered by creating a three-way activation complete with an Instagrammable prop-filled moment and interactive time trial competition. It seems the link between consumer brand awareness and a memorable retail experience is stronger than ever.
Is the era of experience shopping now upon us? There is no doubt that consumers now look to brands to engage with them – they have to work harder than ever to give shoppers a reason to walk into the store, stay and connect. As such, it feels like disruptive brands have become focussed on creating a culture and community, using stores and, increasingly, pop-ups to build these community pockets through activations and immersion.
We need only look towards Nike’s new flagship NYC store, opened at the back end of 2018, as an example of innovation within the retail experience economy. The store champions the brand’s community based memberships, allowing customers to interact with the store through the Nike app and Nike Plus. Users can scan QR codes on mannequins for instant check-out and free delivery, and visit a top floor entirely dedicated to members. Giving people added value for being part of a community automatically creates the layer of experience that millenials value over a predominantly material offering. And the results speak for themselves. A report by Business Insider revealed that Nike’s House of Innovation 01, in Shanghai, welcomed 600,000 visitors in the first month, with a new Nike Plus member signing up every two minutes. According to Heidi O’Neill, the president of Nike’s direct-to-consumer business, these members spend more, and shop more. “And it’s just because they’re having a better experience with the Nike brand,” she adds.
This trend towards personalisation continues to grow – consumers want brands to understand them and use this information against interactive experiences, content and activities. Which in turn, as Nike has demonstrated, gives brands more flexibility and creativity both online and in physical spaces. It’s no longer just about racks of clothes and still life images of models.
So perhaps the high street isn’t dead, it’s just in flux. The urge for a wander through the shops isn’t going away any time soon, it’s just that now we expect more of an experience from the brands we love.