Experiential Retail Stages an In-Store Comeback

Experiential retail is making a comeback as brands pivot from traditional sales models to more engaging shopping experiences driven by consumers seeking more meaningful interactions with products and brands.

Consider Mastercard, which launched an immersive shopping experience in Fort Langley, British Columbia, that runs through Dec. 15 as part of an initiative to support small businesses. The program features a Mastercard-created storybook, themed storefront displays, and in-store art installations, with participating customers receiving collectible wooden puzzle pieces depicting local landmarks.

Meanwhile, to revitalize its century-old brand, La-Z-Boy recently unveiled a new 12,600-square-foot showroom in Chicago’s Lincoln Park neighborhood. The store features experiential elements like a Recliner Runway, lifestyle-themed sections and digital customization tools to build a recliner.

Merchants can stand out in a crowded marketplace by offering different experiences and ways to connect with brands.

“I think it’s making a comeback because brands are looking at it as a way to differentiate and draw people in, not because consumers demand it,” Greg Zakowicz, senior eCommerce expert at Omnisend, told PYMNTS. “This difference is why it currently isn’t a standard part of the in-store shopping experience. Brick-and-mortar retail still works because consumers like the tactile experience. Combining that with entertainment and tools like VR that enhance the experience can be beneficial, but I’m not sure it’s sustainable. Stores have tried AR and VR but nothing has yet to really take off. “  

While Zakowicz said AR and VR will become a part of the in-store experience for many brands, using that technology is “still a ways away from that. What we may see in the interim are these limited-time experiential stores or setups aimed at drawing people in at certain times of the year or for themed events. From there, brands can analyze what worked and what didn’t and make everyday adjustments accordingly. This concept also allows brands to adjust to constantly shifting consumer trends without being stuck in an outdated store design and concept.”    

Consumers want unique and engaging shopping experiences, according to Sudip Mazumder, senior vice president and retail industry lead in North America at the digital consultancy Publicis Sapient.

“Several key factors are driving this trend,” he said. “Even with the rise of online shopping, many consumers still crave the tangible, physical shopping experience. Experiential retail offers a way for brick-and-mortar stores to differentiate themselves from online competitors. Additionally, today’s shoppers want more than just products; they’re looking for meaningful experiences. … Physical stores also provide a space for social connection, where community building and social interaction can thrive—something that’s highly valued in the digital age.”

Mazumder pointed to pop-up shops, which generate buzz with their unique and temporary nature, and in-store events like workshops and product demonstrations that engage customers and build brand loyalty. “Retailers are also using technology to offer personalized shopping experiences and create immersive environments that transport customers to new worlds,” he said.

A number of brands have implemented experiential retail strategies to capitalize on this trend, creating memorable and engaging customer experiences. Here are some notable examples:

Prada has its pop-up café inside Harrods, offering a slice of Milan with its elegant design and high-quality Italian cuisine. Similarly, H&M has transformed the fitting room experience in Barcelona with a digital holographic mannequin that allows customers to interactively customize outfits.

In New York City, Lego’s flagship store showcases towering structures and augmented reality experiences that blend play with technology.

Nike capitalizes on major marathons by creating store experiences and merchandise for local running communities. Walmart, Best Buy, and other retailers are also getting into more immersive shopping experiences, melding online and in-store shopping.

Combining online and in-store experience dovetails with a growing desire among consumers to have digital shopping experiences in the stores, according to the PYMNTS Intelligence study “2024 Global Digital Shopping Index: U.S. Edition,” created in collaboration with Visa Acceptance Solutions. A third of U.S. shoppers prefer a Click-and-Mortar experience, blending online and in-store shopping. While 20% use digital tools to enhance in-store visits, 11% opt for online ordering with in-store pickup.

This focus on creating meaningful interactions aligns with the growing experiential retail trend. However, that’s a term often misunderstood or overused, according to Neil Saunders, managing director of retail at the research firm GlobalData.

“Experiential retail is something of a buzz word that is now used very loosely to mean that some kind of value has been added into the process of selling,” Saunders said. “This is often used to differentiate, to drive brand affinity, or to make the customer feel a certain way. It arguably has always been a part of retail. What retailers need to do is align the experience with what the customer wants. Sometimes shoppers don’t want bells and whistles. They just want a reliable, convenient experience. Other times, consumers appreciate something more immersive. The thing to avoid is gimmicky tech or wizardry that isn’t relevant and is being used for the sake of it.”

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