|Ed McKiernan | President, Emerson Retail Solutions
Emerson Commercial & Residential Solutions
For this, our fourth installment of our series on the top five trends impacting grocery retail and chained foodservice markets, we take a closer look at the Experiential Retail trend.
In an effort to identify the megatrends strongly shaping retail and restaurant operations and facilities management over the next eight years, Emerson worked with global research firm Euromonitor International. Be sure to check out our previous posts where we focused on the first three trends: Digital Shoppers, Focus on Convenience, and New Retail Formats.
The growing options for how and where consumers can shop is forcing retailers to differentiate in an effort to increase or maintain foot traffic. This is driving an effort by brick-and-mortar stores to create an experience consumers can’t get online. We as an industry are seeing that experiences are important and will stand out with consumers. According to a 2014 study, 78 percent of U.S. millennials would rather spend money on a desirable experience than on goods.
So, regardless of whether you are managing a large format food retail operation, convenience store or restaurant the question you need to ask yourself is “How can I bring a relevant experience to my customers, regardless of my retail format?”
There are three prominent sub-trends we are seeing within Experiential Retail that can provide better clarity and understanding of the concept. The first is “retail-tainment,” which is the idea of utilizing technology and tools onsite to provide a level of entertainment. These technologies and tools are sometimes “gimmicky” and serve no other purpose than to provide an experience and facilitate interaction. One example is Target’s Wonderland, a holiday pop up store in Texas. The space featured 10 “spectacles,” including a jumbo Etch-a-Sketch, and it provided a retail-tainment experience aimed at families.
The second sub-trend is having experts on-site to leverage and offer a greater experience for consumers. For instance, having a nutritionist or dietician available to offer healthy eating tips or a wine expert to answer questions and suggest new wines. The third is the usage of virtual and augmented reality in brick-and-mortar locations. This can offer a cool and different experience to draw in consumers, as well as offer some immediate gains. For instance, augmented reality could be used to help consumers navigate the store and easily find the products they need.
One retailer that is already capitalizing on the Experiential Retail trend is an Italian foodservice chain that bills itself as “the largest Italian marketplace in the world”. It provides a unique experience by bringing Italy to the consumer. Consumers can shop, taste food and drinks and learn about Italian culture, through onsite wine bars, restaurants, and marketplaces.
So, what can retail and foodservice organizations do in terms of facility management and operations to help create a unique or memorable customer experience?
- Facilities – Repurpose physical assets, such as branding tools and one specific store location, or to build equity against competitors.
- Supply Chain – Repurpose possible non-experiential sites as fulfillment centers to provide faster delivery and better defend market share.
- e-Commerce – Create personalized shopper marketing and ensure a positive digital experience to attract and retain more loyal customers.
- Human Resources – Implement a consumer-centric mission that shifts employee mindset to enhance experiences that will improve equity against competitors and drive foot traffic.
- Customer Experience – Create new experiential atmosphere and bring in low or “no cost” value adds that will engage shoppers and draw in-store traffic and create upsell opportunities.
Be sure to join us for our final post in this series, which will take a look at the fifth megatrend impacting retail and restaurant operations and facilities management: Omni-Channel Proficiency.