Despite Seismic Shift to Digital, Will Customers Still Prefer an Experiential Retail Experience

In reality, digital vs experiential retail is not an either/or question, it is an 'AND' situation. Both will exist and feed off each other. The keyword here is 'Experiential'.
Despite Seismic Shift to Digital, Will Customers Still Prefer an Experiential Retail Experience

It is no secret that today, there is a strong case for a shift to an ‘in-home experience’. Calling it an ‘in-home’ experience instead of digital or online seems apt, as one may purchase online, however, home is where the experience is delivered.

Digital vs Experiential Retail Experience

In reality, digital vs experiential retail is not an either/or question, it is an ‘AND’ situation. Both will exist and feed off each other. The keyword here is ‘Experiential’.

For every case of ‘in-home experience’, there will be one for ‘experiential retail experience’ and vice versa. The fact is, both will coexist.

So, the question is, which part will stay relevant in out-of-home spaces and which will move indoors?

Well, the less differentiated experiences will move in-home. For example, packaged products that don’t need trial and where a consumer sticks to a set of brands, i.e. mostly FMCG brands. But, the categories which cater to variety-seeking consumer behavior will see a continuation of people stepping out to browse, touch, or feel the product for seeking out the new. Consequently, wooing the consumers with ‘experiential delight’ will be important for such categories. 

Beauty and personal care is one such category. Trying out new shades and checking the sensorial feel becomes imperative for consumers to make their choice of product. The same applies to clothing for special occasions wherein a consumer wants to be sure of the fitting, the feel of fabric, its color, etc. Experiential retail, therefore, becomes critical for recruiting new customers, aiding browsing, to drive trials and brand switches, or for seeding new categories. Consumers will seek this as part of their shopping process. It would be interesting to see if online players can deliver this, with an in-home experience.

Why Consumers Need an In-store Experience for Beauty and Personal Care Products?

Beauty products are high involvement and high risk. These products are used on the face and skin. So, consumers feel the need to scrutinize them with utmost care. Their trial to check the effectiveness and sensorial deliveries are important aspects of testing the product, before making a purchase decision. Added inputs from beauty advisors or experts help further and the overall in-store experience delivery goes a long way in building trust and in new customer recruitment.

Certain aspects such as the fragrance of a product cannot be experienced online. The experience of spraying the perfume from a tester cannot be replaced by any other medium. The true shade of the product can only be tested at a store. There is nothing like trying the compact or lipstick in front of the mirror. At the store, you have the privilege to get your skin tested by an expert and then be recommended the best-suited product for your skin type.

 In addition to all of this, a consumer can walk into a store and walk out with the products right away if they decide to buy them. So it is necessary to deliver omnichannel experiences that integrate online and offline combining the desired experience with convenience so the customers felt safe, yet satisfied.

The Coexistence of In-Store and In-Home Shopping Experience 
 
There is no doubt that in-home (online) and in-store (offline) experiences, both will coexist and serve different needs of the same customer. From a retailer and brand’s perspective, it would be best to ensure that they complement each other.

This is perhaps the key reason why online players and D2C brands started selling through retail stores after a while. If they do not set up a retail store, there is a high possibility that they won’t be able to recruit new customers on an ongoing basis. For example, Amazon has started setting up ‘Amazon book stores’ and ‘Amazon 4 star’, in the US after putting several bookstores and chains out of business.

When it comes to trying new products, brands, and categories, retail stores offer an instant here-and-now discovery and/or trial experience. Online players do manage to drive trials in commoditized and low-risk categories.
Categories of products or services that lend themselves to delivering a relevant experience, will still draw people to their premise/retail store. Some of the examples are - cinematic experiences, fast-food or dining experiences, and even salon services. Though at times for one’s convenience,  one would watch a movie at home, get food delivered at the doorstep, and even call the salon staff at home, consumers agree that these services are best experienced at the theatre/restaurant/salon itself. 

The Impact of COVID-19 And How It Disrupted the Retail Industry 

At a very fundamental level, can you stay at home and enjoy everything forever? The post-Covid era has certainly proven that. 

Humans are social creatures and cannot be caged. Providing for the needs, shopping, and entertainment will always entice people to move out of their homely existence. Being outdoors has been and will be seen as ‘exciting’. 

Therefore, now the onus is on the retailers to make it exciting for the consumers. This would require:
1.    A strong and dynamic understanding of customer needs
2.    Crafting and updating your proposition and experience to cater to these needs

The pandemic forced many retail stores and businesses to close down, and it resulted in thousands of people losing their businesses and jobs. This wave for the retail industry shook them to the core but also encouraged them to think innovatively and try to discover how technology could help them get back in the market. As the restrictions due to the pandemic were gradually easing, businesses and stores started building themselves again to get back in the industry. Well, they returned with a much-developed version of their store, brand, and business. 

Earlier this year, nearly 50 percent of the surveyed customers said that they planned to move out for shopping once the COVID restrictions are lifted. In this case, brands offering an in-store experience were ahead of those that focused only on e-commerce. Luxury brands are already capitalizing on personalization and localization. 

The experiential retail is here to stay, and the pandemic only accelerated the reinventing process for retail stores.  
 

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