How ‘shoppertainment’ elevates the in-store experience to drive traffic and sales
Online retail sales continue to grow as changing shopper behavior places greater expectations on brick-and-mortar retail. Despite this trend, store-based retailing remains more profitable than direct-to-consumer retailing, largely due to the high cost of free shipping and returns associated with online sales.
The silver lining for retailers is that many consumers still prefer in-store shopping. In fact, Accenture recently found that 82% of tech-savvy millennials enjoy shopping in physical – not digital – stores. So, bringing shoppers back may be easier – and more fun – than expected.
The Shopping Trip as an Experience
The goal of “shoppertainment,” or experiential retailing, is to draw shoppers into the physical space by offering interactive and engaging activities. Mall operators are seasoned at implementing shoppertainment methods to differentiate their space from other retail offerings – examples include temporary events such as Santa Claus during the holidays and permanent fixtures like carousels.
Today, individual retailers of all sizes are looking for new ways to connect with customers and retain brick-and-mortar sales. What is a great way to do this? Think of the shopping journey as an experience, and make it both unique and memorable.
For example, a hardware store can conduct educational classes. A sporting goods store can hold soccer clinics for budding athletes. There is also the “try before you buy” concept popularized by Apple. The luxury home goods retailer Pitch has taken this to a whole new level by dedicating its flagship SoHo store to experiential shopping where visitors can flush actual toilets, turn on appliances and even test shower heads.
A shoppertainment strategy varies across verticals and ultimately should be developed based on careful planning. Fortunately, shoppertainment does not need to be expensive or challenging, and the following tips can help retailers outline and execute a strategy that works for them.
Seven Steps to Shoppertainment Success
The first consideration for any retailer is determining if it makes sense. Can the business make the financial investment needed? Will efforts resonate with core shoppers? Do experiential tactics have transferability across stores or do they require a more customized approach?
If the retailer believes shoppertainment is a viable strategy, they should consider these steps:
1. Identify the target audience: An event for a group of millennial girls will be very different from one for baby boomer grandfathers, so determining the audience is critical. Understanding the local demographics is important, too, and incorporating unique aspects of the community into an event or display better connects to shoppers.
2. Make it relevant: It is important to be creative but also connect the experience back to the store. Whenever possible, customers should be directly engaged with products, which will make them more likely to purchase and also encourage return visits to the store. Additionally, sales and promotional offers should tie the event and the products together in a sensible way (e.g., 15% off workout gear following an in-store yoga class).
3. Set a Budget: Shoppertainment offerings can fall anywhere on a broad financial spectrum – from a small sum to set up a workshop to a larger budget to remodel a section of a store.
Financial executives need to work with the various departments – merchandising, promotions, etc. – to determine costs and ensure allocation.
4. Determine Frequency: Some shoppertainment activities make more sense as yearly or even one-time occurrences. But others, such as classes and workshops, can be scheduled on a weekly or monthly basis. Retailers should carefully examine the retail calendar, determine relevant dates for activities, and consider promotional periods over the course of the year in order to either tie into or avoid events.
5. Understand the impact on employees: Employees are the key to a successful shoppertainment strategy. Retail leaders should conduct outreach with district and store managers to communicate value, generate excitement and create internal buy-in.
Further, activity-specific training is imperative and additional compensation may be considered if associates are going above and beyond.
6. Measure Results: The only way to know if the strategy is working is to continuously measure store traffic against sales and conversion rates before, during and after the event. Store managers should carefully track in-store performance to determine if adjustments need to be made (i.e., extending or limiting offerings) and relay to corporate.
7. Integrate Technology: A Retail Systems Research study found that 58% of retailers feel they can enhance the in-store experience with digital touch points, and should blend the digital and physical in-store. Here are two technologies that can enhance shoppertainment:
• Kiosks: A versatile option that can be anything from a simple coupon generator to a more complex interactive version such as the Hershey Smile Sample, which uses embedded facial recognition software to identify when a shopper smiles and then dispenses candy.
• Virtual Mirrors: Customers can try on a shirt, pants, dress or blouse and then look at it in different colors and styles without having to physically change the actual clothing. It also enables shoppers to compare outfits side by side and share the images through a smartphone or on social media.
As retailers search for ways to make the in-store experience more innovative and compelling, a shoppertainment strategy is essential. Done right, it will capture shoppers’ attention, reinforce brand loyalty, and drive traffic to the physical store – ultimately providing retailers with greater sale and conversion opportunities.
Bill McCarthy is general manager of ShopperTrak Americas.
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Retailers Need to Think Like Restaurants
At the Converse Store on the Third Street Promenade in Santa Monica, “customization maestros” help sneaker fans manufacture their dream shoe.
Browsing iPads, shoppers choose among 150 graphics, including those created by local artists. There is a wide selection of grommets, patches and lettering, along with swap out drawstrings of various designs and color. But all those choices aren’t sent off to a manufacturing plant, with the final product assembled in some distant factory. It’s all made in front of the buyer, inside the store.
You know, kind of like a burrito at Chipotle, a stone-fired pizza at a trendy bistro or a soy latte inside a Starbucks — light foam, one raw sugar, please.
The point is this: Made-to-order, personalized products aren’t the norm in the retail world, but in the restaurant and food service worlds, they have always been the rule. Restaurants, in essence, are manufacturers. They are a place where raw materials are assembled in made-to-order lines, and transformed into customized products in real-time. Retailers on the other hand, operate as warehouses for goods manufactured and assembled somewhere else.
Successful restaurants have always been obsessed with three things:
1. Quality of product, and that’s meant manufacturing a quality product on site.
2. Service, from the front of the restaurant where the valet parks the car to the final delivery of the bill.
3. Finally, atmosphere, by creating a distinct and welcoming environment.
These core attributes of the restaurant world — quality, service and atmosphere — are lacking the most in the retail world these days. This is especially true within mall and big-box stores. Over the last four decades in order to cut costs and compete, these fundamentals have been neglected. It’s time for the pendulum to swing in the other direction, and for retailers to adopt the mindset of restaurateurs. There’s plenty of upside, as some retailers experimenting with on-site customization have found.
Perhaps, without even realizing it, some retail brands have adopted the operational model of restaurants. Nordstrom has experimented with the 3D printing of shoes in select stores. A Japanese stationary store allows shoppers to create a customized notebook on the spot.
At independent, high-end lifestyle retailers on-site assembly has long been the norm: Surf shops created personalized boards, sanded and assembled with distinct fins on site, and skateboard stores let shoppers pick out trucks and wheels and create tailored board designs. It’s no coincidence retailers innovating with on-site customization also happen to be those we have long defined as Third Wave retailers.
These are retail spaces shoppers don’t just go to buy but to be seen, and to experience consumer culture as a lifestyle, not merely a transaction. By combining such needs with growing desire for co-creation experiences retailers can create more high-touch points along the path to purchase.
To Think like a Restaurateur:
• Find higher margins. Even though labor costs are higher in the restaurant industry, one of the biggest potential gains for retailers who adopt such strategies is actually higher margins. Consider the experiment at Levi’s with made-to-order jeans initiatives at its Manhattan meatpacking district store, which includes a complete basement sewing room. At the brand’s San Francisco store, on-site tailors hem, or cut and sew jeans. Just as a custom drink at Starbucks sells at a premium compared to old-school drip coffee, such custom Levi’s, branded as Lot No. 1, sell for a top-shelf price, $750 a pair.
• Renew the path to purchase. Beyond the benefits of higher price points, on-site assembly and manufacturing creates an entirely different path to purchase for shoppers, one more likely to build brand loyalty. Such purchases represent the chance to have more meaningful experiences. For starters, they force retailers to create radically different service environments and atmospheres. Again, perhaps without even knowing it, stores are acting more like restaurants. Having a greeter or a maître d, who always greets people, having an attractive environment, from the interior to the exterior and overall designs aimed at expanding decision and dwell times—not contract them to get a customer out as quickly as possible.
• Differentiate the store. Despite such a high execution bar, such efforts operate as differentiators for retailers — something desperately needed in the marketplace today. Such offerings stand in stark contrast to the banal atmosphere of big-box stores, and in that way bring vitality, drama and energy back to the store environment.
In an Amazon world, with consumers literally on autopilot using the retail behemoth’s Dash buttons to purchase regular necessities, retailers must exploit all possible means of setting their brands apart from mass-market norms. Shoppers are no longer enamored with shopping as entertainment — at least not for anything that can be delivered to the front door with less hassle.
• Increase touch-points. By adopting the restaurant mindset, something happens by default: Since the on-site customization model is labor-intensive by its very nature, it requires high-touch interactions with the shopper. There are perhaps, as many as six to seven touch-points on a shopper’s path to a personalized product sale; this is now the requirement of execution.
• It’s all about the food and the coffee, too.Simply offering some kind of sustenance within the store environment, be it coffee, tea, snacks or a flute of champagne during a new store opening—increases dwell times and affinity for any environment. By doing so, it keeps shoppers out of what we’ve come to call the Amazon “necessity zone mindset”, (this shopper mindset says, I can just go do that online). But food offerings inside the store create a reason to go and deliver an emotionally satisfying experience, one that’s impossible for online to rival.
By co-opting the operational model of restaurants, and rejecting the longstanding operational model (warehousing of goods) of stores, retailers have much to gain, especially among a new generation of consumers who value experiences above mere commodity acquisition. For that they always have Amazon.
Lee Peterson is executive VP, brand, strategy & design at WD Partners, a customer experience expert with offices worldwide.
Lee, as always a thought provoking piece. Totally agree that the experiential side of the physical store environment has been neglected for too long. But wanted to get your thoughts on what percentage of retailers can truly make this switch? Moving to a lower volume, higher cost operational model has to be based on your brands personalized value to the shopper. How many retail brands in the mainstream truly have that value proposition?
Amazon continues to expand Texas fulfillment network
Amazon announced plans to open a fulfillment center in Coppell, Texas. It will be the Internet giant’s eighth center in the Lone Star State.
“Our ability to expand Texas operations within three short years is the result of two things: incredible customers and an outstanding workforce in the state,” said Akash Chauhan, Amazon’s VP of North American operations.
Amazon employees at the one-million-sq.-ft. Coppell fulfillment center will pick, pack and ship larger customer items, such as big screen televisions, kayaks, and patio furniture.
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