Retail-tainment: Leveraging Digital to Transform the Store Experience

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Retail-tainment: Leveraging Digital to Transform the Store Experience

By John Kenwood, Capgemini - 02/21/2019

Apparel manufacturers can no longer rely on brand recognition to drive sales. Today’s shoppers are looking for brands that reflect their individual lifestyle, values and experiences. This often creates a challenge for today’s apparel companies, as retail shoppers crave engaging experiences that are consistent across all channels whether in store or online.

Many companies struggle to leverage the in-store experience to create lasting connections with shoppers. Online and mobile channels have made in-store shopping seem inefficient and inconvenient. They’ve also undermined the store as a “third place” where consumers can share experiences.

Additionally, millennials have grown up with technology, and in-store shopping is no longer integral to their lives. At the same time, entertainment is. Millennials seek out unique experiences and emotional rewards over more practical concerns.

This has a growing number of apparel retailers looking at how they can leverage their real estate to create loyalty-building experiences for their customers. Welcome to the era of retail-tainment.

Interactive, customer-relevant — and digitized

Retail-tainment — also called experiential or immersive retail — involves interactive and customer-relevant concepts, from one-of-a-kind events to brand extensions built around participation and community. Very often it involves leveraging technology, from social media to Internet of Things (IoT) to virtual reality (VR).

The need for retail-tainment has never been more compelling. A dismaying 40 percent of today’s consumers consider in-store shopping a chore. That’s according to a recent Capgemini study, “Making the Digital Connection: Why Physical Retail Stores Need a Reboot,” which surveyed 6,000 consumers in the United States, western Europe and China.

In response, consumers are exploring new retail models. The study found that 57 percent of shoppers are open to buying from technology players such as Apple and Facebook. And 71 percent would consider bypassing traditional retailers altogether.

Yet the retail store is far from irrelevant. Seventy percent of consumers still want to touch or experience products before they buy, the study reports. But 57 percent want stores to serve a greater function than just selling products.

Retail-tainment can satisfy those demands. But to realize that promise, apparel brands will have to take advantage of existing technology and, most likely, make new technology investments. Even if the retail-tainment encounter exists purely in the physical world, it will involve the capture of data — often in real time — to help you better understand and serve customers.

Those investments begin with a solid in-store technology foundation. That’s where many retailers fall short, the Capgemini study suggests. While in-store digitization is a top priority for 78 percent of retailers, 40 percent are still implementing basics such as WiFi, and only 18 percent have deployed digital at scale. That will have to change if retailers want to engage digital-native shoppers.

All the right attributes

What separates retail-tainment from retail-as-usual? To be effective, your retail-tainment initiative should embody these traits:

Experiential — Retail-tainment should immerse your customers in your brand, involving sight, sound, touch and more. To that end, you need to take a holistic approach to the retail experience.

For example, you might present merchandise by event or function — dinner party, office, clubbing, theater — with a “movie set” of the activity. You could include tickets, reservations and transportation. You could add relevant in-person or electronically delivered advice such as menus, decorating and etiquette.

The experience will often involve community. Consumers increasingly want to belong to something they value and connect with likeminded people. Retail-tainment allows you to place your brand at the heart of community experience.

Some examples? Glossier, the “people-powered beauty ecosystem,” is creating “Instagram-able” pop-up shops that sell makeup — and drive user-generated social-media content. And outdoor retailer REI is famous for its in-store climbing walls as well as group-oriented classes, outings and adventures.

Emotional — Consumers want a greater emotional reward than pricing or convenience. After all, apparel is all about how products make customers feel. Design, color, shape, texture — all the elements integral to your products are also integral the shopping experience.

In fact, emotion is the key to customer loyalty, suggests a recent Capgemini study, “Loyalty Deciphered: How Emptions Drive Genuine Engagement,” which surveyed 9,000 consumers in the United States, western Europe and Brazil.

In the study, 82 percent of consumers with high emotional engagement said they’d always buy the brand they’re loyal to. That compares with only 38 percent of consumers with low emotional engagement. What’s more, 70 percent would spend up to twice as much, and 81 percent will promote the brand to family and friends.

But consumers don’t want the emotion to be one-sided. Eighty six percent of emotionally engaged consumers want brands to reciprocate.

To that end, many customers want to know their trusted brand gives back. For example, footwear innovator TOMS is known for matching every pair of shoes sold with a new pair for a child in need. To help customers experience this program, TOMS has placed VR glasses in stores to let customers see and hear shoes being given away.

Authentic – Climbing an artificial rock wall makes sense in an REI store. It probably doesn’t at Brooks Brothers. Your immersive experiences have to be integral to your brand.

Luxury jewelry retailer Tiffany & Co. is using authentic retail-tainment to appeal to younger shoppers. Capitalizing on the Hollywood classic “Breakfast at Tiffany’s,” it opened the Blue Box Café in its New York flagship. With a décor that reflects the brand’s iconic robin-egg blue, the restaurant attracts a multi-generational clientele — in the process, helping younger patrons build positive brand associations that could make them future buyers.

Sportswear brand Tommy Bahama takes a similar approach. In its Palm Springs store, the company has installed a bar driving higher-than-expected sales in both the bar and the store. On the island of Maui, the company added a food truck to deliver the brand to the broadest audience possible.

Digitized — As with the TOMS example, so much of today’s retail-tainment is being enabled by emerging technology. Digital displays, internet-connected cameras, augmented reality, conversational commerce, predictive analytics and machine learning all offer possibilities. Many of these capabilities didn’t exist even a few years ago but are now becoming affordable at scale.

In the past we thought of technology as creating a barrier to personal interaction. Now, technology can amplify engagement. For instance, premium apparel brand Tommy Hilfiger has created a virtual shopping experience at select stores, where customers can watch a runway show in 3D, 360-degree VR.

But even if your retail-tainment exists only in the real world, technology can capture valuable data. A good example is the Coca-Cola Freestyle self-service drink dispenser. Freestyle features a single spout that can dispense up to 165 drink products, plus custom flavors, by combining ingredient packets with sweetener and water on the fly. A mobile app lets customers create and save flavor combinations. A digital connection continually transmits supply and demand — allowing Coke to manage its supply chain in real time and capture taste trends that drive new product introductions.

Value-added — Finally, retail-tainment needs to deliver value to both your customers and your business. It should involve experiences that consumers desire – and that put them in the mood to buy.

A good example is ubiquitous microbrew Stone Brewing, which offers beer-themed events that customers love. Now the company is about to launch Stone Hotel, a $26 million, 99-room beer-centric hotel.

Will that investment pay off? Time will tell. But whether or not the hotel is profitable, it could still deliver returns in brand awareness, community and loyalty. With retail-tainment, the key performance indicator (KPI) is no longer sales per square foot. Instead, it’s experiences per square foot. No retailer yet knows how to convert that into dollars and cents. But if your experiences per square foot are zero, you’re falling behind.

So where should your retail-tainment begin? Start with your customers. Retail-tainment requires a fundamental shift in how apparel brands view consumers. Instead of focusing on where your customer fits into your business, you need to think deeply about where your business fits into your customers’ lives. That will point you to the experiences you need to create — and the digital technologies that will help you create them.

John Kenwood is a vice president and head of the North America retail practice at Capgemini, a global leader in consulting, technology services and digital transformation.