What’s driving experiential retail in 2017 and beyond?
Cherry Creek North
At our core, we’re creatures of the edge. We live among the trees. We look out over the savannah for opportunity. We have a desire for the unexpected, for discovery. It’s deep within us. The more interaction we have with the predictable elements of our society, such as digital screens, the more desire we have to flirt with the edge.
Humans live longer today than ever before. In part, that’s because the modern world with its building codes, ADA-compliant spaces and safety regulations controls our behavior and keeps us safe. As a result, our experiences are more accessible, less dangerous but more prescribed. On the flipside we have less opportunity to explore the edge. Yet, we still seek it. Casino gambling, high-octane movies, video games, they’re all various expressions of seeking the thrill of the unexpected in contemporary life. Sports fandom and participation provide the exhilaration we seek via camaraderie and the emotion of defeat or victory—experiences are not common in everyday life.
Some argue that our increased screen time supplants our desire to make human connections, but I don’t think that’s true. As our species has evolved, we’ve been successful because we’re social animals. We enjoy advantages as part of the collective and that can’t be undone by our current infatuation with screens and smartphones. I propose the more screen time in our lives, the more pent-up desire exists to make actual connections with people. Humankind’s innate desire for connection is powerful. These days, it drives us to spend more time in lifestyle situations, restaurants, or downtown.
If we can create experiences that respond to our desire for social connections or give us an opportunity to feel that rare thrill of life, that gives retail a greater chance at success. As designers, that’s interesting to us.
Recently, we took a deeper look at what makes experiential retailers successful today. When you think of experiential retailers, they tend to fall into three domains:
- Health and wellness: These are the places where we get fit and healthy, do yoga or pilates, or get a massage. Successful retailers in this category take something that could be clinical or athletic and transform it into a social experience.
- Food and beverage: Lately, places that just give us a quick burger for our money aren’t doing as well as those that create a setting where we want to spend social time.
- Entertainment, sports adventure: These experience retailers include everything from cinemas and bowling alleys to indoor skydiving centers. When done well, these places specialize in delivering the unexpected, they take us to an edge of something. They’re about excitement.
Pearl Street Splash Park. Photo by Joy Cohan.
Overlap is key
It wasn’t that long ago that the experiential retailers landed squarely in one of these domains. Now, we are seeing that the retailers that rise to the top tend to overlap with two or three of these categories. Think of a spa where you can have a healthy meal or hear a lecture, a movie theater where you can get a craft beer, a food hall that hosts poetry readings or a grocery store with an indoor garden where the community participates in produce cultivation.
What aspects of these experiential retailers are likely to result in success? Our experience design team has outlined five facets that poise today’s retailers for a long term resonance:
1. Gender inclusiveness
Though the decades, the tenants and tonality of many indoor shopping centers evolved into environments that target the female shopper, but have less to offer to the male population. As a result, the prospect of spending a day together at the regional shopping mall is often overlooked by couples or families in favour of experiences that appeal more equally to all members of the household.
Today, we see that gender inclusiveness creates more successful places. Lifestyle centers are growing in prominence. Lifestyle centers are the evolution of the shopping center—they tend to be open air, semi-public spaces that split the difference between downtown and the mall, where nature can play a stronger role with opportunities for spontaneity. Men (and couples) feel more comfortable in these experientially rich places.
2. They’re multi-generational
There’s a lot of talk about millennials at today’s retail conferences. Obviously, they are an important group, but let’s not forget about the baby boomers and Generation Z. The ability to appeal across three generations is a measure of the success of the place. That’s absolutely key.
How do we achieve this? We need to think about places that appeal to everyone. At one end of the spectrum are grandparents who love watching and participating in activities with younger people. At the other, are kids or youth who like targeted activities, physical play or knowledge-based activities that are visually or virtually stimulating. The younger generations tend to want to socialize with those in their age group, while the elders love nothing more than being in a place where the generations criss-cross and they can observe their loved ones. When we see multiple generations satisfied, that’s a clear indicator of an experience that is safe, vital, comfortable, and loved.
3. They’re both accepting and exhilarating
A place that welcomes everyone is poised for success. You don’t need to have a degree in epistemology and you don’t have to be a Green Beret to partake. A place that welcomes anyone regardless of fitness, skills, ability or education will enjoy longer term success.
If you can welcome a wide demographic, provide an experience that is exhilarating and offers that view of the edge or feeling of the expected, then you’re doing something right. The closer you can approach that edge, safely in an inclusive way, the more successful you’ll be.
4. They offer an experiential return on investment
There are two different kinds of experiences out there. There are some experiences where you go 4-5 times, you master that experience you stop going. Take zip lines, laser shows, motion simulators, or history museums, for example.
But there are also experiences with retailers that change with time, they grow with use, they get smarter. In this instance, the more you go, the more fun you experience. You build a skill slowly. I’m thinking of indoor skydiving, racing, skiing, arts/crafts oriented experiences, robotics/tech competitions, cross fit, group fitness clubs, and the like.
These experiences have a rate of return based on your investment. The more you invest, the more fun and joy you get out of them. You don’t outstrip the ability to appreciate the experience, you don’t quickly master it and go on to the next thing. That’s a key factor in the longevity of the experience of the retailer.
5. Cultivation of community.
The degree to which you can see a community forming around a brand or experience is usually a measure of the success of that endeavor. With iFly, our indoor skydiving client, we saw this trend take hold with skydivers and thrill seekers initially, but now we see an expanding community of enthusiasts ranging from kids to grandparents! It’s an expanding and incredibly tight community. We think it’s a real indicator of the success and longevity of the idea.
When we see retail characterized by a strong combination of the five elements above we know we’re seeing much more than a passing fad, something closer to the rich, vital experiences that make for lasting memories.