Nearly three quarters of consumers rely on physical stores as all or part of their primary shopping method, according to a study from IBM and the National Retail Federation (NRF). But the in-store experience is looking a whole lot different in 2024.
According to 2023 Klarna data, customer preferences for engaging, immersive retail experiences have increased notably. And a Q4 2023 survey found that immersive experiences will be among the top three priority investment areas for brands and companies during 2024.
Experiential retail – a concept that involves creating unique, innovative, and interactive experiences for customers in a physical retail environment – will be a top trend. The goal is to provide shoppers with a memorable experience, not just a transactional exchange.
American Girl, for example, has been a longtime leader in experiential retail, with its stores featuring restaurants, doll hair salons, birthday parties and special events. Mattress retailers are also now capitalizing on the power of the experience by creating vibrant, modern spaces in malls and other locations that allow customers to try out their products.
Casper, for example, started on the internet but now has more than 50 physical stores in North America. Combining the online and offline experience to meet customers where they are is part of a strategy to prove that they are more than just a “bed in a box” company that is good at digital marketing. The company is also growing its wholesale business, and relaunched its entire line of mattresses to hit a variety of new price points.
Here are five ways more companies are embracing experiential retail in 2024:
1. Pop Ups
According to Capital One, pop-up shops generate up to $80 billion in annual revenue, and market value is projected to exceed $95 billion by 2025. Additionally, 80 percent of retailers that have opened a pop-up shop considered it a success.
Even small online businesses can take their experiences in person; 44 percent of pop-up shops cost less than $5,000 to open.
Pop-ups often incorporate technology, interactive displays and creative layouts, attracting customers with gift cards, swag, food and games. One highly anticipated concept is the Malibu Barbie Cafe. These cafes are popping up around the country, beginning in New York and the Mall of America last year and expanding this year to Miami. The cafes are hot pink restaurants that also feature rolling rinks, Barbie merchandise and a life sized box for photo ops.
In December, Pinterest launched its first pop-up store in NYC to feature its predicted trends for 2024. The pop-up lasted five days and featured products tied to 23 trends identified by Pinterest, like jellyfish-inspired home decor, café culture, blue beauty and ‘eclectic grandpa’ fashion inspiration. Pinterest could activate more pop-ups in 2024.
2. Shareable Moments
Retailers are experimenting with creative ways to increase their social media presence by encouraging in-store, user-generated content – from background walls for photos to virtual reality and holographic immersive experiences. According to CBRE, “these ‘instagrammable’ places [must] impress with their originality” – from artificial beaches to giant, cuddly toys for the holidays.
For example, Prada recently opened an instagrammable cafe in Harrods, London, inspired by a 1950s soda shop.
The Social Fitting Room in the Barcelona H&M store incorporates infinity mirrors and color-changing LED lights that can be paired with a song of choice. TikTokers raved about the “fitting room that turns into a disco.”
In the Melissa & Doug store, which opened in October in White Plains, New York, families can experience engaging moments throughout, including a spot where kids can measure how many “scoops of ice cream” tall they are. And in Ferragamo’s new Manhattan store, shoppers are invited into a multisensory booth for an immersive experience to design their own NFT token.
3. Building Community
Experiential retail also fosters a sense of community among customers by creating spaces where like-minded individuals can gather and connect. Consumers seem hungry for social experiences. Competitive socializing concepts — like Topgolf and Chicken N Pickle (combining pickleball with chicken sandwiches) — increased by 386% between 2021 and 2023, according to a nationwide report by Cushman & Wakefield.
Retailers are following this model in brick-and-mortar stores. Vuori, for instance, holds events like meditations, movement classes and even aura readings. Last year, Rivian unveiled its latest concept, Spaces, in New York’s Meatpacking District. There, shoppers could see Rivian’s electric vehicles set up with outdoor equipment like bike racks and tents. In 2024, Rivian says it plans to hold events like Rivian owners’ clubs and community based-events like pet adoptions.
Another idea, according to Meaghan Brophy at Fit Small Business, is to partner with local artisans or businesses to create products exclusive to a specific community. Customers appreciate brands that value their community; it makes retailers come across as more authentic and increases brand loyalty. Mango, for example, created a collection of NFT artworks for Spanish artists Miró, Tàpies and Barceló, which they highlighted in their New York City flagship store.
4. Learning and Discovery
Retailers are using experiential retail concepts to encourage customers to explore and learn about products in a fun and engaging way.
In 2023, Aldo took over New York’s Astor Place with a giant, squishy structure to celebrate its shoes’ new Pillow Walk technology, which uses a dual-density foam to absorb impact. Visitors could walk through the structure on a pillow-like surface and eat Aldo-branded cotton candy. Aldo says it is looking to build on this success in 2024 with experiential activations at malls and local events like sports games.
Wilson Sporting Goods’ New York City store allows shoppers to rent and try out equipment in the store. It features concepts like a golf simulator and customized gloves. Nike’s House of Innovation has similar experiences.
Many running shoe retailers, like Potomac River Running in Virginia, offer personalized fittings for customers and work with them to find the best shoes for their individual feet by analyzing how they run on a treadmill. Some even incorporate policies that allow customers to try out their shoes, and if they don’t like them after a run, exchange them for another pair.
5. Ease of Experience
While part of enhancing the customer experience is creating fun moments, another part is ensuring a seamless shopping experience. Retailers are using technology to reduce the friction of transactions.
For example, retailers are digitizing labels and tags using RFID chips. In all of Uniqlo’s North American stores, the checkouts recognize the tags in the clothes and can check out customers without manually scanning items. Zara is rolling out a similar checkout experience and aims to remove all plastic security tags by 2025.
Consumers can expect to see more experiential retail in 2024 as retailers envision new ways to create memorable times for them. These experiences are redefining brick-and-mortar, ensuring physical spaces’ continued relevance and success for the needs of today’s shoppers.
Image created using ChatGPT’s DALL-E.