Having survived the greatest pandemic of our lifetime, America’s retail stores and shopping malls have shown their endurance, resilience and continued relevance in our society. Now, they’re undergoing an identity change, turning from places to buy things into places to do things, where customers pay not for products, but gather to enjoy experiences.
This evolution has the potential to solidify shopping malls as the beating heart of American communities for many more years to come.
Shoppers Want Experiences
Over the past few years, so-called “lifestyle centers” have emerged in the place of traditional shopping malls. These mixed-use spaces are more akin to urban promenades, focusing on experiences — e.g., leisure activities, cinemas, arcades, mini golf, even indoor theme parks like the one at New Jersey’s much-feted American Dream mall — as well as shopping.
Retail stores remain an important part of the mall ecosystem, however, they’re starting to take a different form. Replacing the classic browse-and-buy routine, “experiential” stores are increasing in prominence, combining omnichannel technology with on-site attractions, services and events to offer customers a unique experience that brings them back again and again. H&M’s newest Brooklyn location is a prime example of this, providing customers with a curated selection of products, visuals, and exclusive programming based on a rotating theme.
It’s not only mega brands or businesses with extensive brick-and-mortar experience that are getting in on the experiential game, however. Karl’s Bait & Tackle, an online fishing equipment retailer, recently opened its first in-person location with a big emphasis on immersive customer engagement. Visitors to the Fort Worth, TX-based location have the chance to interact with angling baits and lures — described as “little works of art” by Karl’s Director of Retail Experience Teeg Stouffer — as well as access creative educational content that demonstrates different ways in which items can be used out on the water.
Customer Tracking is Crucial
Karl’s 2,500-square-foot Texas store borrows a lot from the brand’s e-commerce roots, punctuating the in-person retail experience with digital components and product path cards that allow customers to shape their own shopping journeys, much like they do online.
This innovative approach seems to be a recipe for success. In its first week of being opened, Karl’s Fort Worth location beat initial sales targets by 200 percent. Part of this triumph can be attributed to the brand’s use of foot traffic monitoring to identify what customers like and what they don’t.
In a conventional, nonexperiential retail setting, certain core metrics are used to track a store’s overall performance: sales per square foot, sales per employee, basket size per transaction, conversion rate, etc. In an experience-focused context, however, when consumers aren’t necessarily buying things, these transactional indicators aren’t all that relevant.
Take the example of SHOWFIELDS, a lifestyle discovery store at the forefront of the experiential shopping evolution. The company offers customers themed curations of mission-driven brands, most of which are new to in-person retail, alongside exclusive exhibitions and events. SHOWFIELDS newest Brooklyn location has garnered headlines for its engaging approach, guiding visitors through a six-room setup, each offering something unique. “The Foyer,” for instance, features an immersive art installation, while “The Courtyard” offers shoppers the chance to get hands-on with dozens of health and wellness brands. Most interesting, perhaps, is the so-called “sensorial room” — a space incorporating light, sound and scent where shoppers can disconnect from the world while experiencing products provided by Lush Cosmetics.
From a brand loyalty perspective, this sort of experience-driven approach is great — but in lieu of sales, experiential retail leaders need a reliable way of tracking customer sentiment. This is where in-store analytics come in.
The Importance of a Tech-Enabled Approach
With a combination of cameras, sensors and intelligent software, experience-focused stores, such as Karl’s and SHOWFIELDS, can gain a deep understanding into what their customers value most. An augmented reality installation that lets shoppers digitally try on clothes may seem like a people-pleaser, for instance, but if foot traffic data suggests customers aren’t flocking to it, a change of location is likely required. By analyzing heat maps that illustrate the way in which visitors flow through the store’s space, a more effective placement shouldn’t be hard to find.
Foot traffic analytics run deeper than just the promotional positioning, however. The operator of an experiential mall’s indoor mini golf course could, for example, utilize camera data to determine how players tackle each hole — then use that information to maximize enjoyment when planning out a redesign.
Customer movement insights are also key for cutting costs and heightening operational efficiencies, ensuring that store leaders know where and when staff are needed most, and letting them role-play the launch of new experiences before committing to a final design.
Seizing the Experiential Opportunity
Change and growth will be a chapter in the life of any long-standing American institution. Shopping malls and brick-and-mortar retail have a once-in-a-lifetime opportunity in the years ahead to emerge on top of changing consumer behavior trends.
For retail leaders willing to lean into the brave new world of experience-driven omnichannel shopping, the opportunities are vast. By being bold, trying new things, and harnessing technology to ensure decisions are grounded in data and lessons are learned along the way, retailers can meet the evolving demands of their customers — and guarantee they keep coming back for more.
Joe Shasteen is global manager, advanced analytics at RetailNext, an in-store analytics platform.
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