The survival of retail bricks & mortar - cross-experience collaborations
The evolving consumer demand for unique, branded experiences and convenience of online shopping is putting pressure on traditional retailers to venture into the realm of "experiential retailing".
02 Jul 2020
The evolving consumer demand for unique, branded experiences and convenience of online shopping is putting pressure on traditional retailers to venture into the realm of "experiential retailing". Retailers are well-versed in "retailing" business activities, however, justifiably, lack expertise in the "experiential" element of this hybrid concept.
Flexible leases give traditional retailers the opportunity to offer their customers a multifaceted experience when entering stores. Some retailers create an experience as an extension of their brand. For example, Ralph Lauren built a library and coffee shop in its New York flagship store, creating a setting that complements its clothing and branding.
One way in which retailers are adapting to this is through forming collaborations with brands with complementary offerings in other industries (such as food & beverage, beauty, consumer apps etc.) to create branding synergies for both parties, increasing their exposure and potentially increasing traffic and consequently sales. For example, Tiffany has created a chain of restaurants across the world, ''Tiffany's Blue Box Cafe," which reflects the same modern, luxury experience received in stores.
Alternatively, some retailers are transforming their store layouts as well as their overall setting, to blur the lines between a sensory experience and one that is transactional. CBRE’s Trends in GCC Retail Market Report, notes that artwork is being introduced into retail concepts and stores, which elevates the brand and reflects their ideologies. This transforms the areas into culturally enriching and immersive experiences. One such example is the Dolce & Gabbana store in Miami, Florida which pays homage to the "La Scala" theatre in Milan, with marble statues placed comfortably around the shop. An example closer to home is "Saadiyat Grove" in Abu Dhabi. Strategically located in the middle of three iconic museums, rotational art installations will be set throughout the mixed-use development, drawing inspiration from its museum neighbors. Saadiyat Grove will also offer exclusive curated retail space, featuring stores and retailers with unique interiors (e.g. with showcase of brand heritage, art installations, in-store exhibitions, vintage products, etc.).
Increasingly, we are seeing luxury retailers mimic the aesthetic concepts of art galleries and museums alike, applying the "White Cube Concepf11 to bring focus to the items themselves and minimize distraction. For example, Yves Saint Laurent maintains a sleek, minimalistic look for its stores worldwide, with few clothing items on display, all within a monochrome marble setting, creating a highly elevated space and an experience which transcends the commercial.
Additionally, it continues to push retailers to create a unique experience for their consumers. CBRE predicts that the space requirements and store layouts needed for these experiences will trigger a shift from smaller retail spaces dedicated to a single purpose (shopping) to larger ones providing customers with multiple experiences and ultimately moving from a store to a destination.
For instance, coffee enthusiasts are currently demanding a quality and craft-oriented experience they cannot recreate at home. Starbucks Reserve Roastery in Shanghai extends over 2,800 sqm - the size of a cinema - to offer three coffee bars, in-house roasting, a tea bar and augmented reality elements designed by Alibaba. Figure 6 showcases typical size requirement for retail and entertainment-based retail concepts.
Flexible leases give traditional retailers the opportunity to offer their customers a multifaceted experience when entering stores. Some retailers create an experience as an extension of their brand. For example, Ralph Lauren built a library and coffee shop in its New York flagship store, creating a setting that complements its clothing and branding.
One way in which retailers are adapting to this is through forming collaborations with brands with complementary offerings in other industries (such as food & beverage, beauty, consumer apps etc.) to create branding synergies for both parties, increasing their exposure and potentially increasing traffic and consequently sales. For example, Tiffany has created a chain of restaurants across the world, ''Tiffany's Blue Box Cafe," which reflects the same modern, luxury experience received in stores.
Alternatively, some retailers are transforming their store layouts as well as their overall setting, to blur the lines between a sensory experience and one that is transactional. CBRE’s Trends in GCC Retail Market Report, notes that artwork is being introduced into retail concepts and stores, which elevates the brand and reflects their ideologies. This transforms the areas into culturally enriching and immersive experiences. One such example is the Dolce & Gabbana store in Miami, Florida which pays homage to the "La Scala" theatre in Milan, with marble statues placed comfortably around the shop. An example closer to home is "Saadiyat Grove" in Abu Dhabi. Strategically located in the middle of three iconic museums, rotational art installations will be set throughout the mixed-use development, drawing inspiration from its museum neighbors. Saadiyat Grove will also offer exclusive curated retail space, featuring stores and retailers with unique interiors (e.g. with showcase of brand heritage, art installations, in-store exhibitions, vintage products, etc.).
Increasingly, we are seeing luxury retailers mimic the aesthetic concepts of art galleries and museums alike, applying the "White Cube Concepf11 to bring focus to the items themselves and minimize distraction. For example, Yves Saint Laurent maintains a sleek, minimalistic look for its stores worldwide, with few clothing items on display, all within a monochrome marble setting, creating a highly elevated space and an experience which transcends the commercial.
In the Middle East experiential retailing is opening the door to new types of partnerships across industries
Additionally, it continues to push retailers to create a unique experience for their consumers. CBRE predicts that the space requirements and store layouts needed for these experiences will trigger a shift from smaller retail spaces dedicated to a single purpose (shopping) to larger ones providing customers with multiple experiences and ultimately moving from a store to a destination.For instance, coffee enthusiasts are currently demanding a quality and craft-oriented experience they cannot recreate at home. Starbucks Reserve Roastery in Shanghai extends over 2,800 sqm - the size of a cinema - to offer three coffee bars, in-house roasting, a tea bar and augmented reality elements designed by Alibaba. Figure 6 showcases typical size requirement for retail and entertainment-based retail concepts.