Retailers attract shoppers with in-store experiences
Premium- Customers are looking for immersive experiences that give them a reason to visit stores
NEW DELHI : In-store experience is becoming critical to growth, considering its ability to not only boost sales, but to also increase customer engagement, according to the findings of a report by realty consultancy CBRE released on Monday.
Customers are looking for engaging, immersive and convenient experiences that give them a reason to visit stores instead of making online purchases. As a result, experiential retail is counterbalancing the growing popularity of e-commerce, and ensuring profitability by increasing the brand’s physical presence, the report added.
Though covid-19 changed shopping behaviour, pushing consumers to buy more goods online, with the resumption of out-of-home activity and shoppers returning to physical stores, organised retailers are picking up on expansion plans that were stalled during the pandemic. According to the report, experience was a critical factor driving the designs of retail spaces even in pre-covid times. “However, following the pandemic, the productivity of retail spaces came into sharp focus, with ‘experience’ becoming more crucial because of its ability to increase customer engagement and not just sales," CBRE added.
Transaction activity in the retail sector grew over 100% on a sequential basis in the June quarter. In the first half of 2022, it reported massive growth of over 160% year-on-year, albeit on a low base, it said.
Growth was driven by pent-up demand, which resulted in a renewal in physical visits to stores even as online shopping continued to perform well.
However, CBRE said ‘experience’ is fast becoming an important frontier to draw consumers. “Across cities, we are witnessing brands resizing and recalibrating their physical store strategies to diversify their portfolio and expand their footprint, with ‘experience’ fast becoming an important frontier to bridge the retailer-consumer gap," said Anshuman Magazine, chairman and chief executive, India, South-East Asia, Middle East, and Africa, CBRE.
“While we have reason to believe that retail business activity has already moved towards pre-pandemic levels, covid-19 has modified consumer priorities. It is, therefore, imperative to deliberate on how real estate stakeholders can improve their spaces to enhance the experience quotient and subsequently value," he added.
Retailers are also favouring dynamic and flexible leas contracts as they meet rapidly changing consumer expectations. This is driven by the demand for plug-and-play outlets, particularly for small, independent firms. Showrooms with personalized designs are becoming more popular. Citing examples of what brands are doing and can do, CBRE said retailers could do well by infusing more technology in stores.
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Apparel retailers are using technology like virtual trial rooms and smart mirrors to for customers to ‘experience’ the outfit or accessory instead of actually putting them on. Given the popularity of athleisure clothing, retailers are also collaborating with brands to include these categories in their offerings. CBRE cited the example of perfume brand Jo Malone’s store in Mumbai, which is offering services such as perfume mixology.
For retailers of electronics goods and appliances, technology such as augmented reality to offer a simulated experience of the gadgets are becoming common. They are also focussing on better after-sales support, same-day delivery and human touch, if the customers face problems.
In the food and beverages industry, which was severely hit during covid, brands have diversified offerings and tied up with food aggregators to ensure online delivery.
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