Is Experiential Marketing the Way Out for the Retail Sector?
The graphic below shows the share of e-commerce within shopping as a whole starting from the year 2015. Internet shopping increased its share in total shopping from 7.4% in 2015 to almost 12% at the present. This figure is expected to become 17.5% by 2021.
This is an incredible transformation. Consumer habits are changing faster than ever. Many global retailer chains are either in trouble or have already declared bankrupt. On the other hand, giant e-commerce companies such as Amazon and Alibaba are constantly breaking new records. One of the concepts most emphasised by retailer circles in discussing how to keep pace with this transformation is: experiential marketing.
Experiential marketing can broadly be defined as the strategies developed and the activities performed by a brand in order to produce experience that appeals to all senses of the customers and to get bonded to them by way of these experiences. Although this concept is already known to us with names such as event marketing, engagement marketing, it has recently become more popular than it was in the past. This is mainly the result of the purchasing preferences of the new generation.
According to research by Harris Poll in 2014 for Eventbrite 78% of the Y generation is more prone to pay money to an expected event rather than a desired object. In contrary to the past generations, the Y generation appreciates having experiences and sharing them with their friends more than gaining material wealth. Social media has an undeniable share in this approach, however economical processes also play a large part in this course of events. As saving money and making investment becomes harder, the youth find it more and more rational to enjoy the life with what they already have. But the reverse is also true… As the culture of experience develops it becomes harder to save and to invest. In short, this is a two-way mechanism, which is why it is so easy to understand the Y generation.
Another reason why the benefit-oriented sellers of the past now focus on experience is that, besides the products and services, the experiences they provide are able to create value themselves. This is best exemplified by the new pop-up store opened in Manhattan by Samsung, the giant electronic company.
“I do not ask you to purchase something from here.” - Michael Koch
These words by Michael Koch, the Sr. Stores Development Director at Samsung, give important clues about the new course of the retail sector. The pop-up store opened in 2016 covers an area of 5200 squaremeters where interactive works of art, a music recording studio, VR and walls and walls of giant screens are displayed. But the only thing you can purchase in the store is coffee. Koch emphasises the importance of experience as follows “Here we planned to offer everyone a new experience. Such an experience that they can relate to it, feel interested and get involved in it.”
This does look like an extreme example, but surely reflects the spirit of the time.
Not only Samsung but many brands make use of pop-up stores as an extension of experiential marketing approach to draw customers' attention particularly in the eve of holidays, festivals or special days . Pop-up stores have the following benefits:
Arouses curiosity: These stores are generally set up in special periods or with certain concepts. For example, H&M launched the ERDEMxH&M collection, the fruit of its cooperation with the fashion designer Erdem Moralıoğlu, in the pop-up stores set up in many different cities from Los Angeles to İstanbul. The collection was kept secret for a long time and launched in the big parties organized especially for these pop-up stores.
Has PR value: In connection with the above item, these stores give brands the chance of larger press coverage, thanks to the hype they arouse.
More work in less time: One of the best things about opening a limited pop-up store is that customers are more open to discovery, knowing that the store will not be there for long. They will enter the store with no hesitation to see what is going on inside and even feel free to do some shopping.
Chance to cut down of expenses: This is surely directly related to what you actually do in the store. But thinking of the annual rent you have to pay for an average shop on a classy street, it is easy to see the savings you can do by setting up a pop-up store for a couple of months.
Freedom for trial and error: Would you like to take some risk? Make up a concept, share it in your pop-up store and collect feedback from your customers. The results will show you whether it was worth the risk or not.
What's more, you do not have to be a retailer to open a pop-up store or get engaged in experiential marketing activities . For example, even the famous actress Sarah Jessica Parker can transform her passion for shoes into a pop-up store in New York . But this is not the only example… Although experiential marketing is perceived as a way out for the retailers, digital brands may as well try to reach their customers by way of experiential marketing at times. Google is among the brands that want to reach beyond the screen and touch its customers in stores.
It will be no overstatement to call Google's pop-up store opened last year in Manhattan the love child of technology and fun. It is possible to feel like in a playground with all those giant balloons, interactive walls and the colourful setting.
Source: Scales & Models
Are the pop-up stores all about experiential marketing? Of course not. Any moment you are face-to-face with a customer may be an opportunity for experiential marketing.
In the past years when IKEA hosted its customers in England as overnight guests for a single night, the participants both experienced a huge pajama party and had the opportunity to test the IKEA beds. Or a museum… for years, Heineken Experience has been offering the visitors of Amsterdam a Heineken experience from production to tasting. If only the queue at the door was not part of the experience :)
Be creative, find pleasing ideas and surprise people in physical settings. Technology may be one way of making people smile and offering them different experiences, but it is not the only one. As the name “Experiential Marketing” suggests, the aim is to make the customers feel different and to burn your brand in their minds by creating unique experiences.
You're not a retailer? Then check out 5 Useful Methods to Gain Potential Customers with B2B Marketing!