Reimagining Retail

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By Matthew Schwartz

Lululemon stores, which sell athletic apparel, host free yoga classes and other fitness and social events on a weekly basis. The Nike store in downtown Manhattan includes the Nike+ Basketball Trial Zone where consumers can shoot hoops and test basketball shoes. Samsung 837, located in New York City’s Meatpacking District, features a “selfie booth,” a Virtual Reality Tunnel, and a full kitchen display complete with digitally enabled appliances.

These are just a few examples of how brick-and-mortar stores are evolving the customer experience in a digital age. When physical locations are part of the greater retail ecosystem, they provide brands with the opportunity to connect with their audiences long after a purchase is made, says Donny Makower, president of RED Interactive Agency, whose clients include AB InBev, Hasbro, and Under Armour.

“When you offer meaningful experiences to consumers, you develop an actual relationship with them,” Makower says. “And that’s where brands get significant long-term value.”

The shift to online shopping is causing major contractions among traditional retailers and boutique outlets alike. Brokerage firm Credit Suisse reports that more than 8,640 brick-and-mortar stores may shutter in 2017.

“You have to make sure the in-store experience is ‘un-Amazonable.'”
— Karuna Rawal, president of Arc U.S.

In response, brands are experimenting with new in-store marketing models and reconfiguring how they present their content in a physical environment. Indeed, 44 percent of retail executives in the U.S., Germany, Japan, and the U.K. said improving in-store experiences was a strategic priority for the next year, according to a December 2016 study by Digimarc and Planet Retail.

“You have to make sure the in-store experience is ‘un-Amazonable,'” says Karuna Rawal, president of Arc U.S. and global chief strategy officer at Arc Worldwide, whose clients include Coca-Cola, MillerCoors, and Procter & Gamble. “What’s really becoming differentiating for retailers is to have customer service experts who can provide advice to consumers without pushing a particular product. That’s going to get someone to go the store. Or, it might be building a sense of community with like-minded people. Every brand has to figure what that looks like for their own category.

Making Coolers Cool
YETI, which markets coolers and other products to outdoor enthusiasts, opened its flagship store in February to help expand the brand’s appeal. Located in Austin, Texas, the 8,000-square-foot space features a slew of brand-specific visual displays, as well as scent and sound systems, designed to enhance the customer experience. There’s a film viewing area, a performance stage, a bar, and wall screens displaying moving images of YETI brand ambassadors. The store also includes artifacts from outdoor adventures, including a pick-up truck and a fishing skiff.

“We have so many inspiring layers and experiential components to our brand that it seemed natural to open a store, but present it more as an experiential event,” says Tony Kaplan, director of consumer experience at YETI. “We intend to have a regular mix of events, from live music to speakers to film screenings. Through the lens of our ambassadors and steady stream of new, innovative products, we want to give our fans a memorable and shareable experience that will motivate them to come back often.”

YETI’s, in Austin, Texas, includes a wide array of paraphernalia from outdoor adventures.

Brick-and-mortar stores remain vital for consumer product giant Procter & Gamble. In fact, 95 percent of the company’s sales currently derive from physical locations, according to Matt Barresi, brand director of North America selling and marketing operations at P&G.

“We expect [physical stores] to be a significant part of our business for the foreseeable future. At the same time, we’re format agnostic,” Barresi says. “We’re working with our retail partners to grow the mutual business, understand mutual shoppers, and provide better ways to meet their needs, whether in-store or online.”

As more brands look to connect the dots between online and offline channels to enhance in-store marketing, New York City-based News America Marketing is working actively with its CPG clients to develop “media-to-shelf” campaigns, says its EVP and CMO Angelique Krembs. The company’s in-store products include at-shelf messaging, coupon and sample dispensers, cart advertisements, and in-store merchandising services.

“Both print media and social media get consumers to the store with broad messaging that unites everyone, along with some targeted information to activate a response,” Krembs says. “Once you have the consumer in the store, you can use analytics from digital and transaction data to add even more personalization and improve the shopping experience.”

Depending on the relevance of the content that’s being delivered, in-store marketing can drive more value than online marketing, says Matt Egol, co-lead for digital services at PwC’s consumer markets practice. “The physical space is theater, but it takes a longer time to set up the theater and it’s hard to vary things across stores,” he notes. “It’s never going to be the same one-to-one marketing that you can achieve in a purely online experience, but by leveraging mobile you can add some personal touches to the physical experience.”

Egol and other industry observers stress that marketers use their online analytics to inform both the emotional and creative elements of their in-store marketing efforts. “E-commerce provides an opportunity to mine insights for the best content that drives engagement and conversion,” Egol says. “These same words that work, and visual cues, can then be leveraged for more engaging content in-store, at the shelf, and on promotional displays.”

Click and Bricks
Regardless of where consumers are on the purchasing path, marketers need to make the customer experience as “frictionless” as possible. Nearly 80 percent of Americans do at least some shopping on the internet, with 43 percent shopping online “weekly” or “a few times a month,” according to a study by the Pew Research Center. However, 65 percent of online shoppers indicated they generally prefer buying from physical outlets if given the choice.

separate study released earlier this year by ChargeItSpot reported that a majority of U.S. consumers who use in-store pickup for digital purchases also tend to make incremental purchases during their visit. But retailers are failing to take advantage of the connection. An analysis by L2, which examined the types of website features implemented by U.S. retailers, found that less than half (47 percent) of the companies tracked offered an online-to-offline collection option.

“Both retailers and brands must accept that almost all shoppers today are, to varying degrees, omnichannel shoppers,” says Bill Schober, editorial director of the Path to Purchase Institute, which represents a majority of CPG Fortune 500 companies and the retailers that sell their products. “The happy news for in-store marketing is that most shoppers still want to shop for CPG goods in a physical setting. And brands know that while [in-store] shoppers like familiarity, they also like a little ‘retail-tainment’ through special events, as long as they don’t get in their way.”



3 Ways to Enhance In-Store Marketing

As online shopping becomes the norm, retailers must develop new marketing vehicles to get customers into their brick-and-mortar stores. Matt Egol, co-lead for digital services at PwC’s consumer markets practice, recommends a few methods to enhance the in-store experience.

  • Create more community and shared experiences among the brand’s core audiences.
  • Add more exclusivity to the customer experience, such as offering unique products and more personalized services.
  • Blend the in-store experience with online shopping, enhancing convenience for e-commerce orders that can be picked up at the store or for products ordered in the store for home delivery.


Matthew Schwartz
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