Today, the UK retail market is in a state of flux; some of Britain’s most established retailers have closed stores or shut down operations entirely, whilst numerous online retailers continue to perform well as consumer confidence and demand grows for internet-enabled purchases, says Stuart Tickle, MD of AWE Europe…
However, spending on concerts, movies, restaurants and bars is booming. Why? Because consumers today are spending more money on experiences.
The trend for experiential retail is the practice of creating an immersive retail environment where customers can more effectively ‘try before they buy’ rather than just go through a simple purchase transaction. It’s a way to revolutionise how people shop for, learn about, interact with, and ultimately, purchase products.
Creating an experience
Experiential retail spaces offer a massive opportunity for independent retailers to differentiate themselves from other mass market and online-only businesses by adding value. It allows the retailer to expand their business whilst building upon everything they already have in place, bringing in more customers and distinguishing themselves from the internet and other competitors.
Forward-thinking retailers are rarely ones that sell products at the cheapest price, but are the ones that add real value and charge appropriately for it. If a customer is purely buying on price, then you need to be cheap – some people will always shop around for the lowest possible price. However, many will take a more balanced approach if given a compelling reason to do so.
So, retailers must differentiate themselves from the price-oriented competition by offering a desirable solution and experience that consumers can’t get elsewhere. By creating an experience, more customers can be diverted from a price on an individual box, and retailers can up-sell to a fully installed solution, or at least a wider basket of products.
To give you an example; if you enter a car showroom – you get to see and sit in a variety of different cars for yourself. You can see the difference in price and experience what you’re really getting for your money, imagine the car as your own, and often we find ourselves opting for something better than we originally had in mind.
It’s the same with technology for the home. If a customer is looking for a decent new TV and sound system, they might look at individual products – a TV, some speakers, amplifiers, etc – without thinking of the room as a complete space, and how everything will work together.
By providing a demonstration space, like the dedicated spaces we have at the AWE HQ in Epsom (pictured), customers can see and experience the technology for themselves, how it all works together, and discover what is possible for given budgets. Their retail journey becomes more than just purchasing individual products, but an investment in an experience – customers will want to take that feeling away with them.
The fact of the matter is, people are still spending money, but it’s what they’re spending it on and where that is the difference. Why go to a restaurant when you can buy the same ingredients in a supermarket for less? The key is the experience.
Take the lead
So, if customers will pay more for a better experience, then invest in experiences for your customers that give you the opportunity to sell and install a complete solution, rather than just competing on price.
For retailers that have the space, a full demo facility, similar to the AWE Show Apartment, which retailers and their customers can book to visit, will provide the perfect real-life set up for customers to fully understand how these systems can work in their home. For those with less space, simply enhance an existing space you have in store.