Experiential retail: is this system working?

Considering the downfall of several physical stores, many retailers and mall operators have adopted the concept of experiential retail in an attempt to attract customers. There is a shift from selling products to providing an experience that sometimes do not include selling anything.

This new idea allows shoppers to drink wine, talk to a personal shopper, listen to music, meditate in a pod, view products and even try them. All these efforts are costly. Is the concept worth the investment? Data reveals that experiential retailing was a hype for approximately two years. However, the attempts at personalisation, immersion and entertainment have not convinced consumers to purchase more products at retail stores. Up until the final three months of 2018, indoor shopping malls with outlets offering this service did not benefit from more shopper traffic on a year-over-year basis.

Instead, a lot of shops are closing down. According to a real estate analysis, 5,994 stores will stop being operational in 2019. An expert advance that this number will reach 12,000 by the end of the year. In contrast, only 2,641 will be opening. Two of those closing down are ‘Victoria’s Secret’ and ‘Bed, Bath and Beyond’. These two chains were ranked among the top 10 in experiential retailing.

Experiential is not really effective