Data Collection Is the Killer App of Experiential Retail

By: Emily Gorka

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What can’t be had at the touch of a button today? Need a ride? Request an Uber. Hungry? Fire up the Grubhub app. You need look no further for evidence of our digitally connected age than the cardboard boxes emblazoned with the Amazon smile piling up on front stoops everywhere.

We were just getting used to the idea of the internet instantly serving up all the world’s media, but now even physical goods and services can be painlessly summoned right from our smartphones. Brick and mortar retailers are no longer just competing with their rivals across town, they now have to contend with the increasingly sophisticated world of ecommerce.

To do that, they’ll have to adapt some of online shopping’s advantages to their own model. First and foremost, physical retailers are moving away from a merely transactional relationship to something more akin to forming a community with their customers.

Luring Shoppers Back With Experiences They Can’t Get Online

Brick and mortar locations no longer want shoppers to just come, buy, and leave, they want them to stay, socialize, and feel at home. Experiential retailers are turning their showrooms into hangouts and their stores into “town squares,” places to eat, drink, take a class, have a spa treatment, or simply connect with others face to face instead of just on FaceTime.

When Urban Outfitters announced it was purchasing Pizzeria Vetri in 2015, many wondered if there was a genuine synergy opportunity between a clothing store and a restaurant. But, as Marc Vetri, founder of the pizza chain, told Bloomberg:

“Now you can order a sofa on the internet, if you want to eat at the hot new restaurant, you have to leave your living room and you have to venture out. The newest styles are available 24/7 on Urban’s website, but if you want a trendy dining experience to go with those new kicks, only the real world will do.”

Other stores are also investing in new incentives to make the trek to physical outlets. Luxury brand Coach undoubtedly upset some of its retail partners when it pulled its handbags and accessories out of a quarter of American department stores.

But, that move is drawing more attention to its own stores where visitors have access to exclusive features like monogramming stations and its Made to Order Rogue line of customizable handbags.

Physical Retail Gets Wise to the Power of Data

Enhancing the customer experience is just the beginning, though. Creating spaces that entice people to leave their connected homes will help physical retail weather the current transition in consumer behavior. But, if they want to not just survive, but truly compete with online services, brick and mortar stores will need the same analytics-hungry mindset that drives ecommerce.

Technologies like bluetooth beacons and wifi geofencing are physically tracking visitors in the same way an online shopper is traced from landing page to shopping cart. They answer questions like how many people are coming through the doors, how long are they staying, and where do they congregate?

Constant access to analytics was built into ecommerce from the start. Physical retail is now figuring out it needs that edge as well:

“Having that data and understanding how consumers are interacting with that store versus the internet, for that particular brand, that allows the retailers to change the shape of the store and invest in the store to cater to what that customer wants,” said Melina Cordero, CBRE Head of Retail Research in the Americas.

In addition to passive tracking systems, physical stores are taking advantage of the deeper and more reciprocal relationship they are forging with their customers to directly ask them for more qualitative information. Knowing how many people come through your doors is good, but knowing why is even better. They are interacting with customers during promos and events, sign ups for free services like Wifi and apps, and across social media channels. At every touchpoint, they are collecting user information and asking for feedback and suggestions. Each interaction is an opportunity to glean precious insights about their customers’ motivations.

Final Word

In the experiential retail era, stores aren’t just where we spend our money, they’re where we spend our time. Smart brands are giving shoppers compelling reasons to leave the safe and convenient confines of their homes and smartphones. The smartest of all are using this new space as a vehicle for collection of the analytics that will help them continually improve the experience.

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