Be Wary of Experiential Retail

by January 15, 2021
Photo via Pexels.

The e-commerce website for New England furniture store chain Jordan’s Furniture looks like any other, with attractive, if staid, photographs of red leather couches and delicately arranged mahogany chairs. 

But navigate to a subpage entitled “Jordan’s Experience,” and discover a field of purple hyperlinks advertising an entirely different vibe at Jordan’s brick-and-mortar stores, which feature IMAX theaters, ropes courses, burger joints, and “North America’s largest LED ceiling.” At Jordan’s, customers may enter looking for a new ottoman and exit with a deep-fried doughnut and some rope burns to accompany the living-room piece of their dreams.

Jordan’s, though a century-old chain, is at the forefront of a wide-ranging movement known as “shoppertainment,” or more appealingly “experiential retail.” Experiential retail is an extremely vague term that runs the gamut from exercise classes at Lululemon to sleepovers at IKEA to Jordan’s to a Nickelodeon amusement park at the Mall of America

Business journalists should see past the glitz and glamor and realize that these diverse features share a common goal, one that is more elusive than ever during the COVID-19 pandemic: bringing customers into brick-and-mortar stores, which are threatened by e-commerce. 

Approaches to experiential retail vary based on companies’ funding (Jordan’s is owned by Berkshire Hathaway) and the sorts of customer communities they strive to create. They all, however, result in customers getting off their couches — couches at home, that is — and spending greater amounts of time in stores, plus increased publicity. 

Now, experiential retail is largely on hold due to the pandemic. In the long term, though, its flashiness should allow it to stick around for as long as physical stores do.

Observers should expect experiential retail to expand to diverse regions of the country. Triple Five Group, developer of the Mall of America and its Canadian equivalent the West Edmonton Mall, has already planted its flag in New Jersey with mega-mall American Dream, where entertainment options like a DreamWorks water park dramatically outnumber actual retail shops. Triple Five plans a similar development in Miami.

American Dream opened at the Meadowlands at the start of October despite losing some of its retail tenants over the course of the pandemic. This situation, and Triple Five’s work in general, calls into question the purpose of experiential retail. Particularly during a pandemic, how much will a candy store like IT’SUGAR, one of the few retailers at American Dream to be open since 2019, actually stand to benefit from the Kung Fu Panda Temple of Awesomeness? Especially in comparison to an equivalent investment in, say, neighboring restaurants that might drive customers to a candy store? (Granted, American Dream will eventually have hundreds of dining establishments. They’re just somehow still not even close to the principal focus of the development.)

Writing for RetailWire, Doug Garnett, president of marketing firm Protonik, stated that while “turning stores into bad amusement parks” might be “showered with adulation,” retail at its heart is about linking customers with products. Garnett points out that a good retail store should already be set up in a way that evokes customers’ emotions — he cites REI’s rock wall as an example — without relying on gimmicks.

Journalists covering the operations of eccentric new retail outlets should keep Garnett’s words in mind. Products should be the focus; a store simply being off the wall does not justify a glowing review.

For Vans, off the wall is ideal. A “House of Vans” indoor skatepark makes perfect sense for a company that sells skate shoes — even if they aren’t sold at that venue specifically — by demonstrating the ideal application of the product. IKEA’s aforementioned sleepover contest is also eminently sensible, as it allows customers to try out products like never before, and also bolsters the image of an IKEA store as a homey place to spend time with family.

With retail losing ground to e-commerce — a transition undoubtedly accelerated by the COVID-19 pandemic — stores and malls may choose to get increasingly extravagant to fight the attrition. It’s the responsibility of journalists to cover these developments with an eye toward their business sense, rather than getting distracted by shiny objects.