Retail and hospitality sectors globally are collectively shifting to customer experience-driven models. Who is leading the way? And how are they doing it?
September 11th, 2019
It’s been 20 years since Joseph Pine and James Gilmore floated the idea of experiential retail in their book The Experience Economy and still there’s little agreement on what it actually is. A slippery dip in a swimwear store? Catching your own fish in a restaurant? A café at Tiffany so customers can breakfast there? Boom-tish! “It’s less about a passive desire to buy from a brand that delivers a simple experience than a need to have a proactive relationship with a brand you can engage with collaboratively,” says Chris Sanderson, co-founder of global consumer insights consultancy The Future Laboratory.
The Future Laboratory’s Retail Report 2019 advises that brands and services will increasingly be required to add value to their offer as sustainability, convenience and personal service shape consumers’ desire for more meaningful interactions and initiatives.
Supermarkets that provide in-house nutritional advice, convenience stores that specialise in ethically-sourced produce, retailers which operate as community platforms, transforming private property into public amenity… these are among the trends driving vitality in the retail and hospitality sector.
Technology, Sanderson says, is particularly potent in transforming a retail outlet into an “experience hub” by creating more personalised and customisable services. He points to H&M, which has been trialling mobile services that enable digital point-of-sale material to be aligned to an individual’s personality or past shopping purchases. And to Zara, which is launching an artificial reality (AR) app in 120 outlets that will allow shoppers to view virtual models wearing its clothes around those stores.
The Future Laboratory’s prediction that DTC (direct-to-customer, that is, digital native) brands will begin disrupting the department store experience by popping up within their walls is already playing out at Hudson Yards, the $25 billion private retail development on Manhattan’s west side, in New York. The self-proclaimed ‘triumph of culture, commerce and cuisine’ recently opened a Floor of Discovery that is providing the first brick-and-mortar environment for previously online-only brands like Rhone activewear and men’s underwear label, Mack Weldon.
The Muji there will feature a custom embroidery station; the Snark Park, an exhibition space designed by Snarkitecture, will showcase a rotating schedule of “playful and immersive design environments”, according to Esty Ottensoser, retail specialist of Related, the company which developed the Hudson Yards site. “A spirit of creativity unites the Floor of Discovery, from shopping to dining to Snark Park’s imaginative exhibitions,” he says.
As fast fashion and consumer brands make inroads with technology, brands with an embedded sense of craft and heritage are amping up their DNA. At the new three-storey Alexander McQueen store on Old Bond Street, London, the top floor is a dedicated atelier space in which people can engage with elements of the house’s archive. They can look through historical sourcebooks (McQueen, who died in 2010, owned a spectacular collection of Victorian-era fashion catalogues) and see how some of the new garments – designed by McQueen’s acolyte Sarah Burton – are devised. In a sector renowned for its secrecy and fear of copy, McQueen is showing itself to be fearless, a quality for which the late designer was renowned. The store, designed by Chilean architect Smiljan Radic is radically bizarre in its beauty, very on-brand.
For Mulberry, British interior designer Faye Toogood physically embodied the brand narrative in the new concept stores, thus enabling customers to share in its history. “Mulberry was founded in the Somerset countryside, where their products are still made, and has grown to become a modern brand with a global audience,” says Toogood. “I wanted to reflect Mulberry’s status as a contemporary British heritage brand through an interpretation of the raw power of the British rural and urban landscape.”
By juxtaposing soft materials such as hand-tufted rugs and velvet button-upholstered furniture with the hard edges of glass, ceramic and concrete, Toogood reckons the design pays tribute to rugged highlands, rolling fields, woodlands and concrete tower blocks. “I wanted the stores to feel more like a welcoming home than a retail environment,” she says.
Meanwhile, hospitality, as Sanderson points out, has experience at its very heart. “And it’s increasingly where the 21st-century consumer is investing their discretionary income.” The Burwood Brickwork hospitality and retail hub, due to open 15 kilometres east of Melbourne in December, rings all the right bells of sustainability, community and ethical consumption while waving top-notch experiential creds. Developed by Frasers Property along with Living Building Challenge guidelines, the 2000-square-metre rooftop of the new complex will be the site of an organic farm and eatery conceived and operated by Tully Heard, the team behind acre Eatery in Camperdown and The Greens in North Sydney.
“Our aim with acre Eatery has always been about changing how urban dwellers think about, experience and consume food,” says Luke Heard of studio Tully Heard. The rooftop farm and greenhouse will provide to-table produce for the three establishments operated by acre – a full-service restaurant, a Glasshouse café and an alfresco space. It also has the potential to produce a surplus that can supply the other food and beverage operations, and even offer fresh organic goods to residents of the 700 dwellings attached to the development.
“We definitely want to have a farmer’s market as part of the regular rooftop activities,” says Heard. Other activities will include educational workshops on urban agriculture and sustainability, cooking classes and community gatherings (anyone for rooftop yoga?).
“This will be the most sustainable retail centre ever developed, assuming we can meet the Living Building Challenge,” says Peri Macdonald, executive general manager of Frasers Property Australia. The Challenge, overseen by the International Living Future Institute, is the world’s most rigorous proven performance standard for buildings.
According to Macdonald, it requires at least 100 per cent energy generation from renewable sources, the capacity to capture, treat and re-use all water the building requires, a zero-sum on material waste and complete avoidance of ‘red list’ matter (everything from alkylphenols to volatile organic compounds). The whole 13,000-square-metre hectare development is designed to “push the boundaries of what a retail and entertainment destination can be”, says Macdonald. And that’s something worth experiencing.
This article originally appeared in issue #78 of Indesign magazine – the ‘Customer Experience’ issue.
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