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The Retail Experience Economy and Store Environments

Full report: The Retail Experience Economy: The Behavioural Revolution

The Retail Experience Economy and Store Environments

The importance of the physical store environment on creating memorable experiences

UK retail is currently experiencing significant structural change. Evolutionary processes have guided economic value from commodities to goods, services and now, experiences. We know that consumer empowerment via technology has upset the traditional power differential between the retailer and consumer, with customers now expecting more, but how does the role of environment impact the experience economy?

The Retail Experience Economy Model identifies four key factors in determining a customer’s shopping experience: (1) Environment, (2) Escapism, (3) Entertainment, and (4) Education. With 39% of respondents in a consumer survey identifying Environment as the most important aspect of a meaningful shopping experience, what exactly does this mean?

 

Retail Experience Economy Model

 

The evolving role of the physical store

Stores offer an experience that cannot be replicated online, but the store environment can also cultivate direct and meaningful relationships with consumers. Furthermore, while online retailing plays an increasingly important role in the customer journey, the Office for National Statistics states that store-based retail still accounts for over 85% of total retail spending. It’s no longer about retailers meeting customer needs through product pricing. The most successful stores create a completely unique and unforgettable brand experience that routinely imprints itself on the customer’s memory. These stores engineer environments where customers feel relaxed, comfortable and are encouraged to spend time browsing and discovering new products that are showcased in aspirational settings. Our research shows that 43% of shoppers are more likely to spend money with a retailer who offers a meaningful in-store experience.

“43% of shoppers are more likely to spend money with a retailer who offers a meaningful in-store experience”

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This is not to imply that online and offline are mutually exclusive channels. In fact, successful retailers provide an omnichannel experience that combines stores, online and mobile seamlessly. Research from Deloitte found that 28% of in-store sales were influenced in some way by a digital experience, while our research showed that 29% of consumers said they would visit a store to experience the brand to generate ideas for online purchases.

“29% of consumers said they would visit a store to experience the brand to generate ideas for online purchases

The evolving role of the physical store

Stores offer an experience that cannot be replicated online, but the store environment can also cultivate direct and meaningful relationships with consumers. Furthermore, while online retailing plays an increasingly important role in the customer journey, the Office for National Statistics states that store-based retail still accounts for over 85% of total retail spending. It’s no longer about retailers meeting customer needs through product pricing. The most successful stores create a completely unique and unforgettable brand experience that routinely imprints itself on the customer’s memory. These stores engineer environments where customers feel relaxed, comfortable and are encouraged to spend time browsing and discovering new products that are showcased in aspirational settings. Our research shows that 43% of shoppers are more likely to spend money with a retailer who offers a meaningful in-store experience.

 

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Found this short article interesting?

This insight article forms part of a thought leadership report entitled “The Retail Experience Economy: The Behavioural Revolution”. It was produced by Retail Economics in partnership with Squire Patton Boggs and looks at a comprehensive range of factors that impact consumer behaviour across four key realms of experience.

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