Daredevil Retail: How DSW, Nordstrom And Office Depot Are Experimenting With Experience
Shoe shopping, the pinnacle of retail therapy, is trading in some of its sling-backs and Mary Janes for video tunnels and “shoevators.” This may be when we learn if experiential retail is jumping the shark.
Experiential retail, which of late has meant experimental retail, has carried the industry into the realm of merchandise-free (or merchandise-light) shops. More major brands, including Nordstrom, Office Depot and DSW, are replacing what would be selling space with activities and services, from clothing alterations to tech support to a vending machine-like shoe retriever.
They have to. With nearly 4,000 stores projected to close in 2018, in addition to a record-breaking 8,000 closures in 2017, retailers must change how they operate at a fundamental level — or risk more operational losses.
But are wow-factor attractions enough to keep shoppers returning? In the increasingly stunt-performance arena of retail, are shoevators and nap nooks mesmerizing enough to generate loyalty, like Evel Knievel did, or are they simply one-act bearded ladies?
The answer resides in how long the experience lives with the customer. A cacophony of experiential retail stimuli could cause shoppers to shut down, much as the overwhelming volume of advertising does. What remains with the consumer are those activities that repeatedly offer value. Case in point: 22% of shoppers are more likely to be loyal to a brand that offers related amenities like personal stylists or a makeover, according to a study by YouGov and Fresh Relevance, cited in Forbes.
From Shoevators to Naptime
But if every retailer offers a makeover, then makeovers are no longer special. So many merchants are testing their creative nerves with more awe-inspiring exploits.
DSW: The deep-discount shoe retailer is testing small-format stores that offer experiences ranging from the practical to the indulgent. At its innovation lab store in Columbus, Ohio, shoppers can access nail bars, repair services and customized shoe insoles. At its store in Las Vegas, it doles out full experiential immersion: Its escalator doubles as a video tunnel, where shoppers can virtually swim underwater, hike the desert or fly over a city. And there’s the shoe-delivery system called the shoevator, through which shoes ordered via in-store kiosk or by app are delivered from storage in an elevator-like lift.
Office Depot: The office supply chain is increasingly catering to the services of its business clients rather than selling ink, pens and other office products, which these clients are buying less. Through its “Workonomy” business platform, it’s providing small and medium businesses technical support, personal advisors and similar services in various forms. Its Workonomy Tech Services kiosks give on-demand access to the company’s installation and consultation support, while its Workonomy Hub is an integrated co-working space. In addition, it offers Workonomy Self-Service Print and Copy kiosks and Workonomy Pack and Ship services.
Nordstrom: The Seattle-based department store chain, known for white-glove service, is among the first merchants to take a gamble on replacing inventory with activity. Its Nordstrom Local concept in Los Angeles invites customers to gather and socialize over glasses of wine or beer, get a manicure and meet with personal stylists. There are also luxurious dressing rooms shoppers can use to try on outfits they ordered online — the shop also serves as an order pickup location. If the clothing doesn’t fit, a tailor is on hand to make the alterations on site.
Joann: The sewing and fabric chain in early summer opened a concept store that’s lined up a bunch of features: a creators’ studio for classes and social events; touchscreen kiosks showing Pinterest craft projects, with instructions, that can be personalized by user; and a service called Sew & Go, through which customers can hand off their projects to seamstresses. Joann also offers professional crafters the chance to share experiences with shoppers by live-streaming in-store classes online.
Casper Mattresses: The pop-out-of-a-box mattress seller, which is largely online but also sells through Target, is going for king-sized experiences through its Manhattan sleep center, called the Dreamery. Here, for $25, sleepy consumers and commuters nap on its products in one of nine Casper Nooks, and awaken to fresh skin-care samples and coffee (pajamas also are offered for the nap). The mattresses are not for sale, but a showroom is right next door.
What Flies, and What May Flop
Some of these ideas will clear relevance hurdles with ease; others, like a bearded lady, might only attract oglers. A combination of both may work best, though the investment would have to prove itself. Generally speaking, here’s what history has taught us will and won’t work in experiential retail.
Give these an applause: The experiential attractions most likely to resonate are those that respond to a growing need that is becoming commonplace in today’s blended online-offline shopping pastime. Office Depot and Nordstrom have simply recalibrated to meet how their shoppers’ needs have changed based on external factors. In Office Depot’s case, reliance on computers and therefore digital records has diminished the need for paper, staples and the like. Nordstrom, recognizing that online sales represent a growing percentage of total revenue (29% in the first quarter of 2018), is likely betting that its shop-free spots, where orders can be picked up and altered, will stimulate more online purchases.
Give these the hook: Experiential investments that diminish in excitement after the first encounter may pay off in high-volume locations, like Manhattan or Las Vegas, but not elsewhere. For this reason, DSW’s video tunnels and shoevators may work well on the bustling Vegas Strip, where sensory overload is a way of life. The merchant is smart to put its more sensible shoe repair and insole services in Ohio. But does location alone ensure that Casper’s Dreamery will thrive in busy Manhattan? We’ll have to sleep on that one.
Somewhere between applause and the hook is Joann, offering expressly the kinds of attractions its customers enjoy. Its success depends on whether its shoppers will repeatedly get in their cars so they can partake in crafts in its social settings at the store. With several of its experiential features online, one might just choose to livestream classes or post their crafts on Pinterest from home.
Common among all of these merchants is that their efforts rely on the buildup of community — a crowd. Isn’t that what every daredevil attracts?