What’s in a name?
Turns out, it could be worth a great deal. That’s what retailers and brands are looking to gain by slapping their names onto hotels, sports facilities and live music venues, as well as prominently hosting pop-up shops as part of a broader push toward experiential retail.
Although not a recent trend, the fusion of retail and entertainment has increasingly been taken on in the digital age, with companies investing in experiences instead of just products — and commercial real estate serving as an ideal medium for connecting with established shoppers and attracting new ones.
E-commerce shoe giant Zappos became the latest in a string of companies that has ramped up its focus on experiential retail, entering into a multiyear partnership with Caesars Entertainment to rebrand Las Vegas’ The Axis as the Zappos Theater. Sports venues like Dick’s Sporting Goods Park in Colorado and Target Field in Minnesota, Amazon’s pop-up stores at Whole Foods locations, the Shinola Hotel in Detroit and even Farfetch’s “Store of the Future” in London are also examples of this so-called “retailtainment.”
According to Matt Powell, senior industry advisor for sports at The NPD Group Inc., the move comes at a time when digital disruption has increasingly driven customers online and out of brick-and-mortar.
“Physical stores are starving for traffic,” he told FN. “Malls have seen a steady decline in traffic over the last decade, [and] entertainment may be a way to build traffic back to physical malls.”
It’s no surprise that today’s consumers value experiences and interactive services versus the traditional sale format. From setting up shop at a department store to renaming a stadium, using real estate allows retailers and brands to provide a more compelling customer experience, as it takes advantage of entertainment and technology that’s designed to attract, entangle and even generate incremental sales and margin opportunities (think IoT, mobile points of sale) for retailers, said Michael Diamond, NPD’s director of industry analysis for commercial technology.
“The stakes are much higher for brick-and-mortar retailers — large and small — today, and if you can adjust the purchase decision beyond price to a more positive emotional experience, you have much better odds of attracting people to your shop,” he added. “We continue to see brick-and-mortar retailers borrow ideas from amusement parks, hotels, restaurants and more to amplify the customer experience — and that’s going to continue.”
Why Retailers Are Overhauling their Loyalty Programs for the Digital Age
Why the Chief Experience Officer Is Retail’s New Change Agent