Treasure hunts and live acts: The new role of products in experience-driven retail.

Thanks to online shopping, people can shop faster and more conveniently than ever before – on the way to work, at home on the sofa, sitting in a café. And the online retailers deliver their products in no time at all to the furthest corners of the earth – sometimes even on the same day. New industry giants have recognized the potential of the Internet. In the USA, Amazon earns 60 cents of every dollar spent online. And granted, the prospect of ordering your evening dinner during your lunch break and having it delivered to your home ‘just in time’ sounds enticing to many people. But for brick-and-mortar retail stores, on the other hand, the alarm bells should be ringing. In order to compete successfully in the current environment, they must exhibit flexibility and the courage to innovate.

The key to this lies in a concept that I can hardly stand to hear about anymore, because it has become such an overused buzzword in our field: the "shopping experience." When it comes to the online ordering process, the shopping experience is easy to describe and is generally limited to visual perception and interaction based on the size of the device used. There are far more diverse possibilities for traditional stores. They can offer "touch-and-feel" impressions in three dimensions, as well as scents, sounds and even tastes. They can target us with a wide array of different sensory impressions that spark our imaginations and bring us joy. For example, a 2018 PwC study showed that a large proportion of young customers are very interested in the brand experience in retail – and would even be prepared to disclose more data about themselves in return. And thus we come full circle: The better the "point of presentation" is structured, designed and managed, the happier the buyer is, the more data can be collected and evaluated, and the better the experience can meet the constantly changing demands of the buyers.


Five aspects characterize the ideal shopping experience

But what does it look like, the ideal "retail experience"? Canadian Doug Stephens, founder of Retail Prophets, has defined five traits that characterize the ideal retail experience. It should be exciting, unique, surprising, highly personalized and repeatable. There are many stimulating concepts that fulfill these criteria and are successful – and often the evolution to personalized, data-supported retail is not as complex as it may seem at first glance. An example of this is an invitation I received a few weeks ago from the furniture store Made.com. The company reached out to people working in nearby offices and invited them to a free yoga workshop in its Hamburg showroom – an offer that all the receptionists contacted were happy to share with their colleagues. For a moment I wondered how furniture and yoga could possibly come together, but it was actually quite logical. The yoga exercises were specially selected for people whose jobs require them to sit at a desk. In other words, a coherent offer with high relevance that attracted new visitors to the store. All they had to do was register on an online guest list – which in turn told Made.com more about them and made it possible for the company to contact them individually later. By using simple but effective methods like this, traditional retailers exploit their biggest advantage over online sellers, namely the personal contact between salesperson and customer. Despite all their efforts, digital assistants still can't provide the human touch.


How a discounter from Japan is breaking all the traditional rules

While Made.com focuses on linking the offline showroom with the online ordering process, an example of maximum shopping excitement in the physical store comes from Japan. Meet the discounter "Don Don Donki", also known as "Don Quixote". Some may find the word "discounter" a bit off-putting – and I have to admit that I, too, didn't expect the discount segment to provide one of the most intense shopping experiences in the entire retail industry. In Germany, we tend to associate discounters with austere, no-frills stores designed to convince customers they are not paying more for a fancy showroom. In short, people go to discounters out of common sense, not because they expect an extraordinary shopping experience.

Don Don Donki has achieved cult status in Japan by taking a fundamentally different route. When he founded his company in Tokyo thirty years ago, the enterprising entrepreneur Takao Yasuda single-mindedly created a place where both young and old like to shop – around the clock, and again and again. In fact, travel websites often encourage tourists to visit one of the company's more than 250 shops in Japan. That bears repeating: Imagine you were planning a trip to hip, modern Berlin, and a travel blog recommended a visit to the nearest KiK as an absolute must, promising an unforgettable travel experience. To German ears, it sounds simply absurd.


Luxury items next to foodstuffs: Discordance makes shopping a daily bargain treasure hunt

Indeed, the Don Don Donki approach is different from what we are accustomed to from local discounters. The shops are stuffed floor-to-ceiling with products, a hodgepodge of backscratchers and exclusive ladies' handbags next to frozen fish, iPhones and Dom Perignon champagne. Hand-painted signs created by specially hired artists call attention to the merchandise in styles that suit the products but by no means conform to corporate design specifications. Polygenic sounds advertise the goods and overlay the company's omnipresent jingle. The result is a jumble of impressions that turns customers into treasure hunters in the product jungle. That makes the stores a popular destination for entertainment-hungry consumers who are looking for a bizarre experience between dinner and a nightclub visit – and sure enough, visitors to the store find what they're looking for. So it almost makes sense that Takao Yasuda wanted to build a roller coaster on top of one of his stores in Tokyo. Unfortunately, the plan failed after the neighbors protested. Instead, he integrated a Ferris wheel into the entrance of his store in Osaka – and it has been one of the city's more popular attractions ever since.

It is interesting to note that the "Don Don Donki" shops enjoy a great deal of autonomy in assembling their range of products. Familiarity with the local situation and the interests of the local population is a decisive factor here. Moreover, the products are always cheaper than those of the competition, including electronics and luxury items – which is hard to believe given the effort involved. Don Don Donki proves that it doesn't matter what kind of shop you run. What's important is that you know your customers, and use that knowledge to your advantage while telling your own individual story. Moreover, the concept is not one that can be explained by shopping habits specific to Japanese consumers. The company has now opened stores in Singapore, Hong Kong and the USA that work just like the Japanese originals and are just as successful from an economic point of view.


The retail trade is becoming a hub of media impressions

I am therefore firmly convinced that the media attention Don Donki has enjoyed gives us a glimpse of the future of brick-and-mortar retail stores. Retail space will evolve into a "point of media" and will no longer be exclusively dedicated to sales. The ability to buy goods online anytime and anywhere has robbed traditional retail locations of their USP as a sales outlet, but retail stores still have the potential to become the strongest media space the advertising world has ever had. Stronger than online, TV or radio, because retail stores are able to offer everything at the same time and appeal to all of their customers' senses in equal measure. They are also the only advertising tool that can include the senses of taste and smell. And the more senses are addressed, the more unforgettable are the memories that arise.

The retail sector will thus follow a trend that the music industry is already pioneering. When it comes to music, product sales have shifted entirely to digital platforms, and musicians today earn their money primarily as live acts. Similarly, retail spaces can also function as a stage. While it's possible to buy the same products online, the "real experience" is only available in a store. Retail must be aware of this development and draw the logical conclusions from it.

At this point, however, there is still much room for improvement. In the study "Trends in Retail 2025", KPMG found that of around 20,000 people surveyed, only 50% were satisfied with the service provided by the sales staff. In essence, the respondents criticize their lack of knowledge of their own product range. What should worry the retail trade is twofold: on the one hand, the fact that these results are not an isolated incident, but that satisfaction has been steadily decreasing from year to year. On the other hand it is also true that knowledge of the product range is a competence that services such as Google Home or Amazon Echo can already provide today – albeit on a data basis and without the emotional factor of person-to-person communication. The same study also documents that 39% of customers are disappointed with the interior design of retail spaces. Hence my conclusion: Many companies are failing to exploit their full potential, because they're operating with the handbrake on. If they find the courage to take the next step – if they transform their stores into well-designed experience locations and train their salespeople to be expert advisors – they will reap economically measurable success for their brand.

 

Written by Steven Cichon, Director Brand Spaces. Find out more about the projects that he and his team realize.

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