Experiential Retail Stores are the Stores of the Future!

In today’s world, consumers increasingly favour an enhanced and seamless shopping experience that meets their needs and preferences. Moreover, retailers face fierce competition from both large and small e-commerce brands. As a result, many retail businesses have suffered significant setbacks, all because their traditional approach failed to address the pain points of consumers.

JCPenney, Abercrombie & Fitch and Toys R Us, among other retailers, are a few such examples that recently closed down (or are on the verge of closing down) their retail business as they couldn’t meet the evolving requirements of the fashion consumers. How can retailers overcome this pressing issue? Smart and Experiential Retail stores are the answer!

So, what makes a retail store experiential? Several cutting-edge technologies can be deployed in a smart experiential retail store to better navigate consumers, display product information digitally, assist them via robots, help them try garments virtually and make them pay for products digitally/automatically without waiting in queues.

Not just this, retailers can also integrate metaverse in physical stores, organise fashion shows through VR/Laser to show coordinated dresses to in-store shoppers, recycle old clothes in-store and convert them into new garments, 3D print garments on-demand and scan body through 3D scanners to create made-to-measure garments.

The benefits of implementing innovative technology in retail can vary depending on the particular circumstances. For instance, digitalising the retail business using IoT can enhance customer experience, streamline supply chain management and open up new revenue streams. Macy’s could recently survive only because it timely decided to embrace technologies such as AI, ML and IoT to create a seamless and omnichannel experience for shoppers.

How to create an Experiential Fashion Retail store leveraging technology?

A smart ‘Experiential Retail Store’ goes beyond addressing the touchpoints of its target audience by also providing compelling reasons to customers to visit often, allowing retailers to increase their market share. There are numerous ways by which a traditional bricks-and-mortar store can evolve into a smart retail store and address consumers’ pain points.

In-store Navigation

In-store navigation technologies such as interactive kiosk and mobile app have become essential components of the modern retail experience. They enable customers to navigate and locate products within a store easily. This technology has been particularly beneficial in smart fashion retail stores, where customers are often looking for specific products, styles, colours and real-time inventory updates.

Customers can simply input their desired product or department and receive step-by-step directions to their destination. This technology saves time and eliminates the frustration of wandering around a store aimlessly, looking for a particular product.

In-store navigation technology can also be personalised to fit the needs of individual customers. Smart fashion retail stores can use data analytics and AI algorithms to track customer behaviour and provide personalised product recommendations based on their preferences. This technology can also be used to create customised shopping lists or guides that take customers to their preferred product categories or brands.

Markedly, this technology can also be used in-store to display product reviews, social media posts and other customer-generated content, which can influence purchase decisions and boost sales.

Target (USA) streamlines in-store shopping for customers with the introduction of navigation features through an app, such as interactive maps and shopping lists within its mobile application.

Digital Assistants or Bots

The use of digital assistants or robots in fashion retail stores can drastically enhance the shopping experience for customers. Digital assistants can help shoppers find what they’re looking for, answer their questions about products and provide detailed information on features, materials and pricing.

Based on the shopper’s preferences, digital assistants or robots can suggest products that they might be interested in. They can also help shoppers put together complete outfits, based on their style and occasion. Several fashion brands are already using digital assistants and robots in their stores to assist shoppers.

H&M introduced a digital assistant called ‘H&M AI’ in its flagship store in New York City. The assistant helps customers find the products they’re looking for, suggests outfits and provides styling tips.

Adidas has also introduced a robot called ‘Adibot’ in its stores, which helps customers find products, provides information on the products and assists with the checkout process.

The Japanese retailer Uniqlo has robots in its stores, which can identify products, provide information on pricing and availability and even fold clothes for customers.

Zara has also deployed a virtual assistant called ‘AskZara’ in its stores, which can provide styling tips, suggest outfits and even help customers make purchases.

Smart Fitting Rooms

A smart fitting room is an advanced technology that enhances the traditional mirror by embedding an electronic display behind it, transforming it into a two-way interactive device. Smart fitting rooms offer  dual benefit to both shoppers and retailers, as they not only help customers find the products they desire, but also provide relevant data to employees.

A smart fitting room is equipped with a smart mirror that captures item details using RFID or NFC technology when a shopper enters. In addition to displaying the item, the mirror also shows colours, sizes and pattern options. If the customer requires further assistance, they can use the smart mirror to send an e-request that alerts retail store executives via their smart devices.

Using beacons, the associates can quickly locate the requested item and provide it to the customer. Several leading brands, such as Ralph Lauren, Rebecca Minkoff in New York and Tommy Hilfiger in London, have already incorporated smart fitting rooms into their stores. GAP, with its DressingRoom VR app, uses avatars to help people understand how products will fit without stepping foot in a dressing room.

In an emerging retail market like India, brands and retailers such as Biba, Shoppers Stop and Azorte have already deployed smart fitting rooms in some of their stores.

Self-Checkout System

The use of scan-and-go technology has been greatly enhancing the shopping experience by offering multiple scanning, bagging and billing options. The technology usually relies on NFC tags, QR codes and beacons to function effectively. Now there are newer technologies available such as facial and gesture recognition in self-checkout systems that work by using cameras and sensors to identify and authenticate the customer.

When a customer enters a self-checkout station, the system will capture an image of their face and use facial recognition software to verify their identity against a pre-registered database. The customer may also be required to perform a gesture, such as waving their hand or making a fist, to further confirm their identity.

Once the customer is authenticated, they can begin scanning their items and placing them in their bag. The system will use weight sensors to detect when items are added or removed, and will automatically add the cost of the items to the customer’s account. The customers can confirm their purchases on the screen and complete the payment process using a pre-registered payment method. The system will then use facial and gesture recognition to verify the payment and complete the transaction.

Bestseller’s smart stores in Guangzhou and Shenzhen in China use gesture recognition (facial) through which shoppers can complete the registration process in-store for further shopping and payment. New Amazon store in Los Angeles has introduced palm-recognised check-out system.

Recycling Technology

There are several benefits that fashion retailers can get if they install recycling technology in their stores, such as reduced waste, improved sustainability, enhanced brand image, increased customer footfall, cost savings and access to new revenue streams. Recycling technology in stores can also attract and retain environmentally-conscious customers.

H&M took a great step in this direction recently with its in-house recycling technology ‘Looop’ which is a closed-loop system that uses a mechanical process to transform old clothes into new garments. The process involves shredding the old clothes into fibres, which are then cleaned and spun into new yarn. The new yarn is then used to create new garments without the use of any additional water or dyes. The Looop system is located in a store in Stockholm, Sweden and the process takes about 5 hours to complete and produce a new garment right in front of the customer’s eyes.

3D printing

3D printing allows fashion retailers to create custom-made products by selecting colours, patterns and materials on-demand, which can be a unique and exciting experience for customers. The technology creates products in real-time, allowing customers to see products being made right in front of them, which creates a sense of excitement and engagement as customers can witness the product creation process, giving them a behind-the-scenes look into the design and production process.

Moreover, 3D printing technology can also enable fashion retailers to experiment with new designs and test them in stores before mass-producing them. This can help retailers gauge customer interest and preferences, as well as allow them to quickly iterate on designs based on customer feedback.

Performance professional apparel brand Ministry of Supply unveiled an in-store 3D printer that creates customised knitwear (and can produce a customised blazer in just 90 minutes). Printing the garments reduces fabric waste in production by about 35 per cent. Meanwhile, Adidas partnered with 3D printing and design company Carbon in 2021 to release 4DFWD, a running shoe made to help the wearer move forward when their foot hits the ground. This is possible thanks to the shoe’s midsole, which uses a lattice structure with bowtie-shaped holes — a design that would be extremely difficult to produce without 3D printing.

Metaverse integration in stores

Since metaverse is increasingly becoming a revenue stream for retailers, why not integrate the same in offline stores! The big retailers can partner with gaming platforms like Roblox and Fortnite to create a virtual world where shoppers can send their digital avatars sitting in a store and play the game online by choosing a merchandise for their avatar. Or, they can show their metaverse collection to shoppers in-stores.

Bestseller India’s latest metaverse collection for Jack & Jones stores pan-India is the perfect example of metaverse integration into retail stores. The shoppers can witness in-store traditional banner branding in an entirely new avatar.

On the other hand, the smaller retail stores can expand their reach through the metaverse by creating a virtual marketplace within the physical store that provides customers with a larger, more comfortable shopping experience. This can be done due to space constraints and can prove to be highly effective. Customers can easily access the digital space of a store’s market and view the product line and full brand experience. This enables retailers to showcase their entire product portfolio and provide customers with an immersive experience that may not be possible otherwise!

Fashion shows through VR/Laser to show coordinated dresses

Organising in-store fashion shows through laser shows and virtual reality technology can be an excellent way to provide shoppers with a unique and immersive experience. The use of laser shows can add a touch of glamour and sophistication to the fashion show, while virtual reality can provide customers with coordinated dress and outfit suggestions based on the upcoming trends.

Virtual reality headsets or interactive displays can offer personalised styling recommendations to shoppers which makes them feel valued and appreciated. This personalised experience can build a sense of loyalty and trust between the customer and the brand, leading to repeat purchases and positive word-of-mouth marketing.

These fashion shows can also be an opportunity for fashion retailers to showcase their latest collections, unique designs and styles, allowing customers to explore and discover new fashion ideas within the existing inventories.

This approach can also make fashion retailers stand out from their competitors and keep up with the latest technological advancements in the industry.

Why a traditional retail store needs to innovate?

Limited Inventory: Traditional retail stores are often limited by their physical space and cannot carry a vast inventory of products. This can lead to frustrated customers who cannot find what they are looking for. Technology can address this pain point by allowing retailers to offer an endless aisle of products through digital catalogues or online stores.

Limited Information: Traditional retail stores can also struggle to provide customers with detailed information about products, such as size, colour and style options. This lack of information can lead to customers leaving the store without making a purchase. Technology can address this pain point by providing customers with access to product information, reviews and ratings through digital displays and interactive kiosks.

Limited Personalisation: Traditional retail stores can also struggle to offer personalised experiences for customers. Without technology, it can be challenging for retailers to track customer behaviour and preferences. This can lead to missed opportunities to offer personalised recommendations or promotions. Technology can address this pain point by using data analytics and AI algorithms to track customer behaviour and offer tailor-made recommendations, promotions and product suggestions.

Limited Convenience: Traditional retail stores often find it challenging to offer convenience to customers. Without technology, customers may have to spend a considerable amount of time searching for products, waiting in line for checkout, or dealing with limited store hours. Technology can address this pain point by providing customers with self-checkout options, mobile payment options and extended store hours through online shopping.

Cost of setting up an experiential retail store

The cost of setting up an experiential fashion retail store that is tech-enabled can vary significantly depending on several factors, such as the size of the store, the complexity of the technology and the level of customisation required. The cost can also vary depending on the location as some regions may have higher real estate costs or stricter regulations that can affect the overall budget.

However, incorporating advanced technology into a fashion retail store is not that expensive, as believed by the industry. Proximity marketing solutions such as beacons and geofencing and technologies such as NFC tags and QR codes cost less than US $ 70. These technologies are easy to install, bring in high sales and revenue and allow brands to set up their online platforms in hours.

Installing smart mirrors, interactive displays and digital signage can require investments in hardware, software and installation. Additionally, integrating data analytics tools to capture and analyse shopper behaviour can also be done. To provide a rough estimate, setting up a tech-enabled experiential fashion retail store can cost anywhere between US $ 50,000 to US $ 100,000 and the cost can go up if size of the store increases.

As far as India is concerned, it is crucial to conduct thorough research, planning and budgeting to ensure that the investment is worthwhile and aligns with the overall business strategy. Real estate costs can vary depending on the location, with prime locations in metropolitan areas like Mumbai and Delhi being more expensive. Rough estimates suggest that setting up a tech-enabled experiential fashion retail store in India can cost anywhere between Rs.50 lakh to Rs.5 crore or more.