Experience vs Things: What to do, Next?

With a generational shift in spending 'on experiences and away from things', how can retailers profit in the age of experiences?

Event essay: How can retailers profit in the age of experiences? (c. Unsplash/Tom Soddage)
Event essay: How can retailers profit in the age of experiences? (c. Unsplash/Tom Soddage)

A generational shift in spending ‘on experiences and away from things’ was cited by Next chief executive Lord Wolfson last week, as the retailer announced its first profit decline in eight years. The announcement came as consumer spending data for the final quarter of 2016 showed a growth in pubs, restaurants and entertainment compared to High Street clothing, widely attributed to the trend associated with millennial shoppers.

So what would the brand experience community do in Lord Wolfson’s shoes? PrettyGreen founder Mark Stringer believes the brand should harness its core strengths and bring those values to life. "Next’s success as a retailer is immense. It has developed deep trust as a brand, quality products and highly competitive services. The broad appeal of Next across a range of demographics is enviable.

"We would love to see Next extend some of these strengths and bring the brand to life for prospective or lapsed customers. However, there’s a danger that the brand struggles to have a strong identity outside of the products, and younger consumers will struggle to articulate what a powerful and equity building 3D manifestation of the brand might be - cracking this and future proofing it is key."

Wasserman’s business director Jade Garrow Newport also sees the opportunity in Next’s sizeable footprint on the UK’s high street. "All trends currently suggest that retail will increasingly focus on one of two things; inspiration and convenience. With such a huge presence on the UK’s high street, Next has a great opportunity to lead the charge in terms of convenience and writing the future of onmi-channel shopping. It should be looking across its entire chain, from delivery and personalisation to in-store and fitting room experiences. By introducing technology with purpose and care, Next can build itself once again."

But in the age of experiences, how can Next drive its varied demographics through the doors and to the tills?  Geometry Global’s head of experiential Andy Dougan urges Next to "think beyond transaction and become an experience in itself. What reasons can be created to compel people to spend time in a Next outlet? They have an enviable retail portfolio with a physical footprint in high profile, desirable locations. They have an existing force of brand ambassadors in the form of their front line staff – Lush is a great example of a retailer that leverages physical stores with highly engaged staff ambassadors to create desirable, compelling in-store experiences."

The rise of the experience store

Leveraging a physical presence, particularly such an impressive footprint as Next’s can be key to developing a programme of experiences. Paperchase is among the brands to develop a series of in-store events to highlight the seasonality of its products.

Dougan cites Uniqlo’s flagship London store as an enviable backdrop. "It is more of an open members club with a rooftop terrace that holds regular events and two floors housing a cultural, community hub showcasing their LifeWear range."

Meanwhile, Stateside the Nike flagship store in New York was praised by Dougan for providing "an experiential context to their purchase decisions" where customers are invited to try and buy products in a store which includes an onsite basketball court, mini football pitch and treadmills.

"Finally, Charlotte Tilbury continues to innovate with a heavy emphasis on creating an interactive experience that invites you in and embraces you. From the digitally enabled make up mirrors that allow you to change and share your make-up looks with your social networks in real time, through to the Hollywood VIP room environments you are immersed into the world of Charlotte Tilbury."

Beyond in-store

Trends and demands in the retail experience evolve quickly though, warns Stringer. "Take Abercrombie and Fitch - the brand once regarded as a millennial favourite has now been hit for not being able to evolve quickly enough out of half-naked model shop assistants and collegiate wear. 

"It is important to consider the brand experience outside of owned environments and channels though, as this is where it is most likely to impress prospective customers. Nando’s, despite having around 300 restaurants in the UK, makes a huge impact with the experiences they offer off site. Their Rule the Roost activation represents the beating heart of the brand when it pops up at festivals offering chicken and live music from the legendary Cock-o-Van; whilst its Music Exchange reinforces the brands South African heritage within the same passion."

And the pop-up approach is another go-to for brands looking to engage with a targeted demographic. Patagonia opened a pop-up second hand shop in Shoreditch, placing the ethical clothing line in one of London’s popular vintage clothing areas. Garrow Newport applauds the brand for "living out its message of reusable clothing and connecting real customers with the London area’s well known obsession with vintage clothing. A massive success, the pop up shop saw huge queues and helped to further push Patagonia’s focus on recycling and reusing natural materials."

Millennial mindsets

So who are the brands that are winning with the experience-hungry demographic? Vans was universally commended by Event’s audience for its House of Vans, bringing the brand’s story, values and skater background to life in a compelling experience, while creating an impressive events programme crammed with gigs, creative gatherings, exhibitions and skate park sessions.

Young women’s fashion retailer Missguided was also highlighted for creating on-point experiences for its young audience. Garrow Newport explains: "Love them or hate them – and it’s very likely you’re under 18 if you love them – its move from online onto the high street has worried many traditional bricks and mortar retailers. Missguided opened their first store in Westfield Stratford City late last year and it’s everything you would expect it to be; brash, loud, pink and totally Instagrammable – perfect for its young audience. This focus on store experience helped the brand increase it sales by 60% last year alone."

Undoubtedly the focus on the shift towards spending on experiences has focused on millennials, with Eventbrite’s research in the USA revealing that 78% of 18-34 year olds would choose to spend money on a desirable experience or event over buying something desirable, and 55% of millennials claimed to be spending more on events and live experiences than ever before. As home ownership moves increasingly out of reach for many, especially compared to previous generations, disposable income for leisure is more prevalent.

Yet shared experiences, from Secret Cinema to Tough Mudder not to mention the launch of festivals for all demographics, has widened the experience appeal far beyond younger audiences. PrettyGreen’s Stringer adds: "Our spend on local experiences has grown exponentially – driven by a range of factors, including the growth of casual dining, the explosion of festivals and, pioneered by Red Letter Days, but now available from local supermarkets, the gifting of experiences. People now see the value of experiences in fuelling our identity and giving us memories and anecdotes to last a lifetime."

"We all crave experiences more than ever, the difference with millennials is that they have less disposable income to play with and, when it comes to making a choice, they appear to be more willing to forgo practical products for experiences that will enrich their lives."

Millennial or not, we are all finally living in the age of the experience economy, says Michael Brown, managing director at MKTG, the agency that hosted AdWeek Europe’s Are You Experienced session, which explored the notion that in the future, all advertising would be experienced.

"The term the experience economy is decades old, originally coined by an author called Alvin Toffler in Future Shock, in which he predicted that in the future, everyone would spend significant proportions of their salary on experiences. We’ve heard Steven Howard, chief sustainability officer at Ikea reference that consumers have hit ‘peak stuff’. Apple has posted consecutive declines – so we are starting to see in some areas a decline in things, and if so what fills that void? It can only be the experience economy."

"Secret Cinema and Escape Rooms – they aren’t selling things, they are selling exeriences, future moments, shared memories – social currency and bragging rights. For brands that do have products to sell, they almost have to consider their proposition from an experience angle."

Download Event's subscriber-only shopper report here, which brings together seven essays on the biggest trends shaping this rapidly-changing area of activation.

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