Samsung raised eyebrows earlier this year when it launched its 837 store in New York – a purely experiential venue, with no transactional capabilities. So is this the future of bricks-and-mortar retail, or is the electronics brand boldly going in a direction that most retailers aren’t yet ready to embrace?
I think the first question we should ask in this debate is why would a retailer or brand launch a non-transactional store?
Apart from generating a burst of publicity, which is relatively short lived, experience centers do create a unique opportunity to interact with consumers on a deeper level. Many shoppers will feel confident to explore a brand if they don’t feel the pressure to buy. Equally, it creates a platform for experimenting with new in-store technology, to see which digital devices best engage shoppers.
Another key role of a non-transactional flagship is to showcase new products, so that brand advocates have a sense of what’s coming next. Experience stores are an instant contextualization of a retailer’s merchandise for the customer. Shoppers get to interact with items in the way the brand or retailer had envisaged the merchandize to be used, which is particularly powerful in sectors such as consumer electronics, audio visual products and fashion apparel.
However, I personally feel that the route Samsung has taken is a step too far. While customer engagement is critical in modern bricks-and-mortar, by not offering transactional opportunities, the brand is missing out on the chance to complete the connected retail experience.
Perhaps a better approach would be to put customer experience first, but still enable those shoppers who want to make purchases to transact. A good example of this is menswear brand Bonobos, which opened a New York flagship where consumers can try items and place an order for home delivery.
By adopting this model, Bonobos is successfully using its experiential store to promote sales in other channels. Increasingly, the bricks-and-mortar is becoming a vehicle for brand engagement, building a tangible customer relationship that leads to greater spend online or on mobile.
By realizing this, retailers like Bonobos ensure that the need to convert sales does not get in the way of a beautifully optimized physical retail experience, but equally those who want to buy aren’t finding themselves leaving the store empty handed and disappointed.
Therefore, any brands or retailers considering an experience need to think very carefully about the purpose of their endeavor. Engaging the customer is paramount, so close work with the merchandise designer will prove very important to optimizing the store layout, and close work with a store technology expert will ensure the shopper experience is interactive.
However, if the goal is to sell more product as well as create an exciting concept store, then the option to make a purchase must be part of the mix.