What’s happening?
In the wake of the pandemic, strong consumer interest in health and wellness shifted to an emphasis on self-care. Next came the rise of the feelgood Dopamine Economy – and now there’s a greater need for communal experiences that transcend the everyday, providing a way to connect with heightened and deeper emotional states. In a 2023 study, Wunderman Thompson found that 61% of consumers want brands to help them feel intense emotions.
What’s causing it?
Instead of bringing us closer together, habitual use of technology is giving rise to a loneliness epidemic. In November 2023, the World Health Organisation declared loneliness to be a ‘global public health concern’. As consumers spend more time in the digital realm, levels of distrust continue to grow. Retail experiences have also become homogenous across the market, often feeling flat and samey.
Outlook for 2024
Retailers are finding ways to extend the brand experience and create more emotional resonance with customers. There’s an opportunity here to help consumers unlock and feel deep emotions through retail experiences, further reinforcing to them that there’s still a part of the world that isn’t fake. Rather than feeling burned out and overwhelmed, brands can help them feel part of something larger and more cohesive, going beyond escapism and tapping into a desire for true connection.
07. Emotive Transcendence
While technology will undoubtedly continue to play a large role in retail, it’s the human element that will allow brands to truly differentiate themselves, creating brand experiences that transcend the everyday. “Technology will accelerate the emergence of a distinct experience economy, but the human touch will help future-proof its relevance”, FMZ Ventures investor Michael Zeisser told the Skift Global Forum in Dubai in December 2023. Despite economic uncertainty, demand for unique experiences continues to grow, with spending on experiences rising 65% from 2019 to 2023, according to a 2023 report by Mastercard.
Retailers are using physical locations to provide new perspectives on their brand, using them as storytelling tools and as a place to bring together communities and create new cultural hubs. These spaces are no longer confined to the traditional retail stores and pop-ups, but encompass everything from hotels to residential homes, museums, listed buildings and even Coach’s temporary store on board a decommissioned aeroplane.
Brands are paying homage to specific localities and celebrating the uniqueness of different cities and locations, showing respect and appreciation for the heritage of their chosen sites. In June 2023, high-end US furniture brand RH (formerly Restoration Hardware) opened its first UK outpost not in a flagship retail store in west London, but at a fully renovated Grade-I listed 17th-century stately home in the Cotswolds. The space acts as a luxurious 55,000 square foot showroom, with the brand’s signature interior design complementing the Palladian architecture throughout. Hospitality elements including a restaurant and concierge service also serve to elevate the experience.
On a slightly smaller scale but no less impressively immersive, Muji Base Kamogawa is Muji’s first foray into architecture and hospitality. Located in the Nagasa area of Kamogawa City, Chiba Prefecture, a rural area 90 minutes drive from Tokyo, customers can book a stay at a traditional house via Airbnb that’s renovated in the style of Muji and fully stocked with Muji products. Targeted towards digital nomads, a visit to the house allows visitors to fully immerse themselves in the local culture, booking additional experiences around food and agriculture during their stay.
Also in Japan, New Balance launched a new concept store in December 2023 designed to prioritise interactions with staff and between customers, embedding itself into the local community. Located in Kichijoji, an area of West Tokyo near both residential and commercial hubs, the store has a much smaller footprint than most of the brand’s outlets and carries far less stock as a result (around 20% of the Harajuku store). The brand also hopes to build ties to the local community through the high concentration of runners in nearby Inokashira Park. Store manager Masashi Ishida highlights the appeal of the community-focused space: “We [want to] create a space where people can gather for purposes other than shopping, such as ‘If you go to New Balance Kichijoji, you can meet someone’.”
Chinese fragrance label Documents has created an immersive experience with its scented bookstore on Yuyuan Road in Shanghai. Dubbed Documents Yuyuan Study, the library-like space invites visitors to indulge in a collection of books exploring the meaning of trees in the Song Dynasty for free while experiencing Documents’ fragrance products. Merging a reading space and a product showroom, the store acts as a community hub while fostering cultural exploration.
08. 4D Worlds
Digital technology is irrevocably transforming the way that people interact with brands and retailers. New interfaces are allowing us to move into a new era of retail interaction, changing how we engage with brands. Whether it’s a digitally integrated store experience or a levelled-up approach to e-commerce, technology is creating opportunities for brands to radically reimagine discovery. Consumers are ready for it: according to a 2023 survey by Klarna, 63% consumers believe AR and VR will enhance the shopping experience (rising to 74% among Gen Z and Millennials).
In November 2023, US furniture retailer Crate & Barrel unveiled a photorealistic virtual store – an immersive digital replica of its recently opened New York flagship created in partnership with AR and VR retail specialists Obsess. Obsess founder Neha Singh highlights the importance of discovery for virtual stores: “With most e-commerce stores, you’re relying on the customer to search for something, so there isn’t as much organic discovery,” she says. “But in-store, you’re constantly discovering new things you may never have searched for. Our experiences bring that discovery back online.” While we’ve seen virtual stores done before, this iteration takes the concept to a new level, combining high-definition graphics with interactive elements that are more commonly found in video games. For example, checking out a set of cutlery on a virtual shelf sends it flying out into the room to be laid out stylishly on a nearby table. Taking this more immersive approach allows the brand to reimagine the e-commerce experience, which hasn’t fundamentally changed in the last decade or more. With this, there are huge opportunities to develop updated e-commerce experiences that are more discovery-led – in a similar way to a physical store – while also creating a strong incentive for customers to visit the actual bricks-and-mortar location if and when they get the chance.
It’s not just online environments that are undergoing a technological transformation, store spaces are also being reimagined through a digital lens. Opened in April 2023 in Beijing’s upscale Sanlitun area, Chinese automotive brand Jidu’s Roboverse is a hybrid digital-physical ‘experience centre’ that focuses on brand building and digital engagement. Upon entering the ultra-futuristic interior, visitors are prompted to create their own ‘Robo-self’, a virtual avatar that accompanies and interacts with them at various touchpoints on their journey through the store. Engaging with these digital experiences allows visitors to find out more information about the brand’s Robo SUV – it’s part futuristic showroom, part immersive art exhibition.
Luxury cosmetics brand Rituals brings 4D discovery to the wellness category with its tech-enabled ‘Mind Oasis’ spaces at selected flagship stores across Europe. The immersive spa-like experience provides an elevated take on wellness retail, helping to rejuvenate customers with innovative treatments including a ‘zero gravity’ relaxation chair and a ‘brain massage’, which combines breathwork, 4D sound and haptic vibrations.
ADD WORKGROUP