Strategy

The experiential retail journey, the unavoidable investment in luxury

Inspiring customers, capturing their attention and providing memorable experiences seems to be the key marketing strategy for luxury brands. According to a study, 85% of consumers are more likely to buy after attending an event or experience.

Isotta Giorgini

By Isotta Giorgini02 décembre 2021

The Gucci fashion house has introduced a brand new immersive in-store experience to showcase the various facets of the brand (Gucci)

Once again, Gucci surprises us, messing up the cards on the table. If we thought that digitalization and virtual reality would be the future of luxury retail, we might have changed our minds in front of another successful experiment signed Gucci. The well-known fashion house introduced the Gucci Circolo, a totally brand-new experience aimed at discovering the diverse facets of the brand throughout an immersive in store journey. Located in the majestic building of the Duke Gallarati Scotti, the Gucci Circolo is a succession of experiential rooms revealing interesting codes of the Maison, plus highlighting its tight bond with music, cinema and art. Indeed, the Gucci Circolo offers to its visitors the exclusive opportunity to view and eventually purchase the newest Aria collection, including “The Hacker Project” in collaboration with Balenciaga.

Gucci retail sales grew by 7% in Western Europe and by 24% in North America thanks to the strong investment in such immersive experiences

Kering Financial publications

The Gucci Circolo is a succession of experiential rooms revealing interesting codes of the Maison, plus highlighting its tight bond with music, cinema and art (Gucci)

Every room is perfectly curated and exudes the creative vision of Alessandro Michele (Gucci Creative Director). Moreover, this experiential journey is not only aimed at educating its visitors driven around by the guide’s storytelling, but also surprising them with fun and entertaining laboratories to join. Thanks to the Gucci Circolo, the Maison showcased how experiential retail can make people feel part of a community, while at the same time, driving traffic to the store. According to Kering financial publications, in the third quarter of 2021 Gucci retail sales grew by 7% in Western Europe and by 24% in North America thanks to the strong investment in such immersive experiences as well as the rolling out of Aria Collection since late September.

Being part of a community

          However, Gucci is not the first one at proposing experiential retail as there are many luxury stores which have grown upon this idea. A striking example is the New York-exported concept store of Kith. The latter offers a wide range of street-style, niche and incumbent luxury brands with an ever-changing store layout. The peculiarity of Kith lies into its installations set as a result of collaborations with well-established labels, ranging from fashion to iconic characters (e.g. Barbie or Mickey Mouse). Every time you enter a Kith shop, you are ready to live a new experience as the store atmosphere is giving different vibes depending on the protagonist brand. Plus, the store stands out for its own internal bar known as “Kith Treats.”

The Kith concept store has succeeded in distinguishing itself by installing a "Kith Treats" bar in its shops (Kith)

Such snacky place represents an opportunity for customers to socialize and totally feel part of that community made up of fashion, street-style lovers. Again, this convivial area guarantees interaction and confrontation among visitors, allowing the development of dynamics that would be prevented online.  Being in contact with other vivid consumers creates an indirect marketing strategy. In other words, Kith can positively benefit from the word of mouth and exchange of live feedback between both loyal and new customers. Such involuntary advertisement of the brand not only creates buzz but also generates more sales, while augmenting the rate of return. As a matter of fact, it is proved in PSFK survey that 73% of shoppers will spend more time and money in stores offering both experiences and products as they want to be inspired by the places where they shop.  

Another brilliant example of experiential luxury is the store of Supreme in Brooklyn, New York City. The skateboarding label developed an ad hoc experience for its specific target, unifying clothing and skates. The result? A massive free-standing, elevated skate bowl in front of a sophisticated retail area. Such structure in the middle of the store not only guarantees entertainment, but pragmatically embodies the skaters culture Supreme has always been world-wide recognized for. To reinforce the idea of community and make customers easily relate, even the staff is made up of skaters and street-artists. This type of experiential retail provides a clear idea of the unique identity of Supreme, while promoting its style, quality and authenticity.

A strategy that attracts more customers

The Michael Kors brand offered a secret casino in its London shop for the release of its capsule collection with the James Bond franchise. A way for its customers to live a unique experience (Michael Kors)

It is also true that many luxury brands invest their marketing budget in immersive experiences to rather promote a collaboration and drive traffic to their store as it is reported that 85% of consumers are more likely to purchase after attending an event or experience. This is the case of the American luxury brand Michael Kors, which recently featured 007 film franchise in a capsule collection in occasion of the launch of the newest James Bond movie. For the event, Michael Kors decided to open a hidden casino in its London Store where customers could enjoy a 20-minute experience and identify themselves with James Bond. The location reproduces the semblances of a secret room with mirrors turning into doors to further make people relate to the renowned action movie. By sharing such exciting experience on social media, Michael Kors has mutual benefits: it does not only create billions of impressions around the new capsule collection, but it also reaches a new target between Michael Kors customers and James Bond enthusiasts. Indeed, Capri Holdings Group last financial report further confirmed the success of this sophisticated marketing strategy as Michael Kors total revenue is reported to have increased by 10% in comparison to the prior year.

In conclusion, experiential retail represents the best post-pandemic solution to enhance in store sales. After a long period of lockdowns and restrictions, customers are now more willing to purchase physically, in store. However, their expectations get higher as a result of the prolonged use of digitalized platforms, during their staying at home. Nowadays, being immersed in sensational rooms, while interacting with other people and feeling part of a great community seems to be the most logical step luxury brands could take to impress their audience.  

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