On my recent trip to Shenzhen, it’s clear that lifestyle retailing may have the potential to seriously change how people shop. Just as in the 1970s when the enclosed mall became a main focus for communities and shopping, what’s being called “experiential retailing” is set to change it all up again.
First, what impressed me in Shenzhen was the number of upscale areas where shopping, restaurants, bars, and other types of entertainment were integrated into one dedicated area. We cruised through the Huawei store (I didn’t know they made cars, too!), ducked into the collectibles store, watched kids trying to get Lotso toys in the crane machine arcade, and saw people dining in the various restaurants. Quite the way to spend an evening.
Experiential retailing is big there, too, and here meaning that shoppers can interact with product beyond picking up a box from a shelf and looking at it. I live within a five-minute walk of a LEGO store and a Harry Potter store, and they are jammed almost all the time—with lines to get in on weekends. (Reminds me of the Louis Vuitton store on the Canton Road in Hong Kong.)
It’s clear retail is transforming, and while that’s not a particularly original conclusion, it’s borne out by a recent study in Europe and the UK by Westfield. It’s worth reading, and while they don’t make the connection, I think there are practical inferences for the U.S. as well. The study is fairly extensive, but one key takeaway is that 81 percent of consumers are willing to pay more for a satisfying retail experience. Of course, any survey needs to be taken with a grain of salt, and Westfield is in the business of promoting their shopping locations. Still, anecdotally, when I see crowds in stores here—or anywhere really—and observe how they interact around products, this seems to bear out Westfield’s findings.
Westfield’s report also says that retail will “tip” by 2025, and retailers should be prepared for a new reality…in just about a year.
Whether or not that will be the case, it does make one think about how this will all work—and how new thinking may be required. The word of the year seems to be “omnichannel,” meaning you have to be everywhere all at once, to purloin somewhat the movie title.
I expect we’ll see new models for measuring success at retail. Some of these, of course, are already in process or established, and the availability of data to date far outstrips anything we had in the past. And it may add another—less empirically quantifiable piece to the equation—how a consumer feels based on an experience that may lead to a sale.
What do you think?
Thanks to the well manage economy in China, Mr. Xi Jinping and the so call “Communist Party” achieved bring up 80 million of Chinéese citizens from poverty to a middle-class consumer individual. In just 25 years. I am eyewitness of this progrese since my first visit to China 40 years ago, joining my good friends Barbara and Fred Cord. Deng Xiaoping was on the helm and the progress began. Nowadays, we can see everywhere, Dong. Xi, Nan & Bei. happy shoppers.