Retail Has Struggled but Is Using Experiential to Keep Consumers Invested

Area15 is an upcoming retail and live entertainment venue anchored by interactive art and technology experiences. The 200,000-square-foot site, which opens in April, is a joint venture from real estate development firm Fisher Brothers and creative agency Beneville Studios.

Despite retail industry struggles, brands are still investing in nontraditional brick-and-mortar formats. According to a 2019 survey by Kearney, 81% of Gen Zers prefer to shop in stores and 73% like to discover new products in stores. More retailers are using experiential techniques to evolve and compete with online shopping because of this.

In January, Area15 announced a partnership with Intel, which will open an onsite production hub to work with artists and smaller brands to create and test experiential design and tech concepts onsite. The venue will have tenants like Meow Wolf, a Santa Fe, N.M.-based company that produces immersive art experiences, location-based VR company Nomadic and a Todd English food hall.

“We believe immersive, authentically engaging and inspiring experiences in retail are not only possible but should be accessible for all,” said Joe Jensen, vp and general manager of Intel’s retail, banking, hospitality and education division.

So far, Intel hub collaborators include Trav MSK, a Los Angeles-based artist who specializes in wall and train graffiti art, and Papinee, a Hong Kong company that creates children’s storytelling kits and family-friendly retail pop-ups. Jensen said projects could include rotating pop-ups or permanent installations.

Winston Fisher, CEO of Area15 and partner at Fisher Brothers, said the Intel collaboration aims to raise the “standard of experience design” and create “best practices for combining technology, art and commerce in exciting, unexpected ways.”

Brands are also emphasizing experiences in their flagships. Tiffany & Co. opened the Tiffany Flagship Next Door in January as the brand’s temporary flagship while its Fifth Avenue location undergoes renovations through 2021.

The store has four floors that showcase collections and offers similar services to its old location while aiming to evoke brand familiarity in a refreshed, modern atmosphere. Each floor has design elements that complement its products with brand icons creatively integrated, like Tiffany’s flora and fauna motif stenciled onto crates.

For the two years it’s open, the brand plans to use the first-floor atrium for rotating installations and interactive pop-ups with partners. The brand declined to comment on what these pop-ups will be, but the first installation is a blue replica of the Empire State Building backed by a neon silhouette of the New York skyline.

Shahla Hebets, founder and CEO of brand marketing strategy firm Think Media Consulting, said the store shows how an interactive flagship could revitalize a brand.

“Tiffany is using this store to get people talking about the brand again and to highlight things that have made the brand what it is,” she said.

Pop-ups are an obvious way for retailers to engage consumers, but they can also be a testing ground for in-store activations. For Levi’s, personalizing jeans is a draw for online shoppers, so to showcase customization offerings like in-house tailoring and laser-printed denim designs, the brand opened a temporary store in Miami.

Levi’s Haus Miami, which opened during Art Basel and runs through the end of February, is housed in 12 shipping containers where consumers can purchase denim and have it customized at onsite studios. The outdoor store also has an artist workshop program and a tech-fueled merchandise drop created by design and experience agency Jam3.

Jennifer Sey, svp and CMO at Levi Strauss & Co., said the brand not only wanted to demonstrate its customization techniques to consumers but also use the pop-up as a testing ground for potential concepts at permanent stores.

“As we look to open a store in Aventura, [Fla.] in just a few months, we’re learning about what experiences and products are most relevant to the consumer in Miami,” Sey said. She noted the pop-up isn’t as restricted financially “because we are also measuring things like earned impressions, sentiment and PR value, so we can take some liberties and try new things without the same risk as if it were a permanent store.”

Sey said the brand is looking at the temporary store model as a separate business opportunity, but declined to share additional information on how it performed so far.