Experiential Retail Stores in the Indian Retail Landscape: Possibilities and Way Forward

Experiential stores are the talking point amongst the retail fraternity these days. At a time when western world is incorporating new-age store innovations to enhance customers’ experience in-store, Indian fashion retailers are rapidly catching up with the trend as well. However, the biggest question arises – Why does a fashion retail market like India require to set up experiential retail stores?

The reasons are many such as long queues for checkout, out-of-stock inventory in required sizes and colours, difficulty in locating the products in stores, unavailability of store assistants in need,  lack of product information etc.

Convenience remains limited in conventional retail set-ups, with time-consuming checkout queues. One key challenge is limited inventory due to physical space constraints, resulting in frustrated customers unable to locate desired items. And, according to Accenture report, shoppers who had a frustrating shopping experience are 3x more likely than satisfied consumers to not buy from the retailer or brand again! Another hurdle is the scarcity of detailed product information, including size, colour and style choices. This deficiency can prompt customers to leave without purchasing.

Personalised experiences are also constrained within traditional retail stores, as tracking customer preferences manually proves difficult. Consequently, opportunities for tailored recommendations and promotions are missed. Technology, data analytics and AI algorithms can overcome this obstacle by monitoring customer behaviour and providing personalised suggestions.

So, how to overcome such prolonged challenges? A smart ‘Experiential Retail Store’ goes beyond addressing the touchpoints of its target audience by also providing compelling reasons for customers to visit often, allowing retailers to increase their market share. There are numerous ways by which a traditional bricks-and-mortar store can evolve into a smart retail store and address consumers’ pain points such as long queues, frustration due to less visibility into inventories etc.

To reduce queues and save time of shoppers, retailers like Decathlon India know how quick the process should be at the point of sale (POS) with RFID-enabled checkout solutions that let its customers enjoy a faster and more convenient shopping experience, ultimately helping to boost their satisfaction and loyalty.

To address inventory issues inside stores, brands like Bestseller India have turned to AI as the retailer has realised the need to scale its technology backbone to increase sell-through rate and reduce unsold inventory. Retailers like Uniqlo India are also mitigating the inventory concern by offering inventory’s real-time information with product description as well as recording daily sales data through handheld devices. Lee’s new store in India has 13.3-inch tablet screens to update consumers about the entire gamut of offerings from Lee in real time.

Endorsing the idea of increasing conversions by adopting experiential store concept, Christian Westphal, Creative Director, ace turtle says, “Everyone is talking about omnichannel, but very few are actually doing it and even fewer are doing it well.” The fact is that the industry shouldn’t do an experiential store just because it can, the industry should do it because it needs to from a business point of view – to have higher conversions and sales.

For higher conversions, it is important that the retailers interact with customers on multiple platforms and touch points. Today customers have many choices and they also want everything presented to them in a flawless, easy manner. If something doesn’t work, they quickly move out. So, everything has to be done with the customer right at the centre of it and that is what omnichannel experience is about.

Measuring the success of experiential retailing is the key

The success measurement also requires a combination of qualitative and quantitative metrics, as believed by Daksh Kapoor, CMO, Kapsons Retail. Parameters such as customer feedback and surveys including specific details about their shopping experience and their overall satisfaction with the store; monitoring Repeat Visits and Retention Rate; measuring the dwell time, i.e. the average time the customers spend inside the store (longer dwell times indicate that customers are engaged and enjoying the experiential elements); tracking the social media engagement and analysing the conversion rate; encouraging customers to provide testimonials and showcasing them to build trust and credibility; analysing the store’s sales performance over time; evaluating the effectiveness of loyalty programs; and conducting a comparative analysis of the stores with a similar niche in the industry will help the brands and retailers gain a comprehensive understanding of the store’s success in terms of customer satisfaction and brand loyalty.

“This information can then be used to make data-driven improvements to the experiential retail strategy and enhance the overall customer experience,” commented Daksh.

As a retailer with a long-term vision for incorporating experiential retail concepts across the entire retail network in India, the goal of Kapsons Retail is to create a cohesive and immersive shopping experience that goes beyond traditional transactions overcoming all challenges. Daksh says that Consistent Brand Experience across all outlets will reflect the brand’s values and aesthetics, while interactive and innovative store designs will engage customers at every step of the journey.

“Data analytics plays a crucial role in continuously optimising experiential retail concepts. Customer feedback, purchase behaviour and social media engagement, when analysed, will refine and tailor experiences to meet the evolving customers’ preferences. Employee and Training Engagement will prove to be integral to delivering exceptional experiential retail experiences,” added Daksh.

How can fashion retailers start transitioning to have experiential retail stores?

Although it’s inevitable for the fashion retail fraternity in India to go for experiential stores sooner or later, there has to be a framework that needs to be followed by them in order to adapt technologies to lure and engage shoppers inside retail stores.

Since the concept revolves around creating immersive and engaging retail spaces that go beyond traditional shopping experiences, elevating customer satisfaction and brand loyalty, Team FTJ also aims to infuse innovative approaches in the industry that may further help in redefining the future of fashion retail in India. Our team, hereby, lists a few of experiential zones that a retailer, irrespective of the size or scale, can implement as a pilot project to see long-term feasibility of the same and attract more shoppers in stores and increase revenues.

Zone 1 – Consumer Experience Zone

Today, consumer preferences are given priority by both offline and online fashion brands. Truly understanding consumer’s needs and effectively translating them into exceptional consumer experiences can deliver huge benefits for a company, not only improving loyalty and increasing sales, but also empowering staff and boosting the bottom line. Technology plays a vital role in enhancing the customers’ store experiences. This zone can be created keeping different retail functions in mind that directly affect consumers’ in-store experience.

Zone elements:

Clothing To-Go Window – Before a customer walks into a store, he/she passes across it, stops there outside for quite a few seconds. These few seconds are enough to make up their mind if they want to purchase from the store. Even if they do not, the brands catch the eyes/data to further make strategy. Clothing to-go Window placed outside the store is the solution that offers on-the-go can tap colour swatches on a touchscreen.

Brands/Retailers using it – Bloomingdale’s Departmental Store for Ralph Lauren

Robot as a Service (RaaS) – An AI-driven autonomous robot concept helps retailers in giving personalised suggestions and advices when customers walk in a store. This further enables shoppers to spend more time in the store.

Brands/Retailers using it – Lowe’s, Prada

Smart Kiosks – With an instant catalogue on big screen (Smart Kiosk), customers can search if apparel in a certain size is available in the store or not. If unavailable, order can be placed in the kiosk and the product will be delivered in the customer’s house.

Brands/Retailers using it – Max Fashions, Reliance Retail (Azorte), Lee & Wrangler (India)

Smart Mirrors – A mirror attempts to shortcut the long process of trying and retrying on clothes using AR and VR. Using the smart interactive mirror technology, the retailers can evaluate the shoppers’ data and make their product selection process seamless.

Brands/Retailers using it – Neiman Marcus, Lululemon, Ralph Lauren, Lee & Wrangler (India), Azorte (India)

Barcode Scan, Pay and Go – This scan and pay option enables no check-out purchase for the customers. Using an installed app, the customers will automatically be billed with the help of card details saved in a customer’s account, when they exit the store.

Brands/Retailers using it – Walmart, Amazon

Chatbots – The customers can use a pre-installed cognitive assistance app in their smartphones and get suggestions/directions using chatbots for a specific item they are looking for.

Brands/Retailers using it – Macy’s

Zone 2 – AI-based Clothing Zone (Designers)

Designers such as Gaurav Gupta and Falguni Shane Peacock are experimenting with their cloth collections which are AI-based. The designers are collaborating with tech companies to make such clothes and this pilot zone can be dedicated to figure out if their target audience will walk, see their collection and understand the algorithm and pattern behind such dresses.

Zone 3 – 3D Zone (Virtual 3D Rendering, Body Sensors)

3D body scanning or 3D prototyping inside a store can help retailers deliver a customised garment product in a few hours, which is not a fad anymore. These body sensing technologies scan a body, take thousands of measurement points and suggest the actual size for cloth to be fitted on that body. A good example of this concept is Ministry of Supply (USA) that’s equipped with high-end technology to manufacture a customised knitted garment for a shopper.

Zone 4 – Circular Economy (CE) Store

This theme should also be given place by retailers while creating experiential zones as their pilot project. There are seven forms of sustainable fashion – on-demand; green and clean fashion; high quality in minimum possible time; fair and ethical; repair/rework and upcycle; rent/lease and swap; second-hand and vintage clothing. Technology can help achieve these forms of sustainability thereby boosting CE concept. The retailers such as H&M and Zara have already implemented such concepts in their stores, while in India, Lee Studio has been set up in the newly opened Bengaluru-based Lee store to offer a variety of services such as express alteration, badging, rip and repair, embroidery and lifetime mending.

Potential challenges that the Indian apparel retail industry should be prepared for

Implementing experiential retail stores in India may come with some unique challenges. Some of these include cultural sensitivity as concepts impact customer preferences and buying behaviour, limitations in logistics and infrastructure, the digital divide in some rural and remote areas, economic considerations, language barriers as India is a nation with a plethora of languages and English may not work well in different regions, posing a challenge for retailers to invest in technologies, market competition and security and shopper safety.

To overcome these challenges, it’s essential to have a well-researched and localised approach to experiential retail. Collaboration with local partners, employing data-driven decision-making and continuously gathering feedback from customers can help in refining and optimising the experiential store strategy in India. Adapting and iterating based on customer preferences and regional feedback will be the key to success in this dynamic market.