Retail: The new entertainment

Selfridges collaborated with Nike to create an interactive window installation.
Selfridges collaborated with Nike to create an interactive window installation.

Mcgarrybowen New York's managing director says companies are moving beyond the transaction and using entertainment to court consumers and strengthen ROI

Retailers have been struggling in the post-recession economy, but the sharpest brands in this sector are doing something differently. They are moving beyond focusing on the transaction and using entertainment to get consumers to part with their hard-earned cash.

In return, many of these brands are benefiting from stronger sales growth, higher share prices and increased consumer engagement.

Take Burberry, for instance. In its 2013/2014 annual report, the luxury goods house noted a 17% surge in revenue and an 8% rise in profits.  Burberry’s chairman specifically noted "the further integration of physical and digital platforms to enhance the brand experience across all touchpoints, from investments that leverage data and insight in the creation of increasingly personalized customer experiences" as one of the five key factors contributing to its success.

This trend, combined with consumers’ continued love of shopping, makes things start to look really interesting. In its February report, the National Retail Federation predicted that the retail industry is poised to experience its biggest annual growth (4.1%) for the first time in four years.

Selfridges is one of the brands primed and ready to take advantage of this projected sales uplift, as the UK retailer already has entertainment built into its DNA and has long been experimenting with this notion. In 1925, it demonstrated the newly invented television inside its high-end department stores. In 2013, the chain collaborated with Nike to create an interactive window installation that synchronized with the kinetic movements of passersby to highlight the product’s flexibility and, at the same time, entertain and drive foot traffic in store.

This year, Selfridges is taking its retail-as-entertainment strategy further and merging it with culture and cuisine. This month, it partnered with the Mexico Tourism Board as part of a "Year of Mexico" celebration that brings the "unforgettably flavorful foods of Mexico" into its stores through dining pop-ups, "exotic cooking demonstrations," and more.

Industry watchers have certainly taken notice. Luxury Daily, a noted publication in the luxury marketing sector, nominated Selfridges as its 2014 "Luxury Retailer of the Year" for the department store’s "use of entertainment to make itself a shopping destination."

Topshop is another good example of a retailer entertaining in store. Inside its Oxford Circus flagship, consumers can find cafes, cupcakes, nail and blowout bars, and DJs interspersed among its racks of clothing. This year, the women’s fashion retailer announced a partnership to create a line of active wear with none other than singer/songwriter Beyonce Knowles, who will likely appear at the launch to give fans some entertainment while they shop.

In the last five years or so, we’ve started to see some of the most successful retailers go beyond entertaining consumers in the physical world — they’re doing so in the virtual space, too. These retailers don’t just settle for functional online e-commerce or pedestrian look books on social media. They go one step further.

Burberry was one of the early adopters in this space. In 2009, the company created the "Art of the Trench" to get people talking about one of its signature pieces. To engage both existing, high-end consumers and young, aspiring fashionistas, the brand partnered with well-known fashion blog, The Sartorialist, and invited consumers to upload, share, and like photos of themselves wearing Burberry’s famous trench coats. It was a social look book that entertained (like good fashion magazine editorial) and inspired, and sold product at the same time.

Burberry most recently reported that total revenue for the six months ending March 31 was up 9%, and its CFO Carol Fairweather told analysts: "It’s not just about digital commerce. It’s how we embed it in our marketing in the way we communicate with our customers, the way we do our shows, digital innovation, and embedding it throughout the organization is for us I think the point of differentiation and what we plan to continue to do."

Net-a-Porter similarly enhanced its e-commerce site by launching Net-a-Porter Live in 2011, a destination where shoppers can talk to each other and to stylists. They can also see what’s trending and being bought around the world through Google Maps. The retailer’s aim is to use peer groups and expert opinions to help create a more powerful selling tool.

This year, the company announced it is launching another "social commerce experience," the details of which are yet to be disclosed. One worth watching, given Net-a-Porter’s track record.

These retailers, all of whom have moved beyond focusing on the shopper experience as purely transactional, are adding more dimension and fun to shopping. Simultaneously, they have all reported strong trading results. The reality is that if marketers entertain us with an omnichannel presence, our propensity to spend increases significantly. For consumers, this means they can expect more than just the draw of the hottest trends — they can expect a full sensory experience.

In light of this, perhaps it’s time for us to stop talking about retail’s demise and start celebrating its rise.

Ida Rezvani is managing director at Mcgarrybowen in New York.

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