In this months Retail Focus column, I discuss how more retailers are embracing the new ‘experience economy’. Should we be charging shoppers to enter stores?
With the nation gripped with Royal Wedding fever, it’s hard to avoid the headlines and the big debate – who should foot the bill? While taxpayers aren’t funding the wedding itself, it’s likely they will be paying for security, road closures and policing, all of which can come at a high cost. Perhaps Harry and Meghan could take a leaf out of one resourceful couple’s book, who – when realising they couldn’t afford a big wedding – decided to charge their guests a £150 admission fee; putting them up in an all-inclusive resort to sweeten the deal. Controversial… perhaps. Or just smart thinking?
After all, paying for experiences is hardly new. We visit sporting events, music festivals, the theatre, historical landmarks, and know that there will be an entrance fee. And as more and more retailers are moving towards embracing the new ‘experience economy’, could paying to visit a retailer soon become the new norm?
It’s certainly become something of an emerging trend. Take mobile network Three who is launching its ‘All you can pug’ brunch event this month, where guests pay £5 to gather with their furry friends to enjoy a tasty meal together and 75-minute experience. Or the ‘Gucci Garden’, a grand example of experiential retail where shoppers were charged €8 to enter its multi-level galleria. Then there is small UK coffee chain Zieferblat who asks guests to pay per minute to enjoy their facilities – but don’t charge them for the coffee itself. And let’s not forget one of the original ‘paid-for’ outlets – Costco customers have long been paying an admission fee, although they hardly receive a retail experience in return.
In some cases, retailers take the opportunity to sell space to third-party brands, a sensible way to recoup some of their commercial costs (as long as they choose wisely). But increasingly, retailers are seeing their premises not just as selling spaces but as ‘doing’ spaces, where giving a high-cost experience for free makes little commercial sense.
Is there an opportunity for retailers to charge for experiential retail, and will shoppers be willing to fork out? Absolutely. But not for things which should already be integral to the brand experience instore.
There is, however, a fine line between added-value experiences and minimum expected standards. I have certain expectations when I visit a store or an outlet. They’re not what I’d consider to be big or demanding, simply what smart and savvy brands should be delivering without a second thought.
Shoppers are perhaps a little more discerning than retailers given them credit for. Most are not time poor, but are time precious – so they are selective about how they spend time as well as money. There are certain areas of the store they want to hurry through – and conversely, certain areas they’re more inclined to linger. In the same way, there are certain experiences they expect as a given, and others which they see as ‘high value’ and are more inclined to pay for.
It should go without saying, but a shopping experience that’s logical, easy and enjoyable should come as standard. In the pursuit of delivering ever-more imaginative and engaging retail experiences, the fundamental basics of good retailing should never be allowed to slip. They need to be well maintained, all day, every day, offering a consistent experience to shoppers at every visit. These are the not-unreasonable expectations of what any good retailer should unequivocally be offering.
Perhaps if more retailers and store teams approached maintaining daily retail standards as if their customers had paid to enter their store, we would immediately see a visible difference. Why is so much attention given to the small details of daily maintaining standards within the hotel industry? Because customers are paying to be there, and expectations are therefore higher, on both sides.
Retailers could ask themselves the question: ‘If we were charging customers, would they buy it?’ Essentially they should be creating an experience that is worth an admission fee, even if one is never charged. My bugbear is that more retailers should be raising standards as if they had a monetary value attached. Which in fact, they do – getting these essentials right helps to foster brand loyalty, makes for an enjoyable shopping experience and creates a warm, welcoming retail environment. And what price all of that?
Really, there are no excuses here to not be getting it right – with numerous examples of best practice and support out there from specialists to help retailers deliver ‘root and branch’ transformation of their retail experience.
Retailers need to get realistic. Before they start heading down the admission fee route, they need to look at what they’re currently offering and asking themselves if this is simply a decent shopping experience. Until more retailers get this right, charging more for elevated experiences will be a very long way off for many.