Experiential Retail: Are Hotels Replacing Flagship Stores?
To enhance their customer experience, companies are merging hospitality concepts into retailing methods through experiential retail. By doing this, Muji hotels and West Elm properties are not only connecting with shoppers and growing loyalty, they are also creating a new type of retail flagship which boosts global sales and brand recognition.
Gone are the days when customers would just walk into your store, buy your product and leave. Why? Because they can do just that from the comfort of their home, having access to an immense amount of online choices. Plus, younger generations of customers (a.k.a millennial's and Gen Z) are not exactly impressed by the cookie-cutter type of experiences. What that means for retail brands is simply to look into new approaches to connect with their customers.
With that backdrop in mind, a growing group of mid-tier retailers are eager to capitalize on the experiential retail trend. Top retailers with strong brand identities and marketing capabilities are pushing the boundaries of their core business by venturing more and more into the world of hospitality and personalized service.
Muji
Japanese retailer Muji is a successful example that has gotten into the hospitality space. Muji is known worldwide for its brand philosophy of minimalism, and its pared-back designs with simple branding across homeware, furniture, fashion and office supplies. The retail company has 917 Muji stores operating worldwide.
The first Muji hotel opened in Shenzhen, China in January 2018, followed by a second property in Beijing the same year. This year in April Muji launched a third installment in the Ginza district of Tokyo, a floor above their new flagship store.
Muji hotels manage to leverage their brand attributes throughout hotel properties, by bringing the brand's philosophy to the hospitality space with basics such as towels, guest room decorations, furniture and even menu and restaurant designs. Muji Hotels' aesthetic and egalitarian approach aligns nicely with the wants of modern travelers and fulfills the lifestyle needs of millennials.
Muji has successfully created hospitality spaces which offer continuous consumer touch points and enhances rich customer experiences. The company recently told NHK, a Japanese broadcaster, that its sales strategies today are to "hope that the hotels will further boost its brand recognition and help expand sales globally". The concept of experiential retail has definitely served as a successful tool for Muji to adapt in today's dynamic industry.
West Elm
The American modern furniture retailer West Elm is another example which attempts to expand into the experiential trend. West Elm operates about 100 stores across USA and has partnered up with hospitality management firm DDK to create five new boutique hotels across the US.
The estimated opening of its first property will be in 2020. Five cities were initially selected as initial markets for the new hotel concept: Detroit, Minneapolis, Oakland, Portland and Indianapolis although the final markets have yet to be confirmed.
The furniture and lifestyle label attempts to channel the company's unique and highly identifiable brand, by integrating West Elm furnishings throughout the rooms and public spaces of the properties. The company plans to furnish each hotel with products and artworks from their respective communities, which is an extension of the brand's West Elm Local program.
Similarly, the hotels' restaurant menus are based off of regional cuisine to ensure each property has its own fingerprint. The initiative goes beyond and aims to build the world's first truly shoppable hotel; though not technically a store, the hotel gives guests the opportunity to experience the furniture before buying them. The furniture and decor in each guest room can be purchasable via an APP which clients could download upon check-in or on West Elm's website. This retailing method creates a complete brand experience for customers without any pressure coming from hovering sales floor associates. The upcoming boutique hotels of West Elm aim to enhance consistency of the brand's aesthetic and enhance personalized customer experiences.
To enhance their customer experience, companies start to merge hospitality concepts into retailing methods through experiential retail, as a way to buff up their brand names. With experiential retail and brand hotel properties, such a Muji hotels and West Elm properties, the companies not only could connect with shoppers and grow loyalty in a personalized way, but could also create an entirely new type of retail flagship which boosts up global sales and brand recognition.
EHL Hospitality Business School
Communications Department
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