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Increasing Interest in Experiential Retail
While some types of brick-and-mortar retail have been struggling to compete with e-commerce, other types of retail, especially “experiential retail,” have been flourishing. Experiential retail favors immersive, interactive, and often, technology-enhanced experiences for consumers (Ruff, 2019). The most familiar “experiential retail” environment is likely the Apple Store. Apple Stores emphasize the “experience” with the physical environment replicating the sleekness of its product. Since the first Apple Store opened in 2001, other retailers have seen the value of this retail model, which typically requires a smaller footprint, and are gradually using it to replace the traditional large footprint big-box experience.
Experience-driven retail appeals to consumers who strongly favor in-store shopping experiences to online shopping. They prefer a unique experience that differentiates their spending and they are willing to pay 32% more (on average) for that experience (Synchrony Finance, 2016). With the introduction of AVs, the need for parking will likely be reduced, and delivery costs may go down, further exacerbating these retail trends. Auto-oriented strip malls and big-box stores may face more shrinkage as consumers opt to travel to experiential retail but order household goods and other items online. According to one study, customer experience will overtake price and product as the key brand differentiator by 2020 and 86% of consumers will pay more for a better experience (Walker Consultants, 2013).
The above is an excerpt from Chapter 2 of Multilevel Impacts of Emerging Technologies on City Form and Development (2020).