“Experiences are taking prominence over products”, retailers warned

The lessons of the experience economy still need to be applied by retailers if they want to continue to be successful as consumers’ expectations change.

A report based on a survey of more than 2,000 consumers found there is a move from the “intrinsic value embedded in the product/service towards the experience”.

Four factors determining a customer’s shopping experience have been identified – environment, education, escapism and entertainment – that will influence shoppers’ loyalties.

Richard Lim, chief executive at Retail Economics, said: “A behavioural revolution is taking place through a transformational shift in what people value most — experiences.

“Evolutionary processes have guided economic value from commodities, to goods, to services and in this new paradigm, experiences are taking prominence over products.”

Lim describes the “retail experience economy model” as requiring retailers to “engineer seamless experiences that envelope the consumer in beautiful retail environments that entertain, provide escapism and relevant education”.

The research found that nearly one-quarter of people said they would willingly pay more for the same product if it meant they would receive a meaningful experience when purchasing it, while 43% said they are likely to spend more money in the future with a retailer who offered a meaningful shopping experience in-store.

Matthew Lewis, partner at Squire Patton Boggs

“As the Experience Economy evolves, retailers must embrace consumers’ demands for the shopping experience to become more integrated and focused on their lifestyles,” added Matthew Lewis, head of the Retail Industry Group at Squire Patton Boggs, which supported the research.

“Technology will continue to drive retail progress and shape the way in which consumers interact with retailers in the future, with the Internet of Things, 3D printing and artificial intelligence promising to deliver a new wave of innovation that will change the retail experience.

“The challenge for retailers is to predict and harness these technological developments to differentiate their offering and deliver a seamless shopping experience to future generations of consumers.”