Retailers Embrace Hospitality as a Real Estate Strategy
Last Updated on May 18, 2023 by Morgan Beard
In the pursuit of creating immersive shopping experiences, retailers embrace hospitality as a real estate strategy. They are reimagining their physical spaces to go beyond the traditional concept of a store. They are incorporating elements that engage multiple senses, aiming to captivate customers from the moment they step foot inside.
So, retailers are taking a page out of the hotel, hospitality and luxury restaurant playbook. Hospitality in retail is a strategy that embodies personalization, community, customer service, and elevated experience as a means to leave the customer with an outstanding experience. Think cozy seating areas with comfortable furniture and ambient lighting provide shoppers with a relaxing environment to browse and try out products. In addition, the integration of cafes and food vendors within stores not only offers convenience but also creates a social atmosphere where customers can gather, unwind, and enjoy refreshments.
A Shift in Shoppers Expectations
The rapid growth of e-commerce has brought about a significant shift in shoppers expectations when it comes to traditional brick-and-mortar retail. With the convenience of online shopping, consumers have become accustomed to a vast array of choices, personalized recommendations, and seamless purchasing experiences. As a result, they now expect more from physical stores than mere transactional interactions. They seek engaging experiences that go beyond the act of buying a product. This shift in expectations has prompted retailers to reevaluate their strategies and find innovative ways to differentiate themselves in the market.
In response to the changing landscape, retailers recognize the need to provide engaging experiences to attract and retain customers. Shoppers want to be inspired, entertained, and delighted during their in-store brick and mortar journey. By offering immersive experiences, retailers can create a connection with their customers, fostering a sense of loyalty and driving repeat visits. Engaging experiences can include interactive displays, hands-on demonstrations, workshops, live events, and personalized services. These elements not only enhance the overall shopping experience but also create memorable moments that customers are more likely to share with others.
Retailers Embrace Hospitality Mindset
The hospitality industry wrote the playbook for designing a superb customer experience. Resorts, hotels, wineries, fine dining and many other hospitality environments created a space that prioritizes the guest experience. Coming out of Covid there is an increased focus in the retail sector on delivering personalized services to meet consumer expectations of memorable and unique experiences with retail brands.
So, how can retailers put hospitality at the center of their store experience? Embracing a hospitality mindset in retail entails transforming stores into immersive environments that go beyond traditional shopping spaces. By creating an inviting and experiential atmosphere, retailers can enhance customer engagement and satisfaction. The importance of this transformation lies in the power to captivate customers and make their shopping journey a memorable and enjoyable one. Immersive environments foster emotional connections with the brand, ultimately leading to increased customer loyalty and advocacy.
Several retailers have successfully implemented immersive strategies to elevate the customer experience. One notable example is Apple stores. Their stores feature sleek and modern designs, with open spaces for customers to explore and interact with the latest products. Additionally, Apple stores often host workshops and events to educate and engage customers. Another example is the athletic apparel retailer Lululemon, which incorporates yoga studios and workout spaces within their stores. Sports retailer Dicks Sporting Goods is rolling out an experiential store model called House of Sport — in which shoppers can take products for a spin before buying. Imagine shooting a few hoops before buying a basketball or swinging a new driver before dropping a few hundred bucks on a new golf club. Occupier customer Bluestone Lane Coffee is a fierce believer in cafes as a community pillar, “brands who drive human connection and make you feel part of the community, like a local [are the future],” says founder Nick Stone.
This hospitality model allows customers to experience the brand’s products in action and fosters a community around their brand. These implementations have had a significant impact on customer experience, as they create a unique and memorable environment that goes beyond traditional retail interactions, ultimately driving customer loyalty and brand awareness. Retailers embracing hospitality as a community oriented pillar for their brand and business will thrive in this wave of retail evolution.
Personalized Customer Service
Personalized customer service plays a crucial role in the hospitality-driven retail strategy. It involves tailoring the shopping experience to meet the unique needs and preferences of individual customers. By understanding their customers on a deeper level, retailers can create a more meaningful and personalized engagement, fostering loyalty and customer satisfaction
Retailers are investing in training their staff to provide exceptional customer experiences. This includes equipping employees with the knowledge and skills to understand customer preferences, anticipate their needs, and provide personalized recommendations. Imagine going into a shop for a new tailored suit and getting personalized suggestions, custom measurements taken, and having your order delivered straight to your doorstep. Well that is exactly what Bonobos and Indochino are doing. Or say you’re shopping for sports equipment at House of Sport, and your sales associate is a professional coach giving you three-pointer shooting tips. These types of activities are being purpose built into the retail real estate spaces and they are creating incredibly memorable shopping experiences.
The hospitality mindset is about empowering retail staff to curate a personalized and elevated shopping experience. So, staff members are trained to actively listen to customers, ask relevant questions, and offer tailored solutions. They are also encouraged to build rapport and establish genuine connections with customers, creating a sense of trust and loyalty. Retailers recognize that well-trained and empowered staff members are instrumental in delivering personalized customer service and elevating the overall shopping experience.
Real Estate Space as a Hospitality Channel
Real estate space has emerged as a significant channel for retailers to embrace hospitality and enhance their customer experiences. Traditionally, real estate was primarily viewed as a physical location for displaying and selling products. However, with the shift towards experiential retail, real estate now serves as a platform to create immersive environments and engage customers on a deeper level. Retailers are strategically utilizing their physical spaces to offer a range of hospitality services, transforming their stores into destinations where customers can not only shop but also relax, socialize, and indulge in experiences.
By leveraging real estate as a hospitality channel, retailers can differentiate themselves from online competitors and provide a unique value proposition that cannot be replicated in the digital realm. This approach maximizes the potential of physical spaces, allowing retailers to foster emotional connections with customers, drive foot traffic, and ultimately, create a memorable and compelling brand experience.
It’s an exciting time to be a retailer and experiential, hospitality driven retail storefronts are going to find themselves on top. Occupier is passionate about empowering retail tenants to take control of their real estate portfolio and hit expansion goals with a modern and intuitive lease administration technology. Schedule a demo with our in-house lease management experts!
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