RETAILERS CREATE EXPERIENCES TO ATTRACT SHOPPERS IN AMAZON AGE
The latest retail tenant opening next month in the Galleria mall doesn’t sell luxury clothing, cutting-edge smartphones or fancy meals. In fact, it doesn’t sell any products at all.
Instead, the FOMO Factory sells an experience. Ticket holders navigate a maze of 17 themed rooms filled with colorful backdrops and props where they can reenact childhood memories, such as prom dances and summer camp, and, of course, take selfies to post on social media. The interactive space — designed to instill a “fear of missing out” and drum up internet buzz — is part of a new wave of experience-driven retailing that malls and department stores are embracing to lure shoppers in the age of Amazon.
As legacy retailers have struggled in recent years to attract consumers who are increasingly shopping online, malls and department stores are investing heavily in creating Instagram-friendly experiences to draw shoppers and keep them coming back. Through a combination of unique displays and interactive events, these so-called “experience stores” aim to create an in-store experience that can’t be rivaled by the convenience of the clicking buy.
“Malls used to be able to put together a bunch of stores and people would come,” said Rachel Youens, 35, who founded FOMO Factory in Austin last year. “Now, they need to create fresh reasons for people to come to the mall and talk about it with their friends.”
Brick-and-mortar retailers are looking to reinvent the in-store experience as online shopping has disrupted the retail landscape, leading to the closure of malls and department stores, said Venky Shankar, research director at Texas A&M University’s Center for Retailing Studies.
“You cannot have a static store anymore, Shankar said. “You have to continuously excite people and give them a reason to come into your store.”
Samsung earlier this year opened its Samsung Experience store at the Galleria, which serves as a high-tech playground where shoppers can experience the Korean technology giant’s lineup of smartphones, TVs and virtual-reality headsets. The company hosts in-store events, such as photo tours, that allow participants to use its latest smartphones to snap photos around the mall.
Kid-friendly events
Big-box retailers Walmart and Target have hosted kid-friendly events to attract families to shop in their stores. Over the holidays, Target hosted nearly 25,000 hours of in-store events nationally where kids could test out the hottest toys, meet their favorite characters from “Paw Patrol,” a Nickelodeon show, and participate in a Minecraft scavenger hunt.
Walmart’s Houston stores this year hosted several events, such as a “How to Train Your Dragon” virtual reality experience, Barbie’s 60th anniversary career roleplay and dress up event, and an iconic movie car show featuring a “Back to the Future” DeLorean and the “Jurassic Park” Ford Explorer.
Macy’s last month launched its Story experience shops in 36 department stores nationwide, including its Galleria and Memorial City malls. The roughly 1,500-square-foot store-within-astore concept sells $20 to $30 gift items, such as a rainbowcolored clutch and brightly colored water bottles, that are selected around an editorial theme that changes every two months. The inaugural theme, “Color” — which groups products by primary colors — will run through June 26, after which the store will be remodeled from floor to ceiling to reveal a new theme.
“Customers’ demands have changed,” said Adam Krovic, manager of Macy’s Memorial City Mall. “Customers want to be engaged and entertained when they shop. They’re looking for an experience.”
Extended engagement
To be sure, the concept of experiential retail is hardly new. Retailers have long offered experiences beyond shopping to keep patrons lingering in shops and increase the chances they will spend money.
Developer Gerald Hines famously added an ice rink to the Galleria mall in 1970 to drive foot traffic to ground-floor tenants. Over the years, malls across the country have installed a myriad of attractions, from indoor playgrounds, carousels and even roller coasters, as well as highend restaurants, green space, fitness centers and movie theaters.
The concept of experiential retailing started to gain traction after Nike launched its NikeTown concept stores in 1990, which showcased the Oregon-based
“It’s like escaping into a Pinterest board.” Rachel Youens, who founded the FOMO Factory
athletic giant’s brand and featured athletes as much as its products. Other concepts, such as Build-A-Bear Workshop and Distroller World — interactive toy shops where children can custom-design a personalized stuffed animal or doll — soon followed.
Apple’s stores, which let customers play with the California technology giant’s latest gadgets, have grown to become the most profitable experience stores nationally, averaging more than $5,000 in revenue per square foot. Apple stores are now being morphed into “Town Squares” with meeting spaces where kids can learn how to code and teachers can take classes on how to incorporate technology into the classroom.
Insta-galleries
The latest experience shops capitalize on the social media craze of immersive art exhibits, including the Museum of Ice Cream in San Francisco and Flower Vault in Houston’s Montrose neighborhood. These galleries feature Instagramfriendly exhibits, such as a pool filled with rainbow-colored sprinkles and flower walls, that have become the backdrop for many selfies.
Youens started FOMO Factory last year, aiming to transport Gen X and millennial adults back to their childhood through themed spaces, such as a birthday room that features a gigantic wooden birthday cake that can fit six people, a colorful cupcake wall and confetti on the floor. The pop-up shop, which transformed a dilapidated downtown Austin bar into an immersive art exhibit for five months, drew 17,000 visitors and more than 12,000 Instagram followers.
Youens, who worked on the fast-fashion retailer Forever 21’s website and mobile app, earlier this year signed a six-month lease for a former BBVA Compass office on the third floor of the Galleria mall to bring the pop-up shop to Houston from June 7 to Dec. 31. Tickets for a 90-minute journey through FOMO Factory cost $28 for adults, $23 for children. Simon did not disclose rents within the Galleria, but Youens said Simon was looking to activate the third floor of the mall, traditionally doctors’ offices and banks.
Chris Lane, director of marketing and business development for Indianapolis-based Simon Property Group, which owns and operates the Galleria mall, said bringing in experiential retailers such as FOMO helps Simon reach an audience it might otherwise struggle to attract.
“It keeps us fresh and relevant, especially to the 25- to 35-year-old woman who spends a lot of time online,” he said.
During a recent tour of FOMO Factory’s 6,100-square-foot space, Youens outlined her vision to transform the drab bank office into a colorful maze of art exhibits.
There’s a camp room, featuring a tent, canoe and binoculars, and a game room with wall-sized Scrabble and Twister boards. Down the hall, visitors can jump into a pool filled with 5,000 plastic balls. As they go through the rooms, visitors are handed candy necklaces and Kool-Aid juice boxes. Songs from the 1980s and ’90s from artists such as Paula Abdul and Will “Fresh Prince” Smith play from the speakers.
“It’s like escaping into a Pinterest board,” Youens said. “It’s a chance to step out of the every day and step into someplace beautiful.”