Experiential retail has long been touted as one tool to help save high streets that have suffered from a decade of decline in their share of retail sales as online sales have grown. And, whilst Covid-19 and national lockdowns appear to have presented a major setback for this trend in retail strategy, the pandemic has in fact re-asserted its importance for offline retailers.

Covid-19 has had a significant impact on broad consumer habits: greater numbers of people – even those that would have relied on traditional, physical outlets to buy goods prior to the crisis – have taken their custom online and will likely increasingly use these channels in future. In order to reclaim market share and remain competitive with online channels, offline retailers will have to focus on what they uniquely can offer consumers – a positive and unique in-store experience.


Russell Pointon, Director of Consumer for Edison Group

However, with many large high-street names struggling with profitability, the fact is that a growing number of outlets simply may not be able to afford to focus on anything other than their short-term survival at the moment. Consequently, although experiential retail does seem to be the way forward for the sector, it may be less important until Covid-19 is well behind us.

The idea behind experiential retail

Experiential retail is based on the idea that, due to the rise of ecommerce, the decision to shop at a physical store is no longer driven by necessity. Retailers with physical outlets can powerfully influence customers by offering them an unforgettable brand-specific experience, and creating a sense of excitement around discovering it in-store.

As a result, rather than prioritising sales directly, focusing on delivering stand-out customer experience should generate more sales and, in so doing, give high-street locations a new purpose. Indeed, the Boston Consulting Group found that brands which concentrated on memorably engaging customers, and tailoring brand experience according to personal preferences, saw revenues increase by 6-10% – nearly three times more than brands that do not do so.

Covid-19 has shifted the status quo

However, as we head further into the third national lockdown of the year, it has become increasingly clear that Covid-19 has transformed the habits of some consumers; although, whether that is permanently so remains to be seen. Even shoppers who previously only bought in-store, for example older members of society, now shop online. Leaving the house and interacting with the general public introduces serious, tangible health risks for customers, and the same applies to those with underlying health conditions.

Consequently, the assumption that shopping in-store can be primarily driven by the excitement at experiencing something new has diminished to some extent. Safety-conscious consumers are minimising interactions with strangers and tend to only venture out for goods that aren’t easily acquired online – the speed and efficiency of shopping are currently more important concerns for them. 

However, judging by the significant increases in footfall to highstreets and shopping malls in the first few weeks of December 2020, despite a growing resurgence in cases of Covid-19, it is unlikely that these preferences will hold the same sway in the medium- to long-term, once the virus is firmly behind us. Footfall in England had increased 85.2% week-on-week by 2 December, and it leapt another 19.5% the week after, leaving half-monthly footfall 30% lower than that observed in 2019.

Experiential can help Covid-impacted offline retailers

With significant declines in revenue and higher levels of stock to boot, the profitability of non-essential retailers that rely solely on physical channels has been substantially impacted. In addition, many have invested heavily into making their locations compliant with social-distancing requirements. As a result, some retail brands may not have sufficient capital, in the very short term, to develop new ways in which customers interact with their brand, especially if there is no guarantee that consumers would visit stores instead of using online platforms.

Nonetheless, once any immediate concerns about financial viability have passed, experiential retail will likely take centre stage again for Covid-surviving offline retailers; one way in which they can compete with their online rivals, and entice consumers to return to physical outlets, is by ensuring customers value the in-store experience they receive more than the speed and efficiency offered by online shopping – their longer-term survival depends on it. 

In store experience will continue to be essential

Whilst it is likely that Covid-19 has permanently affected some consumer habits, and accelerated the switch of some offline retail to online, physical retail will continue to be important to many consumers, and focusing on customer experience will be crucial to attracting and retaining them. It is very unlikely – almost inconceivable – that online will become the be-all and end-all for every consumer. There will continue to be lots of physical retail for many years to come, but perhaps with fewer and better-placed players. 

The successful companies have been, and will continue to be, those that invest in both offline and online channels, or are uniquely and innovatively successful in just one or the other. For offline, this means ensuring that shopping is an enjoyable or social event will continue to be a very important weapon in the battle to attract customers.