In-Store Events Gone Wild!
By Tom Ryan
British fashion mecca Topshop hosts weekly in-store DJ sets, free
tea and cake stands, roller-skating parties and photo booths that automatically
load pictures to its Facebook page. The store is one of many showcasing in-store
bashes for their customers to drive traffic and build awareness.
At Saks, 25
new marketing personal were hired last year to help tailor in-store experiences
by location, according to an article in The Wall Street
Journal. Cocktail-infused designer meet-and-greets and auctions to benefit
local charities are regularly held in stores. Many stores also have “community
rooms” for customers to throw private birthday parties or hold book club
meetings.
“Many of our customers already feel that Saks is a home away from
home,” Kimberly
Grabel, Saks’s senior vice president of marketing, told the Journal. “We
need to give customers a reason to come in to the store.”
John Varvatos’
boutique on New York’s Bowery, which replaced the legendary punk-rock club
CBGB’s in 2008, offers free rock concerts and drinks the first Thursday of
every month.
“It’s not enough just to get traffic to your stores. You need to make
shoppers excited, happy and leave feeling that they want to come back,” said
Mr. Varvatos.
The article claims that purchases increase during in-store shindigs,
although it didn’t explore whether they justify the added costs.
Other
stores pushing the envelope on in-store events:
- The Dressing Room on the Lower East Side in Manhattan features a boutique
upstairs, a vintage-clothing exchange downstairs, and a full bar. - Elsa in New York’s East Village is a tailor shop by day, bar by night.
- Saturday’s, in New York’s SoHo district, is a surf shop that serves coffee
and beer in a back garden. - Catherine Malandrino added a café in front of its new Los Angeles
boutique. - French boutique agnès b.’s 15,000-square-foot concept store in Hong
Kong includes a florist, restaurant and chocolate counter.
 “The [retail] industry’s been flipped on its head,” Robin Lewis,
a freelance retail consultant and the former executive editor of Women’s Wear
Daily, told the Journal. “The store used to be at the
center. Now stores have to go to the consumers. For stores to get them, they
must give them an experience, a destination.”
Discussion Questions: Is the rash of in-store bashes a clever differentiater/traffic
driving strategy or a bit far-fetched? What are the pros and cons of such
in-store events?
Using this type of event to differentiate may work as long as it does not get adopted by many of the retailers in the competitive set. Once it does, it loses its uniqueness.
I found two interesting points in the article. First, is the lack of economic rationalization for the events. This may be because the hard numbers don’t support the activities but the retailers feel the soft numbers generated by the buzz do. Second is that the majority of the events involved alcohol. I think the allure of this type of marketing with dissipate very quickly should a guest/customer over imbibe and some unfortunate incident follow.
The rash of in-store bashes and activities are good for customers and for the stores. They are a way to help retailers differentiate themselves. They generate sales and word of mouth.
I would couple these events with Twitter contests and special badges and awards on Gowalla and Foursquare to spread the word and reward participants.
Who said retail needs to be staid in order to be successful?
Excuse me, Saks customers already feel Saks is their home away from home? In what universe? Book clubs meeting at Saks? Doubt it. Topshop does a great job for their target market. The photobooth uploading to Facebook–brilliant.
Events don’t sell merch–nor does CMO speak–salespeople do. Unless retailers get that, we’ve wasted the power to change that the recession gifted us.
Events/activities must be tied to the product. Apparel retailers should not just throw parties, but also have designers or even typical employees giving fashion shows/coordinates suggestions/using shoppers as models/of clothing that can be easily purchased while the music and cake are flowing. Give the shoppers a chance to buy during all the excitement, and they will. Give a cooking class on the sales floor in a supermarket in front of the seafood counter, and they will buy the product to try the recipe. This is what will drive the metrics. It CAN be done.
Events are great to attract customers and build excitement but that just gets them in the door. What happens after that is up to merchant. Have they hired great associates and is the store staffed appropriately to handle the increased traffic, do they have a strategy that moves the customer through the store and have they equipped their associates with the knowledge and tools to service and sell? And what about monitoring and measuring the effectiveness of their strategies and associates?
At the end of the day it’s all about selling and if they don’t have a well planned and executed in-store strategy, these events that draw crowds turn into nothing more than costly theater.
In a world that gets wilder each decade and each generation, it’s not surprising to see many retailers try to go with the faster flow … and, many think, the faster the better.
“Retailing in the Fast Lane” can please the contemporary emotions and enrich the developing souls. And if it can increase sales and profits in that paradigm, more power to it. But from my seat by the side of that untraveled road, the effort appears more prurient than profitable.
These events can work great to make the shopping trip more of an experience, and one that you want to share with your friends. But the retailer must be realistic about the experience, and about their customer. Do people really believe that Saks is their home away from home? I doubt it. And if the retailer believes this to be the case, and builds their events around this misconception, the events will fail miserably.
On the other hand, if the retailer remains true to itself, which Topshop is doing, and really understands its customers, which Topshop does, the events can be great. The retailers will always need to switch the events a bit, to keep them fresh and interesting, but they should prove beneficial to the business.
As for ROI, well the focus should be more on ROE, Return on Engagement. The more you engage with your customer, the more they will remain loyal, and look to return to that retailer for their purchase experience.
This strategy can work with the watch-outs discussed by the panelists. The key may be taken from the WSJ article–an opportunity to make shopping fun again.
Shopper behavior has changed, with fewer trips to the store and malls having a major impact everywhere. Discounts and promotions may have kept the business afloat, but growth opportunities are severely restricted in this model. Bringing shoppers back, getting to know them again, is a first step. The rest is about the right products, great customer service and a long term strategy to build loyalty.
Events helped a lot of independent retailers weather the recession. Some even grew their sales during this time.
Why wouldn’t you do anything that drives your customer back into the store? You can either run a sale, or host an event. I’ll take the one that engages the customer and delivers higher margin any time.
I don’t see Saks or most retailers becoming a third place like a Starbucks, but there’s no doubt any retailer can use events to create additional visits.
Book stores, in particular Barnes & Noble and Border’s have been having in-store book readings and signings for years. There have been some successes in doing in-store events. Sales on the night of the event should not be the main focus. Having those attending the event want to come back and purchase something and a positive word of mouth talk should be the objective. The approach should be similar to “Pay it Forward.”
This is event-based marketing, built around unique experiences, and I think we’re going to see a lot more of it going forward. To the degree that stores can create unique, relevant experiences that appeal directly to their target market, they build a loyalty far different than traditional loyalty programs, and in a way that protects sustainable margins.
To Bob Phibbs’ point above, I agree that the experience has to encompass far more than just the event. The totality of the experience must be all in sync, including passionate, engaged salespeople and compelling merchandise.
The great strength of event-based marketing is that it builds on the foundation of the existing customer base, and leverages those customers to draw in new customers by creating experiences worth telling your friends about. It’s about buzz-building.
The challenge for many national retailers is that they’ve created such sterile, cookie-cutter in-store experiences, and built their entire marketing thrust around being the low-priced outlet, that event-based marketing almost requires a change in the business model. That’s why the greatest potential for event-based marketing is with specialty retailers, as well as independent retailers.
In-store events definitely add value and differentiation from your competitors. I think they will be most effective in sales if they complement the store’s core business. Wine tastings and cooking demonstrations at grocery stores, workshops on installing tile at home improvement stores, pet trainers at pet stores. Use the existing expertise and knowledge base of your employees to educate & entertain consumers, and you will give them an experience that will build loyalty and encourage sales.
Time will tell if the in-store events have staying power, at least in the way they are currently being treated. Hhowever, what will be most important is that retailers stay within themselves and not make the mistake of taking themselves too seriously in their approaches.
The retailer that presents events for the sole purpose of drawing customers into the store is missing the point of the event. The event is a marketing/advertising tool. It must be tightly targeted to the desired customer base. The event must appropriately communicate the excitement or sophistication, upscale or downscale positioning. Events can be used to bring in a younger demographic if the customer base has matured.
But, more than anything else the purpose of the event must be to align a customer and the store. It doesn’t matter if the customer buys during the event, what does matter is that the customer thinks of the retailer top of mind when the buying decision is ultimately made. A one-up event that generates a one-up sale is a failure.
A home away from home? Gimme a break. Does any marketing person seriously believe that is a good objective for a retailer? Having fun and encouraging people to both spend and come back for more obviously makes sense but let’s not get toooo silly.
By the by – the branch of “British fashion mecca Topshop” (a description I find somewhat questionable based on the members of the appropriate generation with whom I am acquainted) – is in NYC. I would be interested – and surprised – to know if it’s being done over here and of course the answer to the unanswered question about whether the cost is covered by extra sales.
And finally – badges as rewards? Gimme another break, puhleeze.
How about thinking about this in the context of grocery shopping? I have said for years, “food should be more like fashion.” I am not talking about Gucci hamburgers and Prada french fries. It is about creating excitement and engagement and making the in-store experience more enjoyable. The tactics deployed in the article may or may not have the desired impact or outcome but at least they are trying. Ask yourself, how much has the grocery shopping “trip” changed in the last decade? Or two?? Or more???
A retailer runs the risk of doing too much and therefore becoming more of a nuisance. Too much chatter and “excitement” becomes boring after awhile. Then what? I have too many customers wanting to be sure we don’t mail them too much, do too much to get them back in, stick to improving the events they already like. Doing something above the ordinary is great if it is manageable, reaches the right customer and is generating a return at the end of the day.