Experiential Retail: eCommerce Innovators Are Cashing In
The “experience economy”, was a term coined to describe experience-based products and businesses. VendHQ defines it slightly more narrowly as “where physical retail spaces offer additional experiences beyond browsing or buying products.” What is the trend towards experiential shopping and consumer experiences? Why does it matter? And how do you cash-in?
Tenant Leasing Group works with retailers, eCommerce start-ups and premium global brands to optimise their warehouse, retail, and industrial property arrangements. It’s not about having either traditional bricks-and-mortar retail or a slick eCommerce operation – it’s about how to balance both.
Just because someone can, technically, buy a pair of sneakers online, or attend a yoga course via livestream, doesn’t mean they wouldn’t prefer to go to the store or studio in-person. The ‘physicality’ of in-situ experiences and face-to-face interactions are increasingly seen as having some inherent virtue. Customers still value bricks and mortar retail, especially where this is integrated into an omnichannel system. This is something which the COVID-19 lockdowns made clear.
The experience economy extends to physically attending an event, festival or concert (rather than watching remotely or afterwards), going to a store to try on a pair of sneakers or a t-shirt (rather than just browsing on your phone), or travelling to the supermarket to buy your groceries (rather than using click-and-collect or home-delivery).
Whether it’s the well-documented return to the office, the push for reopening hospitality, going shopping again, or eating-out – it’s clear that being places in-person is still important to employees, consumers and businesses. Forbes spoke about this with respect to retail in an article last year: “physical stores are poised to make a big comeback: in-store retail is still the dominant retail channel, and it’s still very much part of the customer journey.”
The converse is also true: just because someone can go in-store, doesn’t mean it might not be more convenient for them to shop online. Similarly, there are obvious benefits in terms of convenience in working remotely or attending meetings virtually; ordering food or groceries using delivery services; or purchasing apparel or household items online.
In-person retail, recreation and office experiences clearly provide a huge amount of value to businesses – as do their virtual and online equivalents: 86% of buyers would pay a premium for a good experience. The trick is working out what balance is required between shop retail and distribution centres, or between the expansion of delivery capabilities and the opening of new local supermarkets.
Finding a warehouse to lease in the right location, renting prime retail space for your flagship store,, and finding industrial & logistics sites to optimise your fulfilment process – these are some of the strategic steps retailers, eCommerce and other businesses must take to improve customer experience.
Tenant Leasing Group are the experts in negotiating the best deals on warehouse leases, shop rentals and industrial sites across Australia and New Zealand. If you need advice or help negotiating a lease for warehouse, retail, industrial & logistics or other commercial property – get in touch!
Here are some example of the experience economy in action, and how companies find the right properties to make it happen.
Retailers should make the most of having customers in a physical space. Culture Kings stores are a fantastic example of a brand taking advantage of their shopping venues to frequently host events with music, celebrities and exclusive giveaways. Recently at a global retail summit, Simon Beard, Founder & CEO of Culture Kings, said these elements combine to create the memorable, unique experience for their customers.
This is value-add bricks and mortar shopping. Emotive, sensory brand experiences in-store create brand loyalty that can then be “monetised online for years to come.”
Tenant Leasing Group is the national tenant representative of Culture Kings: we find them prime retail property sites in the right locations, and negotiate favourable leases for ‘flagship’ stores (like those in Pacific Fair, Brisbane, or Melbourne’s CBD).
This experiential retail offering is supported by an eCommerce & logistics property portfolio – we source warehouses that function as distribution centres, screen-printing facilities and other key parts of the Culture Kings supply chain and fulfilment network. With 70% of the brand’s revenue coming from online sales, it makes sense that we are continuing to expand their warehouse capacity (see our current brief for a 30,000sqm warehouse near Brisbane, Queensland).
In-person, social recreation
Bouldering, which is booming in Australia thanks to indoor climbing gyms such as BlocHaus Bouldering, is one such wellbeing & recreation business. Tenant Leasing Group have been supporting BlocHaus with their national rollout – most recently a 1,600sqm prime location in Canberra. This is just one case study of our work with small-medium size businesses that are growing and need expertise to sort out renting industrial & logistics property, leasing a warehouse or finding prime retail floorspace.
Do you have retail or industrial & logistics property requirements? Call us for a free consultation.
Large format retail showrooms
Display centres for furniture & homeware goods, such as those provided by Brosa, allow customers to see what pieces look like in a relevant physical space – something that cannot be achieved in the same way online.
Winning – Australia’s leading supplier of premium kitchen and laundry appliances – also have numerous showrooms around Australia, and complement these with virtual showroom capabilities. Having these physical locations is still key to give your customers a high-value experience.
Specialised eCommerce workplaces with relevant facilities
In-office working – whether single-business, shared or coworking spaces – provides benefits to companies and employees alike – in the form of productivity, social interaction and company culture. CLIK Collective, who develop offices and coworking spaces built around the needs of an ecommerce community, have taken this idea to the next level: hubs that are specialised for eCommerce businesses.
CLIK Collective locations offer individual secure warehouse spaces, dedicated private offices, meeting rooms, kitchen & amenities and facilities built specifically for eCommerce (eg loading docks, ‘goods out cages’, photography studios, shipping stations & more) as well as a community events, networking and advantageous partnership offerings with the likes of Australia Post. They know that having the right office and logistics facilities is essential, especially for fast-growing eCommerce start-ups.
Distribution centres and fulfilment hubs
In order to provide high quality products at affordable prices, eCommerce meal delivery services like HelloFresh and Dinnerly require streamlined industrial property arrangements. Well-located, well-equipped distribution centres and fulfilment hubs enable them to keep overheads low.
The same can be said for ecommerce pet shop retailer Pet Circle. In order to secure a prime lease for a 25,000sqm industrial warehouse in Sydney, industrial & logistics specialist partners Hunterford Property Group and Tenant Leasing Group worked together. We delivered a site that matched the client’s brief – providing a centralised hub for their fulfilment logistics, including packing, delivery and returns.
Koala – Australia’s most innovative mattress, homeware & furniture maker – offer another interesting property blueprint to follow. When their showrooms closed during the COVID-19 outbreak, they introduced a free 120-day trial of their mattresses, enabling customers to try the mattress for free at home. This meant a high-quality customer experience without the significant overheads of retail or large format outlets. And money saved on their bricks and mortar could be diverted into product development and optimizing their fulfilment & shipping processes.
Casper, a US-based company, get around the product-testing issue a different way: experiential retail stores where consumers can book Nap Appointments to properly test out their mattresses, sheets, and pillows. Different leasing arrangements work for different businesses.
Creating meaningful interactions and brand experiences is the bread and butter of today’s economy. Tenant Leasing Group specialise in retail, eCommerce and industrial & logistics property, and how to get the leases you need in order to bring those experiences to life.
If you need advice on how to go about renting a warehouse, negotiating a lease with a landlord for a retail store, or any other commercial leasing enquiry – get in touch.
Founder & Principal, Tenant Leasing Group (TLG)
Phil Reichelt is a property advisor & tenant representative with 25+ years experience in Australia and New Zealand.
He specialises in multi-site retail, mixed-use office & industrial, and warehouse leases of up to 5,000sqm.
Phil negotiates competitive rentals, incentives, and favourable lease terms for retailers, eCommerce, financial services, legal firms, and other commercial occupiers.