Research Briefing: How brands are redefining the in-store retail experience

As prices for goods continue to rise, luxury consumers are becoming hyper critical about where to spend their disposable income. Some are shifting their priorities away from spending on physical products in favor of spending on experiences like travel and wellness offerings. In fact, according to McKinsey’s State of Luxury report, about 80% of high net-worth individuals expect to shift part of their spend to experiential luxury and wellness and away from luxury goods. 

Customers also have higher expectations for luxury brands in terms of both product innovations and in-store experiences, according to McKinsey’s analysis. And because consumers are resistant to price increases, brands are looking for more ways to increase their revenue and order volume.

“We have surveyed consumers globally, there is a very limited propensity to accept price hikes. That’s particularly because there is a perception by consumers that neither the quality of the products nor the innovation in the products has kept up with the promise linked to the price increases,” said Gemma D’Auria, global leader of apparel, fashion and luxury at McKinsey. “But if prices are not going to increase, any growth will have to come from volume, right? Given that we expect the market to grow 1-3% in the next couple of years, it’s going to be a very interesting game of differentiation: How do you differentiate in order to gain share against other brands, particularly when the consumer propensity to buy luxury goods has been impacted negatively over the last year?”

One way brands are differentiating their offerings and aiming to bulk-up consumers’ shopping carts, is by revamping their brick-and-mortar retail experiences. Some luxury brands have begun offering in-store product demonstrations and customization of purchases, while other brands are introducing new in-store technologies to provide personalized shopping experiences. 

Home appliance maker Dyson has long offered shoppers the opportunity to test its products in-store at its “Dyson Demo” stores. Dyson sells some of the most expensive hair styling tools on the market — its “Airwrap multi-styler” retails for $599.99 on the Dyson site —  and allowing customers to interact with the expensive tool and to test the product’s quality for themselves can be important to help drive purchases. 

Aside from offering live product demonstrations, the Dyson stores also provide shoppers with purchase options that aren’t available online, like wax-sealed gift wrapping or tool case customization. These exclusive in-store offerings can give consumers the feeling of belonging to a “secret club”  with unique access to the brand and to their favorite products, according to Glossy’s analysis — and may ultimately build a stronger rapport with brand-loyal customers. 

Richemont-owned watch and jewellery brand Piaget has also been leaning on in-store experiences to generate sales, such as workshops highlighting the artistry that goes into producing its luxury goods. “We try and make people understand what the craftsmanship in our work is about,” explained Benjamin Comar, CEO of Piaget. “We do a lot of workshops in-store about stone selection, stone-setting, gold and drawing.” 

“Sometimes, when you put products in advertising, we can lose the value of what’s behind them, Comar added. “We want to reinstate that. We also do workshop visits and give freedom to our local markets to create experiences that gather people together and create good, honest moments.”

Some brands outside of the luxury market, like denim apparel company Levi’s, are also hoping to woo consumers with in-store offerings that draw on online resources to create an omnichannel shopping experience. In September 2024, Levi’s launched its “BackPocket” app for store staff members which allows them to access real-time data about store inventory and provides product recommendations based on a shopper’s purchase history. “BackPocket is one example of how we’re bridging the gap between online and in-store,” said Nicole Veach, global omnichannel product manager and lead on BackPocket app. “When a shopper walks into a store, this app ensures our fans don’t have to ‘start over’ on their shopping journey and allows our stylists to deliver a personalized interaction.”

Similarly, big-box retailer Lowe’s is drawing on technology to offer consumers an in-store shopping experience that it hopes will drive sales both online and in-store . In June 2024, Lowe’s launched its Lowe’s Style Studio, an augmented and virtual reality tool built for Apple Vision which uses spatial computing to help customers visualize and design a kitchen. Customers meet in-store with a Lowe’s staff member and use the tool to mock-up kitchen designs with materials, fixtures and appliances available for sale on Lowes.com. Shoppers can download their product selections and kitchen mock-ups to share with contractors, and ultimately (Lowe’s hopes) make their purchases from Lowe’s.