High street business owners tapping into consumer demand for in-store experiences, hosting events and entertainment alongside their product offering, are increasing their annual turnover by an average 14 per cent, according to new research.
The study, from Barclaycard, assessed the value of the so-called “experience economy” to UK retailers, who are planning to double investment in this area over the next two years.
With consumers spending an extra 10.5 per cent on entertainment and experiences in 2017 so far, around a third of retailers have already looked to capitalise on the trend of in-store events such as classes, courses and exclusive sales previews.
Accommodating this additional revenue stream has seen high street business owners reduce their focus on other business priorities. Investment in the shop floor layout decreased by 51 per cent, increasing stock dropped by 41 per cent, and event investment in the ecommerce side of the business dropped by a third.
Commenting on the growing value of in-store experiences, George Allardice, Head of Strategy, Barclaycard Payment Solutions, said retailers were beginning to “reap the rewards”.
“Our research has found that shoppers increasingly want to stay in stores for longer, rather than head home with their purchases,” he explained.
Our Bricks & Clicks video series is helping retailers strike a balance between growing a brand online and establishing a physical presence
There were significant generational differences in the types of in-store experiences consumers wanted to see. The study found that 18 to 24 year olds were twice as likely to want to meet celebrities in their favourite shops or attend language classes as the national average, and even claimed after-hours events would encourage them to choose one retailer over another.
“There are opportunities across the board for shops of all shapes and sizes to capitalise on this and draw shoppers in with engaging experiences,” Allardice added.
Meanwhile, James Backhouse, marketing director at cycling chain Evans Cycles, explained how the company had managed to think creatively and offer customers something new.
“We’ve piloted hosting organised bike ride events at our stores this year, with great success,” he said.
“The ‘RIDE IT’ routes start and finish at the store, and inside we host tea and coffees and give the riders a £5 voucher to spend after the ride. Over half of participants spend the voucher there and then, with a healthy average spend – showing the power that events like these have to bring people into our shops and the Evans Cycles community.
“The events are also helping us attract new audiences and build loyalty amongst our customers: nearly a third of attendees hadn’t been on an organised ride before, while 96 per cent say they would attend another event with us. In fact, the pilot has been so successful that we’re planning to double the number of stores hosting RIDE IT events next year.”
Read more from the Business Advice High Streets Initiative:
- Five tips to get your ecommerce site Black Friday ready
- Consumers spend over £12 each day on luxury items like brunch or magazines
- How high street independents can combat the three biggest retail challenges of 2018
Sign up to our newsletter to get the latest from Business Advice.