Bed Bath And Beyond What Retail Used To Be: The Rush To Be Experiential
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Between pop-up shops and programming, it gets tough to know when experiential is just a buzzword in retail, and when it really has an impact. From live music to back-of-house efficiencies, here's how Topgolf, The Container Store and Bed Bath & Beyond are innovating to keep consumers engaged.
Retailers are focusing more heavily on customer engagement as rapidly evolving demographics and technology are changing the retail game drastically.
“We’ve seen many retail ‘apocalypse’ headlines, but we also see an incredible opportunity with brick-and-mortar and online retail,” The Container Store Vice President of Real Estate Val Richardson said. “When we go through a major evolution like right now, there’s a natural cleansing of the market that creates an opportunity to reach new customers.”
Mature retailers like The Container Store, which was founded in 1978, and Bed Bath & Beyond, which was founded in 1971, have established customer bases — namely baby boomers. As younger generations get married, buy homes and have children later, wedding registries from Bed Bath & Beyond or storage solutions from the Container Store do not become relevant until later.
“We do expect millennials to eventually follow the path of former generations, but we are aware [of] and focused on how to be relevant to this younger customer who has different needs at different times,” Richardson said.
Bed Bath & Beyond also views the cleansing of the retail market as positive for its brand.
“If a department store goes out of business near us, we can pick up customers, but they also might have good employees we can add to our workforce,” Bed Bath & Beyond Managing Director of Real Estate Peter Russell said.
To maximize experience, both Bed Bath & Beyond and the Container Store have increased in-store programming.
“We’re doing a lot more in-store demonstrations with products where a [staffer] discusses the differences in coffee makers and we might have self-serve coffee where customers can taste 10 different kinds,” Russell said.
The retailer has stores in Brooklyn and Katy, Texas, where beverage departments offer more extensive samples such as olive oil kiosks. Its sister brand, Cost Plus World Market, offers wine samplings on weekends.
One way Bed Bath & Beyond has been able to offer more programming and staff is by combining back-of-house operations with sister concepts like Buy Buy Baby when retail space allows the stores to be side-by-side.
“We can have all individual storefronts, but back-of-house can share loading, processing and merchandising, meaning we need less personnel there,” Russell said. Bed Bath and Beyond and Buy Buy Baby have a combined back end at their Dallas location near the Galleria.
The Container Store has been working to give customer-facing employees more resources.
“We’re investing a lot in technology and giving that to our sales staff to make purchases as frictionless as possible,” Richardson said.
For a retailer like Topgolf that already sells more of an experience than a product, innovating comes in the form of experiences customers might not expect from that brand.
Topgolf has implemented live music in several of its locations like The Colony in Dallas.
“When you think of Topgolf you many not think of live music, but a number of our venues offer local live acts in the evening,” Topgolf International Chief Operating Officer Zach Shor said. “We’re building a dedicated live music venue in our Nashville location. We’re using that venue as a launch point.”
Topgolf also has a multifunctional space in its Las Vegas location called The Yard that is often used for music.
The retailer has also found success in Topgolf Tours, a tournament-style game where golfers can compete to win $50K.
All three tenants — Bed Bath & Beyond, The Container Store and Topgolf — agree that real estate is not the largest determining factor for success.
“We’re actually agnostic to [the] format of our retail space. Whether it’s in a mall, open-air center or freestanding footprint, we just want to reach customers in [the] most convenient place,” Richardson said.
Russell said density is the primary factor Bed Bath and Beyond uses when scouting sites. Shor said Topolf does not see a significant difference when locating in mixed-use developments or stand-alone.
“As long as location is good and accessible, we don’t see a huge difference in having retail co-tenancy,” Shor said. “We do see an uptick in happy hour traffic when we’re near office.”
Hear more from Shor, Richardson and Russell at Bisnow's Big South Retail Event in Dallas on Sept. 19.