The Experiential Edge: How Brands Are Harnessing the Power of Curated, Community-Building Brick-and-Mortar Experiences Via Technology

What do athletic apparel brand lululemon, beauty brands Glossier and Sephora, outdoor equipment company REI, and the restaurant brand Eataly have in common? They’re all investing in experiences to reshape the future of retail.

Even as retailers pump more into digital experiences and technology, the latest consumer trends suggest that instead of devaluing or downplaying in-store experiences and community cultivation, they should be doubling down on them to connect with consumers who increasingly value authenticity and deeper, more local brand experiences.

Appealing to all a consumer’s senses, tastes and preferences means maximizing an asset that brick-and-mortar retailers have and their purely online competitors don’t: physical real estate. As much as consumers appreciate the convenience of the online shopping experience, brick-and-mortar retailers have a golden opportunity to provide social experiences that enable consumers to connect with a brand on a deeper, more personal level. Sales originating at physical retail locations are expected to account for about 80 percent of global retail sales in 2025, according to Forrester, led by Generation Z, 97 percent of whom say they shop at brick-and-mortar stores, according to survey findings from ICSC.

How, then, are retailers to capitalize on these consumer preferences, and in the process leverage the built-in advantage that their physical stores provide? And what role can technology and data play in helping retailers shape their physical spaces and curate the experiences that occur there? Here are three building blocks for reimagining and reshaping the future of physical retail:

1. Transform stores into community hubs.

As Incisiv notes in a recent retail market report, retailers are finding success by evolving stores “from single-purpose retail points into multifunction market hubs that serve local customer needs efficiently while maximizing every square foot of investment.” Think flow and flexibility, with highly adaptive spaces that can seamlessly flex between shopping, fulfillment, and product engagement, that are capable of supporting group and individual interactions, including workshops, events, concierge-level services, and immersive experiences that transcend traditional customer service. How about food retailers that combine chef-led cooking demonstrations with easy meal prep, shopping, and restaurant-quality dinners at a consumer’s fingertips? Or fashion brands that make shopping a destination experience with personal shoppers, integrated runway shows, and early access to new collections?

In these settings, tech tools like smart mirrors can extend the physical shopping experience by allowing a consumer to feel the fabric, try on the style, but visualize other colors or accessories that would complete the look — an endless aisle of options beyond in-store inventory. Behind the scenes, meanwhile, real-time visibility into inventory, logistics and supply chain can position retailers to monetize in-store experiences when customers are ready to purchase.

2. Build customer-centered, curated experience ecosystems.

A sporting goods retailer could let shoppers test golf clubs on an in-store simulator, with a golf pro also on-hand to offer coaching. A department store could host specialty brand or limited-edition pop-ups in its women’s fashion department (à la Target and Kate Spade). By crafting experiences around partner ecosystems and giving customers access to products and services that complement their own, retailers can differentiate themselves by catering to customer lifestyles. Here again, having clear visibility into inventory, fulfillment, supply chain and the like — in this case, internally and across the ecosystem — is critical to monetizing experiences like these.

3. Actively engage in marketplaces where your customers are.

With the ability to pop-up smaller physical shops at targeted events, markets, or inside other stores — e.g., a grocer at a farmer’s market, a restaurant at a stadium event — retailers can meet customers where they are. This also applies to strategically chosen online marketplaces (lululemon on Strava, for example). Retailers also should be thinking about strategies for getting noticed by an emerging class of independent generative AI shopping agents.

Today's consumers don't think in terms of online vs. offline. They simply want great experiences. And ultimately, they will gravitate to retailers that consistently deliver them.

Kristin Howell is global vice president for retail solution management at SAP, a market-leading software and technology company.