What are Destination Stores?

A "Destination Store" is a retail store that combines several attributes to make it very attractive to consumers. It causes consumers to intentionally visit store to store, even if the location is inconvenient. It features a special offer and a unique experience, usually associated with a strong brand or "local hero." Destination stores combine elements of department stores, large malls, discount offers from discounters, unique and innovative types of displays and interactions, fun recreation centers, and many more. It appeals to the consumer to such an extent that it reduces the boundary between a store and entertainment destinations in the consumer's mind.

Aside from the pandemic, nothing has had a more significant impact on the resurgence of the "destination store" than Gen Z. While Gen X and Millennials began to shun the mall in droves, it's the so-called "selfie generation" that is now looking for new ways to interact with products before making a purchase.

Generation Z brains are so used to seeking the release of dopamine, oxytocin, serotonin, and endorphins (DOSE) from social engagement and the flash of constant digital activity on their phones that they crave it just as much in real-world interactions. This generation is looking more than ever to connect with others in physical experiences that constantly captivate and excite - and provide multiple opportunities to pause, snap, and share for a moment.

We've seen competitive socializing come into vogue with the establishment of new mini-golf, darts, and bowling venues in city centers and shopping malls. This has changed in the past two years due to the Covid 19 pandemic, but let's dive into pre-pandemic retail. This experience and technology frontier in brick-and-mortar retail can be divided into market-relevant experience, loyalty through entertainment, and the rise of the showroom.

Market relevant experience

Let's look at the Lululemon Athletica brand, which uses the Customer Experience to expand retail commerce as a target. Lululemon Athletica is a brand that is experiencing astronomical growth. A community-based operation is the critical strategic pillar that sets Lululemon apart (warning, ambiguous). A store of this brand is the highest expression of the company's vision. In the past, many retailers have viewed their stores as more of a sales-only venue, but the destination store concept goes beyond just sales. Lululemon is an experiential brand that brings together people who love to sweat. The stores combine a store with a "sweat studio" and a "fuel bar" for healthy refreshments. In addition, the "experience store" allows customers to try out selected apparel for classes before purchasing.

It's about providing customers with a memorable shopping experience that makes them consciously visit and return. A high penetration rate characterizes destination stores.

Loyalty through innovation and technology

Consumers demand more than flashing lights and large TV monitors showing product images every three seconds. The new needs are no longer acceptable and smack of an outdated worldview created by people who have lost touch with today's market. Technology for technology's sake and technology without a well-thought-out marketing plan is no longer acceptable.

A destination store is more than just showcasing products and creating a dedicated POS area. Consumers demand that brands incorporate more texture, color, spatial design, anda, of course, technology into their stores to make them feel more "human." Sounds confusing, right? But unfortunately, that's how society works today. Let's look at retailers that have used technology to build loyalty.

The Boots brand celebrated its 170th birthday in 2019 by opening a concept store in Covent Garden. The white marble-tiled beauty hall houses more than 300 brands and has a YouTube studio and Instagram area where shoppers can film and photograph their new purchases. Here, brands can begin the playful journey of allowing customers to encourage and entice them or try products with enthusiasm. This includes the personally produced on-site YouTube show, where customers can create professional videos with products that promote the store and the brands that carry them.

The user as brand ambassador is the new frontier in brand marketing.

Few brands are pushing the envelope further or faster than online luxury goods giant Farfetch, whose London store is designed to connect the online and offline worlds and use data to improve the shopping experience.

The store is packed with all sorts of tech magic. Customers can be recognized when they enter the store via an app linked to their online shopping account. This gives sales associates an instant view of shopping history and preferences. RFID-enabled clothing rails can identify products that interest customers and add them to their online wish list or assign dressing rooms waiting to be tried. Touch-screen mirrors allow customers to request and pay for alternative sizes before leaving the fitting room. This is truly the stuff of the future.

In the future, destination stores like those from Farfetch or Boots will become increasingly important because online retail will grow more robust, and customers will have more opportunities to buy products without leaving the house. To stay ahead of the competition, brick-and-mortar retailers must turn their stores into destinations for customers with special offers and unique experiences.

Features of a Destination Store:

  1. It offers many products related to an experience
  2. It offers not only products, but also services or experiences that customers can buy, for example paid gaming at a place that sells game consoles.
  3. It is usually large compared to traditional stores that sell the same things
  4. It usually has a metamarket concept where many linked products and services are available

The rise of the showroom

Showrooming and webrooming are not new concepts. Showrooming is when a shopper visits a store to look at a product but then buys the product online. Webrooming is the opposite of showrooming - consumers research products online before entering the store for a final evaluation and purchase. Shoppers transform retail stores into curated spaces where consumers can escape into the world of the brand.

In-house architects at established retailers like JC Penny emphasize the value of curated space and immersive design. It's not just about capturing the sale but also the brand experience. 78% of shoppers under 35 shop in-store and online simultaneously, and they are 34% more likely than older shoppers to use their cell phones in a store. How are brands adapting? How can physical stores better serve online sales?

It should be noted in the future that destination stores must also be able to adapt to customers' changing needs and preferences. This can be achieved by integrating technology such as augmented reality, virtual reality, or artificial intelligence to make the shopping experience more engaging and interactive for customers. Of course, it is essential not to forget to measure and regularly evaluate customers' constantly changing requirements and preferences.

An excellent example of a brand pushing the boundaries of showrooming and technology is Natuzzi, which launched a virtual reality shopping experience in 2019. The AR store is located in its Madison Avenue showroom. Here, customers can enter a digital drawing of their home and decorate it with Natuzzi pieces. Using Microsoft's HoloLens 2 headset, customers can interact with the environment and change the color of furniture pieces before purchasing. They even go so far as to allow customers to see a scaled-down hologram of their homes on a tabletop for a bird's eye view of the space. This is future.

The rise of the destination store

In conclusion, the destination store concept is essential in stationary retail and will become increasingly important. It is crucial to provide a unique offer and a memorable shopping experience to stand out from the competition and keep customers returning. Retailers who make their stores "destinations" for customers and adapt to changing demands and preferences have a better chance of succeeding in the competitive environment and winning the attention and loyalty of customers.

Let's recover and let the destination store revolution begin! Technology and cell phones have been the driving force since before Covid-19. As the world slowly but surely recovers from the pandemic, the physical experience will drive brand engagement, allowing consumers to reconnect and be human with them.