Michelle Newton, Head of Cultural Forecasting, Fiftyfive5, Part of Accenture Song

Retailers may not typically view themselves as being in the entertainment business. But with the rules of retail being increasingly disassembled, it has become imperative for retailers to provide customers with experiential value.

Omni-channel retail laid the foundations for an integration of digital and physical customer engagement, empowering a new era of frictionless shopping.

Now, the next customer-driven evolution goes beyond frictionless to fascination – from the omni-channel to the ‘omni-awe’ – harnessing a new customer obsession with how we feel and the experience that retail can deliver. Our need for novel experiences in-store and online has never been greater. Retailers must now move to create immersive and elevated experiences for the customers.

Retail during the permacrisis

The experiences we seek in the retail sector go beyond customer service to customer awe, aiming for moments that instil inspiration, connection and meaning in the customer relationship. Australian consumers are living in a permacrisis, with cost of living, housing, climate and geopolitical issues taking their toll. The resultant fall in consumer spending has put retailers at risk, with more than 500 retail businesses having entered administration so far this financial year, compared with 193 during the same period in 2021/22.

As well as the risk this poses to retailers, it may also pose a great opportunity. While 61% of consumers surveyed expect intense emotions from brands’ activations, 70% of customers surveyed can’t remember the last time a brand did something exciting. This is a moment in time for Australian retailers to reignite the experiential agenda. If retailers hope to survive and thrive during the permacrisis, they must offer value through awe, enchantment and next-level experiences both online and in-store.

Revival of the high street

One of the stronger signals that points to this trend is the revival of bricks and mortar in the retail world. Twice as many stores opened in the US in 2022 than closed in the two previous years (The Daily on Retail), many of which were digitally native brands.

The concept of flagship stores is being reinvented. These sprawling retail destinations are no longer just places to buy products. They’re immersive brand experiences designed to entertain, educate and inspire. A global luxury brand worked with a high-profile artist to create digital overlays of the branded art across landmarks such as the Statue of Liberty, the Arc de Triomphe and a 3D billboard in Tokyo. It also created life-size animatronic robots of the artist painting in-store, mesmerising global audiences with a reward of more than 90 million views on TikTok.

“In the new era of permacrisis, consumers crave memorable experiences over transactions.”

An escape from reality 

The ‘phygi-fun’ trend continues to blur the boundaries of reality. With 63% of global consumers surveyed wanting brands to provide multi-sensory experiences, retailers should utilise technologies in artificial intelligence, artificial reality and virtual reality to create immersive, accessible, and exciting spaces. As the virtual and the physical worlds overlap, linking the awe factor directly to commerce means ‘verch merch’ will inspire. For instance, a large global sport apparel brand has installed interactive AR smart mirrors in fitting rooms, guiding its customers through breathing exercises and workout routines while, in the fitting room, helping them find the best size and product based on their performance.

Harnessing new technologies 

The ‘omni-awe’ trend critically explores the battleground of customer experience (CX): two thirds of companies surveyed now compete on the basis of CX, up from one third a decade ago. That battlefield is getting increasingly sophisticated with new technologies providing access into the value of fandom beyond transaction and traditional loyalty programs. The retail fandom trend is in full force.

A high-end clothing brand has cracked the code in bridging connections with culture, audience and new emerging technology environments. The latest apparel launch has a near-field communications chip sewn into each item of clothing, which corresponds with a non-fungible token that, when unlocked, proves authenticity of the garment and allows the owner to access community features. This creates a new spin on limited editions and rare collections as brands increasingly move into a digital world where only the most engaged fans can achieve a meta-status.

Tapping into emotional experience

83% of consumers surveyed actively seek out experiences that bring them joy and happiness. Retailers must seek to read customers’ emotions and mood in real time, and personalise their experience to that emotion. These emotional associations powerfully shape consumers’ actions, generating positive customer experiences, which in turn leads to strong brand loyalty.

The advent of AI-powered agents can discern a person’s emotions by analysing their facial expressions and tone of voice, responding accordingly. Increasing the use of AI in stores will more accurately link our mood with the store’s response to it via real-time diagnostics.

But omni-awe isn’t all about the big budget tech thrills and spills. The ‘petite pleasure’ trend, otherwise known as the ‘lipstick effect’, kicks into overdrive as small indulgences are prioritised as essential spending. Here, traditional loyalty programs have a powerful advantage to surprise and delight consumers.

Seeking connection during a loneliness epidemic 

The World Health Organisation recently declared loneliness a global health epidemic. The antidote to loneliness has always been to fulfil the need for connections, and retailers around the world are responding to this idea with the trend ‘fourth place retail’. The new fourth place mindset is a departure from the traditional space-making mindset, where retail is designed to house and sell goods, but rather as a cultural hub for connection and content creation.

In Beijing, a shopping mall recently transformed into a place where younger generations (Gen Zs) could meet and experience music festivals and farmers markets, a place to belong, increasing social engagement and commercial value of the shopping mall.

Going a step further, a French fashion brand has taken the concept of ‘retail as a residence’, quite literally emphasising the importance of feeling at home while shopping. The brand has created a boutique store in Australia that was designed to look and feel like a Parisian apartment, bringing the omni-awe of Paris living to inner-city Brisbane.

“Our need for novel experiences in-store and online has never been greater. Retailers must now move to create immersive and elevated experiences for the customers.”

Retail experience to be amplified across all touchpoints 

In a sector dominated by online shopping and e-commerce convenience, the omni-awe trend sets the challenge for retailers to remain relevant in the age of digital dominance. In the new era of permacrisis, consumers crave memorable experiences over transactions. The omni-awe opportunity requires a fundamental shift in mindset and strategy. Retailers must invest in and rethink new technologies across the physical and digital experience in the context of omni-awe, delivering seamless and captivating experiences that leave a lasting impression for customers.

The byline was originally published on Retail World by Michelle Newton, Head of Cultural Forecasting, Fiftyfive5 part of Accenture Song.