With the proliferation of e-commerce and overabundance of brick-and-mortars, brands are increasingly stepping into a brave new world of high-tech, high-concept experiential retail pop-up shops to convert on the ever evolving shopping habits of consumers.

The retail transformation is not just a fad, but a byproduct of brands pivoting to meet market demands and shift in shopping behaviors—even more so as a steady diet of department stores get dilapidated and left for dead on a daily basis.

No, consumers have not fully given up on physical retail stores and shopping malls and their aging reputation—yet—they’re just excited and looking toward new offerings and experiences, like frequenting showrooming, and stores where they can purchase bespoke products. Mass personalization is a reality—36 percent of consumers said they’re interested in personalized products or services, according to research by Deloitte.

As shopping also shifts online—Americans spent $102.7 billion in online sales over the last three months of 2016, which was 8.3 percent of the overall total of $1.24 trillion in retail sales—retailers are reevaluating their business models to capture sales and consumer affection.

Enter the appeal of innovative experiential retail shops as short-term, fantasy hangout spaces, an industry that was valued at $50 billion last year.

Melissa Gonzalez is the founder and CEO of The Lionesque Group, a company that builds temporary experiential retail pop-up shops for brands. Gonzalez, author of the book The Pop-Up Paradigm: How Brands Can Build Human Connections in a Digital Age, joined AListDaily to weigh in on how brands can connect with consumers through retail experiences.

Melisa Gonzalez, founder and CEO of Lion’Esque
Melissa Gonzalez, founder and CEO of The Lionesque Group.

How are brands building human connections in the digital age with retail experiences?

Melissa Gonzalez: More and more brands are understanding that they still need to create one-to-one moments, even in a global market. They’re doing this by creating “aha moments” in-store, moments that incite a sense of discovery and enlightenment. They’re integrating technology to learn more about customer interests and enable them to create more personalized customer journeys.

Why do retail experiences need to be a part of a brand’s experiential marketing strategy?

MG: In a physical space, a brand can connect with a customer across all five senses and truly immerse him or her into the story and value proposition of what they are offering. Every touch point heightens awareness, makes a connection deeper and is a moment along the customer’s path to purchase that cannot be truly replicated online or via mobile.

How much do these activations typically cost? Can you provide a specific example? 

MG: The amount can range widely and depends on a number of variables—goals determine many of the moving parts. In smaller, turnkey spaces, which are 280-square feet, a brand can create a good experience with a $20,000 budget for rent, design and staff. However, the larger scale, more experiential activations tend to range between $100,000-to-$250,000 on average for a short-term pop-up.

How is ROI being measured from these activations? What are the tools used to measure the impact of pop-up marketing?

MG: There is qualitative and quantitative ROI when measuring activations. On the quantitative side, brands can track foot traffic, dwell times, sales conversions, average cart size and how that compares to online, increase in online engagement and impact on traffic to their website. On the qualitative side, they’ve essentially created an open focus group through their activation where they can learn customer sentiment, what motivates them to purchase or not; how they respond to size, color and fit; how window design impacts foot traffic from week-to-week or month-to-month.

How does the Lionesque’s strategy differ and make it unique from others in the pop-up evolution?

MG: We have truly been pioneers in the pop-up retail format since 2009. We have been part of the evolution on re-thinking how brands utilize physical spaces. We sit at the intersection of understanding how to deliver an experiential in-store environment that is architected for sales and customer learning.

RADEN Pop-Up Store Launch

What are the tentpole events that brands are setting up pop-up shops for?

MG: There is really a wide range of reasons why a brand sets up a pop-up. Most common is testing and building brand awareness. Sales is always a component but what can be tested and learned, and the growth of brand awareness, are top of the list.

How do you envision AR, AI and layered analytics shaping the future of the industry? Is technology giving Brick and Mortars newfound life?

MG: Yes! The advantage online has been the ability to track a customer’s journey, his or her browse history and past purchases, among others, and using that information to inform decisions about what a customer is shown as a recommendation. On the flip side, an online customer can readily learn more and dive into the details of a product—like fabric, ingredients and product comparisons. In store has the benefit of touch and feel, but with the integration of AR, a customer can now have both at their fingertips. AR can bring a product to life right before the customer’s eyes with realistic 3D holograms, making it easier for them to visualize and understand the intricate features of a product and giving them more confidence to purchase. It also enables customers to explore additional options and make personalized modifications while shopping.

Why are AR store displays ads at the forefront and key to sales?

MG: As with all technology, every touch point of interaction is tracked and can provide a brand with corresponding analytics. AR is an invaluable informational tool by creating content and copy within in-store visual displays. A recent study showed that 77 percent of shoppers want to use AR to see product differences, such as a change in color or style. Engaging users through AR leads to longer times spent browsing in-store, increased product interaction time and more fluid product testing.

How is Amazon-Go going to change the face of retail?

MG: Amazon-Go is bringing the concept of self-checkout to the next level by pushing the boundaries of what seamless means by eliminating check-out altogether through the integration of technology, using a network of cameras and sensors to track which items customers grab and automatically charge them at the exit.

What are the big changes you’re seeing in the pop-up space? What’s one trend we’ll see develop over the next year?

MG: The integration of in-store intelligence on the product to consumer level. The deployments of radio-frequency identification tagging and tracking are really just getting legs. The amount of information that can be retrieved from this type of tracking will only expand, as will the way it powers brand to consumer interactions in a more personalized way.

Follow Manouk Akopyan on Twitter @Manouk_Akopyan