Experiential Retail: How This Trend Is Shaping Customer Experience

Key Takeaways

• Customer Expectations: Physical retail still accounts for nearly $6 trillion in spending, but Gen Z customers (60% expect experiential spaces) visit less often and demand more from each trip.

• Proven ROI: Experiential retail stores can drive measurable results – 30% higher monthly spending, 16.7% increase in purchase frequency, and 28.6% increase in purchase quantity.

• Design Priorities: Three elements matter most to consumers: visually appealing interiors (80%), sensory engagement through lighting and music (72%), and personalization technology (65%).

• Scalable Technology: AI-powered analytics enable real-time personalization, AR/VR helps customers visualize products, and unified platforms control all media from one interface. 85% of brands now use technology to support experiential strategies.

• Metrics That Matter: While 43% of brands cite loyalty as their goal, the most important metrics also include dwell time, conversion rates, basket size, return rates, and repeat visit frequency – not just attendance and social shares.

Physical retail is far from dead. In fact, American consumers spend nearly $6 trillion in physical stores, five times what they spend online. But simply having a store isn’t enough – increasingly, consumers need a good reason to shop outside their homes.

Customers in today’s market, especially Gen Z, visit physical retail locations less often and expect more from each trip. Sixty percent of Gen Z consumers expect retail spaces to be fun and experiential as well as functional. They seek out the tactile, experiential aspects of shopping that online can’t compete with – hands-on interaction with products and immersive brand experiences.

When companies get this right, research shows that customers respond positively, with increased spending, more frequent visits, and more purchases per transaction. And brands are taking notice.

Fifty-one percent of marketers are increasing their experiential marketing budgets through 2026, with most allocating between $500,000 and $1 million annually. This isn’t a trend retailers can afford to miss, as early movers are already benefiting from greater customer loyalty and brand differentiation. 

Adopting the right technology to engage customers in-location is the first step but technology alone can’t deliver results without the right experiential retail strategy. Here's what the research shows about which tactics have the greatest impact, how to implement them effectively, and how to measure success.

What Is Experiential Retail?

Experiential retail is a customer experience strategy that transforms stores into immersive environments where customers actively engage with products, brands, and services through interactive displays, sensory elements, and hands-on experiences in ways that online shopping can’t match. 

According to research from Wharton, customers who visit experiential retail stores increase their monthly spending by an average of $6 (a 30% lift from their typical $20 baseline), driven by both their shopping more frequently and buying more per visit. The impact is most notable among customers exploring premium, complex products.

Experiential retail works by addressing a fundamental gap in digital commerce: the inability to touch, test, and truly understand products before buying. When done well, these environments use design, technology, and sensory engagement to help customers make confident purchase decisions about items that benefit from hands-on evaluation.

The market reflects this shift. Experiential retail market itself is projected to grow from $114.6 billion in 2024 to $543.45 billion by 2035 – a 15.2% compound annual growth rate that signals retailers are planning to invest heavily in this approach.

Why Experiential Retail Matters Now

Three primary forces are making experiential retail essential for modern brands.

1. Consumer Behavior is Changing

Younger generations grew up with more digital options and frictionless e-commerce. To visit a physical store, younger consumers are looking for something that justifies the trip – and they're making that choice less frequently.

Eighty-four percent of Gen Z and Millennials are more encouraged to shop in stores with personalized in-store recommendations based on their shopping history, compared to just 59% of older generations. Each visit needs to deliver value that online shopping can't match.

2. The Business Case is Compelling 

Experiential stores inspire sustained behavior change, not just one-time visits. Customers who engage with experiential retail increase purchase frequency by 16.7% and purchase quantity by 28.6%, with the strongest lift coming from high-value customers exploring premium products.

Retail now ranks as the second-highest industry for experiential investment, trailing only behind spirits and alcohol.

3. Technology Has Made Sophisticated Experiences Scalable 

Eighty-five percent of brands now use technology platforms to support their experiential strategies, making it possible to deploy interactive displays, real-time personalization, and data-driven optimization across multiple locations without exponentially increasing operational complexity.

The opportunity window is clear: physical retail still captures the majority of consumer spending, but only retailers creating compelling reasons for shoppers to visit in person will maintain that advantage. Experiential retail is how market leaders are defending and growing their share.

How to Drive Results

Experiential retail involves a strategic combination of design, technology, and operational execution. Research on consumer preferences reveals a clear hierarchy of what matters most, with visual design and sensory engagement leading the way:

• Design aesthetics set the foundation. Eighty percent of consumers cite visually appealing, well-organized interiors as a top factor in determining their shopping experience. This shouldn’t be surprising: beyond the superficial, the physical environment signals brand values and product quality before customers interact with a single item. 

• Sensory engagement creates emotional connection. Seventy-two percent of consumers value sensory elements like lighting, music, and tactile interaction. This works because, according to another study, multisensory experiences bypass rational evaluation and trigger emotional responses that influence purchase decisions.

• Technology integration enables personalization. Sixty-five percent of consumers prefer stores that use technology to enhance interactivity and personalization. The most effective implementations solve customer problems – think interactive displays that let shoppers explore product features at their own pace or smart fitting rooms with adjustable lighting and music create customized trial experiences. 

While the specific tactics vary widely by category and brand positioning, certain patterns emerge among the retailers getting it right.

Real-World Examples of Brand-Building Experience

There are countless examples of retailers (including many profiled by Net Choice) successfully putting these experiential strategies into practice:

• Pop Ups: These temporary stores allow even small online businesses to move in-person, attracting customers with interactive displays, swag, and special services. Pinterest, for example, launched a five-day pop-up in NYC to feature products tied to its predicted trends for the year; Monday Swimwear launched a pop up with a dedicated specialist to help shoppers find the right fit for their bodies.

• Immersive Showroom Experiences: Rockbot supported the design of specialized rooms for Tempur-Pedic’s NYC flagship store that put video, audio, and lighting in visitor’s control, powered by a custom touchscreen.

• Shared Moments and Community: Retailers design spaces for photo opps to encourage user-generated content and increase social media presence. For example in The Prada Cafe Harrods, London, features a 1950s soda shop aesthetic, the H&M Social Fitting Room turns into a disco with color-changing lights, and Vuori (apparel) holds free events like meditations, movement classes, and aura readings to engage its customer base.

• Hands-on Engagement: Customers are encouraged to explore and learn about products through hands-on, engaging concepts, which helps reduce purchase risk for complex products. Dick’s Sporting Goods Megastore, for example, includes a rock wall and ice rink for visitors to enjoy.

The common thread across successful implementations: they prioritize customer needs over novelty, using design and technology to reduce purchase friction rather than simply creating Instagram moments.

Custom digital media experience created by Rockbot at the Tempur-Pedic flagship store in New York, New York. (Image Source: Rockbot)

Technology Powering a Memorable Retail Experience

The gap between experiential retail concepts and execution narrows when the right technology infrastructure is in place. But the retailers seeing the strongest results aren't necessarily using the newest or flashiest technology – they're using it in-store tech strategically, choosing tools that solve specific customer friction points and integrating them into systems that feel seamless rather than overwhelming.

The most advanced brands are moving beyond historical purchase data to capture real-time customer intent and sentiment through in-store sensors and AI-powered analytics. This capability transforms how stores operate in the moment: 

• Digital displays adjust based on traffic patterns. 

• Product recommendations adapt to browsing behavior. 

• The system identifies when a customer shifts from exploration to serious purchase consideration.

The technology works in the background, making personalization feel natural rather than intrusive or algorithmic.

Augmented and virtual reality – now the fastest-growing technology segment in experiential retail – solve a particularly stubborn challenge: helping customers visualize products in their own context before committing to a purchase.

AR-powered mirrors eliminate the friction of physically trying on multiple options. VR experiences transport customers into brand stories or product demonstrations that would be impossible to recreate in physical space. This technology proves especially valuable for high-consideration purchases where customers need confidence that translates into conversion rather than continued browsing.

The most sophisticated implementations tie everything together through integrated platforms like Rockbot that allow teams to control music, digital signage, interactive displays, and TV content from a single interface. This unified approach eliminates the operational complexity that once made experiential retail prohibitively difficult to scale beyond flagship locations. 

Retailers can deploy consistent brand experiences across dozens or hundreds of stores, update content in real-time based on performance data, and gather analytics on what's engaging customers versus what gets ignored.

Measuring What Matters

Measuring experiential retail in ways that justify continued investment can be tricky. Data about the industry's approach reveals a significant disconnect: while 43% of brands cite building loyalty as their primary goal, the most common metrics are short-term and transactional – attendance numbers (44%), ticket sales (46%), and social media shares (33%).

Unfortunately, these metrics don’t indicate whether experiential retail is changing customer behavior or just creating one-time moments.

On the other hand:

• Dwell time shows whether customers are engaging with displays or walking past them. 

• Conversion rates reveal whether interaction translates to purchase. 

• Basket size and return rates indicate whether customers are making more confident purchase decisions. 

• Repeat visit frequency demonstrates whether the experience creates lasting loyalty or temporary novelty.

The most sophisticated retailers are tracking metrics that span the customer journey. These include which touchpoints customers interact with before purchasing, how many visits it takes to convert on complex products, and whether in-store experiences influence online behavior.

This type of measurement is only possible with integrated systems that can connect in-store interactions to purchase data (not just count how many people showed up).

As the above-cited report indicates, this measurement gap exists partly because 59% of brands cite lack of team resources as a major challenge. Technology platforms that automate data collection and analysis can help, but teams also need to define clear and manageable success metrics upfront and build that measurement into the experience design (not try to retrofit it afterward).

For retail experiences that center around screens, these digital signage KPIs are a good starting point. 

Experiential Retail Challenges Worth Noting

Experiential retail delivers results, but it's not without obstacles. Cost is the most obvious barrier. High-quality interactive displays, AR/VR systems, and integrated platforms require significant upfront investment.

According to market data, this challenge disproportionately affects small and mid-sized retailers who wind up competing against major brands with more resources. Smaller brands need to start strategically, implementing smaller-scale innovations like enhanced lighting, audio curation, or limited interactive elements before committing to full-scale experiences.

For expanding companies, the operational complexity of retail experiences multiply with scale. Managing content across multiple locations, training staff to support new systems, and maintaining technical infrastructure all require ongoing resources.

This is why 59% of brands cite resource constraints as a major challenge. Technology can automate some of this burden, but retailers need realistic expectations about the operational commitment required to maintain quality experiences over time.

Privacy concerns are also important to consider. When brands use customer data to personalize experiences, transparency about what's being collected and how it's used is vital. Retailers crossing the line from helpful to creepy risk backlash that undermines the entire investment – and research backs this up.

On the other hand, clear privacy policies and opt-in approaches build the trust that makes personalization effective rather than invasive.

Your Expert Partner for Retail Experience

Physical retail isn't dying, but the standards that make a store worth visiting have changed significantly. And experiential retail is one of the ways leading brands are addressing this change.

Rockbot's unified media platform helps retailers design, deploy, and optimize experiential environments at scale. Reach out today to learn more.

Frequently Asked Questions

What is the best example of experiential retail?

The best example of experiential retail depends on the product category, but successful implementations share common characteristics: they solve customer shopper friction points rather than just creating novelty. 

Tempur-Pedic's immersive flagship showroom lets customers control audio, video, and lighting to experience products in context. Dick's Sporting Goods Megastore includes rock walls and ice rinks for hands-on product testing. Pop-ups like Pinterest's NYC showcase or Monday Swimwear's fit specialist experience demonstrate how even temporary spaces can create memorable brand interactions.

The most effective examples prioritize helping customers make confident purchase decisions over simply generating social media moments.

What is an example of an experiential purchase?

An example of an experiential purchase would be when customers engage with products or brands through interactive, hands-on experiences before buying. Examples include trying on clothes in H&M's "disco" fitting rooms with adjustable lighting and music or experiencing Tempur-Pedic mattresses in their customized sleep environments.

These purchases typically involve premium or complex products where customers benefit from tactile interaction and product education before committing. Research shows customers who make experiential purchases increase their spending by 30% and shop more frequently than those who don't engage with these experiences.

How is experiential retail different from traditional retail?

Experiential retail is different from traditional retail because it transforms stores from transaction points into immersive destinations where customers actively engage with products through interactive displays, sensory elements, and hands-on experiences. While traditional retail focuses primarily on product availability and price, experiential retail prioritizes helping customers understand and connect with products in ways online shopping can't replicate.

This approach drives measurable behavior change – customers can increase purchase frequency by 16.7% and purchase quantity by 28.6% – because the experience reduces purchase hesitation, particularly for premium or complex products. 

What does experiential retail look like in 2026?

Experiential retail in 2026 looks like a combination of sophisticated technology and strategic design to create personalized, scalable customer experiences. According to BDO, retailers are increasingly using AI-powered sensors and analytics to capture real-time customer intent, adjusting digital displays and product recommendations based on browsing behavior.

The same data shows that augmented and virtual reality – the fastest-growing technology segment in experiential retail – helps customers visualize products in their own context before purchasing. 

What is experiential retailing?

Experiential retailing is a customer experience strategy that transforms physical stores into immersive environments where customers actively engage with products, brands, and services through interactive displays, sensory elements, and hands-on experiences that online shopping can't match.

This approach addresses a fundamental gap in digital commerce: the inability to touch, test, and truly understand products before buying. Research from Wharton shows customers who visit experiential retail stores increase their monthly spending by 30%, driven by both shopping more frequently and buying more per visit.

The experiential retail market is projected to grow from $114.6 billion in 2024 to $543.45 billion by 2035, reflecting significant investment from retailers across categories.