An op-ed in Business of Fashion made waves suggesting a future option for brick-and-mortar retail. Charge customers for the shopping experience. Call it an admission, call it membership, it seems new, but entry fee retail has been around for some time.
The Shifting Role of Retail
If it seems crazy on its face, that’s probably because it contradicts long-held concepts about retail. But, if eCommerce has taught us anything, it’s that retail needs a rethink.
To that end, observers and experts frequently talk about experience retail. And we’ve come across different approaches to this.
But experience retail is about two things (at least). On the one hand, it requires integrating online and in-store channels seamlessly to give customers consistent pricing, stock-levels, messaging and purchasing options. On the other hand, it means giving customers a reason to come to the store.
Entry Fee Retail: Charging for the Experience
In his Business of Fashion editorial, the author B. Joseph Pine contends that entry fee retail is the biggest sign a retailer has succeeded in giving its customers that reason. He points to Wingtip Store in San Francisco. The fashion and apparel retailer offers a members-only club. The club includes a bar, billiards, food and private dining, and golf simulators.
The cost to join starts at $1,000 (plus a monthly membership fee) for which customers get a 10% discount on Wingtip Store purchases and other perks. Pine says each operation creates demand for the other.
The Customer (Experience) is King
The club works because Wingtip customers can afford its higher-end products. They presumably have the expendable income to match the lifestyle that Wingtip purveys through its club. Consequently, whatever experience a retailer provides its customer must be married to its business model.
Whether this means an elaborate showroom that demonstrates a brand in a grand context or a fee-based loyalty program you manage from your POS, the proposition must be based on knowing your customers well enough to structure the experience they would be glad to pay for.
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