There’s no doubt that digital channels represent a retail reality. But for some sellers, a fully digital presence is never going to be sufficient. According to several insights and real-world examples in recent months, the key to determining when brick-and-mortar, in-person experiences are most critical might reflect the types of products being sold.

For example, luxury retailers begrudgingly entered online markets, but they have found that their need to maintain high-end enclaves to display their luxury wares are still critical to maintaining their positioning and competitive advantages. Some predictions indicate that 25 percent of luxury sales will occur online by 2025. Yet the chief financial officer of the LVMH group—which owns such famous luxury brands as Christian Dior, Louis Vuitton, and Tiffany’s—has asserted strongly that he believes luxury growth can only occur through stores that provide a true luxury experience.

Experiences are similarly important for “deep” products, defined as those that require extended, in-depth examination before customers will feel comfortable buying them. (They might also be called experience products.) When retailers promote deep products, such as cosmetics, they can effectively encourage consumers to visit their stores. In turn, research shows that these visitors buy more, both during that visit and in subsequent purchase occasions online. It appears that by giving them a means to undertake “experiential learning” about these deep products, in-store interactions leave consumers more engaged and excited about their product purchases.

For retailers, these combined findings suggest a new method for defining their omnichannel strategy. If their products evoke strong engagement, because they are expensive, deep, luxurious, or experiential, the retailers should continue to provide shoppers with stores that allow them to interact with those products.

Discussion Question:

1. What other types of products might fit these categories and similarly require the availability of brick-and-mortar stores to keep consumers engaged?
2. Do these recommendations necessarily suggest that non-luxury and shallow product retailers can eliminate their physical channels? Why or why not?

 Source: Matthew Stern, “Forget Digital First. Stores First, Digital Second Is the Future of Luxury Retail,” Retail Wire, June 23, 2021; Tom Ryan, “Do Stores Need to Take Shoppers on an ‘Experiential Learning’ Trip to Succeed?” Retail Wire, June 24, 2021