Experiential retail experiences are growing in popularity, as we recently blogged. The trend blends unique experiences with retail opportunities to retract new customers and build brand loyalty. Experiential marketing isn’t limited to shopping centers. Retail brands are expanding experiential marketing into the hospitality industry by creating hotels that showcase their products better than a catalog.
Experiential marketing at its core seeks to connect with the customer and create authentic relationships. The hospitality industry, particularly hotels and resorts, aim to deliver complete lifestyle experiences to win customers and draw a repeat business. For that reason, it’s natural for lifestyle brands to move into the hospitality space.
Additionally, the hotel industry is worth $2.3 trillion dollars and creates 109 million jobs worldwide. Expanding into this extensive space is another way to boost a retailer’s bottom line.
Who’s doing it?
Merging experiences with a hotel is not completely a new concept. Just look at the Hard Rock or Virgin Brands, which moved beyond their initial business into the hotel industry to sell a lifestyle. Fashion designers have paired with existing hoteliers to design high-end spaces. The different is now retailers are using hotels to promote their products.
A wide range of brands are jumping into the hotel space. Williams-Sonoma’s successful West Elm brand has six locations slated to open in 2018 with 100-150 rooms each. Bedding retailer Parachute’s luxury hotel is completely shoppable. Ikea operates a hotel in Sweden. Restoration Hardware opened a boutique hotel this year with high-end decor and furniture available for purchase.
Advantages of a brand hotel
Leasing space in a high-traffic urban downtown core is increasingly expensive. Offering a branded hotel near a high rent, high traffic area could transform the retail experience. It may be a less expensive way to get the brand before the audience compared to leasing a small store. These hotels and their rooms within could become showrooms or experience centers for the guests.
Keys to hotels for retail
Creating a hospitality experience is ideal for lifestyle brands. That’s why we see top fashion designers like Karl Lagerfeld or furniture retailers like Shinola exploring the hotel space. It’s an easy way to offer multiple touchpoints with consumers.
It’s important to view the hotel expansion as a lifestyle, not a project. The hotel space should be an extension of what the brand already offers. The rooms are not working catalog, but a way to showcase the lifestyle. Provide the guests the option to buy the items that they see around them without overt promotion.