Experiential Retail: How Gradient and Kiehl’s are Redefining Customer Engagement

Table of Contents

1. Key Highlights:
2. Introduction
3. A Two-Sided Store Becomes a Live A/B Test
4. The Results Speak Volumes
5. From Square Footage to Time Spent
6. A Strategic Shift Toward Measurable Experience
7. The Takeaway for Retailers? Experience = Revenue
8. FAQ

Key Highlights:

• Gradient's innovative partnership with Kiehl’s transformed a traditional retail space into an immersive experience, significantly boosting customer engagement and sales.
• A/B testing revealed that shoppers in the immersive section were 2.6 times more likely to make a purchase, with an average dwell time 55% longer than the beauty retail average.
• This project showcases the growing importance of experiential retail as a strategy for brands to foster deeper emotional connections with consumers, ultimately driving revenue.

Introduction

In the competitive landscape of retail, brands are constantly searching for new ways to capture consumer attention and increase sales. As online shopping continues to dominate, physical stores face the challenge of creating memorable experiences that not only attract foot traffic but also translate into revenue. Gradient, a New York-based creative agency, is leading the charge with its innovative approach to experiential retail, exemplified in a groundbreaking project with Kiehl’s, the heritage skincare brand. By transforming a standard retail location into a dual-purpose space—one side traditional, the other immersive—Gradient has demonstrated that engaging design is not just a branding exercise but a crucial revenue driver.

A Two-Sided Store Becomes a Live A/B Test

Gradient’s collaboration with Kiehl’s involved a radical redesign of a store in Hell’s Kitchen, New York. The objective was clear: to convert half of the retail space into an experiential zone that would engage customers in a way that traditional retail could not. The immersive section featured elements like locker room aesthetics, interactive lockers, and shower installations that conveyed educational brand messaging, effectively creating a living advertisement for Kiehl’s products.

“This particular store was performing like all the others,” explained Pauline Oudin, CEO of Gradient. “But it had an underutilized, even unused section. They asked for help to transform that space into an experience—something more lasting than a typical pop-up—and to promote their winter product line.” By juxtaposing the classic retail experience with an innovative, immersive one, Gradient aimed to facilitate a direct comparison of customer behavior across both environments.

The Results Speak Volumes

The results of this unique A/B test were telling. Utilizing cutting-edge tracking technology from LiveGauge, Gradient was able to measure critical metrics such as customer engagement, dwell time, and purchase behavior without infringing on customer privacy. The findings were impressive:

• Shoppers who entered through the immersive side were 2.6 times more likely to complete a purchase.
• The average time spent in the store was 13.4 minutes—55% longer than the industry average for beauty retailers.
• Store transactions outperformed Kiehl’s national average by 8 percentage points.

These metrics underscore the power of immersive retail experiences; customers not only spent more time in the store but also left with more products. “Our research confirms what retail’s sharpest minds have long felt,” Oudin stated. “Engagement isn’t just nice to have; it’s a revenue driver. Today’s shopper wants more than transactions; they want to feel something. When they spend more time in a space, they absorb more. And when that experience resonates, conversion follows naturally.”

From Square Footage to Time Spent

This shift in focus from traditional metrics such as sales per square foot to time spent per customer is becoming increasingly relevant in the retail industry. Oudin cited examples from Coach stores in Asia, where the emphasis is now on customer dwell time rather than just sales figures. “Consumers can buy almost everything online now—except maybe ultra-luxury,” she noted. “So what is retail for? It’s for creating strong, memorable, emotional connections between the consumer and the brand.”

Creating these connections requires retailers to rethink their spaces. “If you think about it, the store needs to be a place where people can truly fall in love with the brand,” Oudin emphasized. This sentiment has led Gradient to advocate for more experiential environments, where consumers can engage deeply with products and brand narratives.

A Strategic Shift Toward Measurable Experience

Gradient itself has undergone a transformation, evolving from a traditional event production company into a strategic experiential agency focused on measurable impact. Oudin, who took the reins as CEO with a vision to shift the agency's approach, underscored the importance of integrating data into experiential projects. “When I joined seven years ago, my mission was to go from being a cost for brands to a strategic solution,” she said.

The Kiehl’s project represented a significant opportunity to implement this vision. “We’d already been working with Kiehl’s for over a year on experiences, so when they brought us the concept store idea, we jumped at the chance.” Oudin’s hands-on involvement ensured that the project aligned with Gradient’s goal of generating not just buzz, but actionable data that could inform future retail strategies.

The Takeaway for Retailers? Experience = Revenue

The insights gleaned from the Kiehl’s activation serve as a powerful case study in the modern retail landscape. Oudin articulated this well: “If you can get people to stay, to explore, to post, and to buy—then you’ve created a retail space that’s more than a store. It’s a platform for advocacy.” This statement encapsulates the essence of experiential retail—the ability to turn a shopping trip into a memorable journey that encourages social sharing and brand loyalty.

Oudin's comparison to the influence of celebrity endorsements further emphasizes the importance of consumer engagement. “Every Sydney Sweeney post is worth a lot of money,” she remarked, highlighting how increased interactions can amplify a brand's reach and value. In a similar vein, the immersive retail experience aims to create advocates who are eager to share their experiences online.

FAQ

What is experiential retail?

Experiential retail refers to a shopping approach that focuses on creating engaging and memorable experiences for customers rather than simply providing products for purchase. This often involves interactive displays, immersive environments, and personalized service to foster deeper emotional connections between consumers and brands.

How does immersive design impact customer behavior?

Research has shown that immersive design can significantly enhance customer engagement, leading to increased dwell time and higher purchase rates. As evidenced by the Kiehl’s and Gradient partnership, customers in immersive spaces are more likely to check out and spend more time exploring the store.

Why is dwell time becoming a critical metric for retailers?

With the rise of e-commerce, traditional metrics like sales per square foot are being re-evaluated. Dwell time provides insights into customer engagement and the effectiveness of the retail experience, indicating how well a brand is connecting with its consumers.

Can experiential retail strategies be applied to all types of retail?

While some experiential strategies may be more effective for certain industries, like beauty or fashion, the principles of creating engaging, memorable experiences can be adapted to various retail sectors. The goal is to enhance customer interactions and foster loyalty.

What role does technology play in experiential retail?

Technology enhances the ability to collect data on customer behavior, measure engagement, and personalize experiences. Tools like LiveGauge allow retailers to track customer movements and interactions within the store, providing valuable insights that can inform future strategies.

How can brands start implementing experiential retail?

Brands looking to adopt experiential retail should begin by assessing their customer journey and identifying areas where they can create more engaging touchpoints. This may involve redesigning physical spaces, integrating technology for personalization, or developing interactive experiences that resonate with their target audience.