As experiential retail remains one of the hottest online retail trends for 2025, it’s time that commerce businesses take full advantage of implementing it. Here’s what to consider in this respect.
Even though the notion of experiential retail is nothing new, as the adoption of emotional commerce has continuously demonstrated exceptional results over time, particularly in physical stores in the apparel & fashion and several other market verticals, since 2024, its momentum has gotten another boost, in many ways fueled by the galloping growth of AR/MR and generative AI technologies.
In particular, according to recent research results, the volume of the international experiential retail market is expected to grow by a significant 14% CAGR from 2024 to 2032, which promises unprecedented opportunities for commerce businesses, seeking to improve their sales rates and overall revenue results.
The Rise of Experiential Retail 2.0
Unlike the somewhat older iterations, the newly emerged experiential retail 2.0 is centered around the powerful blend of technology and immersive, highly interactive experience, aimed at providing the so-to-speak meaningful shopping connection to brands’ customers.
Namely, some of the key characteristics of experiential retail 2.0, among other things, include the following:
- key focus on the so-called “phygital” retail strategy, which encompasses the use of best emotional commerce practices to implement an effective omnichannel retail strategy, building a true connection to consumers across all available channels (both online & offline);
- adoption of AR/MR/VR tech to provide a high-end shopping experience via virtual try-on/fitting rooms, smart mirrors, digital avatars, interactive workshops, popups and demos, hence ensuring a fully-immersive customer journey, which fosters positive emotions and fun;
- implementation of next-gen AI solutions, which leverage real-time microlearning tools to provide a hyper-personalized shopping assistant experience to people interacting with a retailer/brand online or offline, and more.
How the Concept of Digital Twins Empowers Experiential Retail 2.0
In the retail context, the concept of digital twins implies the creation of a so-to-speak digital copy/replica of a physical retail store, aimed at optimizing and improving the entire operational cycle, particularly when it comes supply chain and inventory management, and innovating the interaction between a retailer/signature brand and its customers across all steps of their shopping journey.
In plain words, the use of digital twins enables simulating the entire customer behavior both offline and online, predicting the most frequent purchasing patterns, hence enabling businesses to enhance navigation in-store by testing out hyper-personalized layouts, removing possible bottlenecks and adding more opportunities to engage a customer with a particular brand/product, in the most natural, interactive way possible.
Even though the concept of “digital twins” is heavily based on a tech-powered, data-driven approach, its success on the executive level as of today essentially depends on the frontline team members, too, aside from the dedicated AI assistants, who enable building a true connection with customers, particularly in the offline stores. These are responsible for providing actionable instructions and advice, and accompanying a person through their immersive shopping journey, hence ensuring the most successful activations on-site (e.g. helping out people with the use of IKEA Kreativ scan-and-pack features in their apps while in store).
Looking Ahead at Experiential Retail 3.0
As the analysts admit, the future of experiential retail will be heavily influenced by agentic AI, as well as the further adoption of 5G technologies. These will ensure instant connectivity, hence taking the immersive shopping experience to the entirely next level, hyper-personalized and nuanced, yet seamless in its essence.
However, it’s still hard to predict whether the adoption of advanced mixed reality tech will be adopted in a timely manner industry-wide, on a global scale, given the existing economic turbulence across various economic regions. Rather, the top retailers are expected to pioneer innovation in this respect, with smaller industry players joining the race in specific, relatively smaller market segments.