Retail has evolved from traditional brick-and-mortar shops to immersive store experiences, focusing on engagement in addition to product display in order to create an emotional connection with shoppers. While the strategy of creating engaging, interactive brand experiences has become the new standard for quite some time, this tendency is accelerating and inspiring brands to expand their ecosystem through third spaces and new store formats, blurring the lines between retail and hospitality.

Luxury brands are experts at leveraging lifestyle to elevate their equity and create desirability. To create even more appeal, many of them are designing exclusive spaces where customers engage with them in new ways through hospitality services. Take french fashion label Jacquemus for example. To accompany the opening of its summer pop-up in the south of France, it launched a branded beach in collaboration with Indie Beach restaurant, open in Saint Tropez until October.

Imagined by Simon Porte Jacquemus, the label’s founder and designer, the beach echoes the brand’s identity, with a minimalist feel and bright hues of yellow to remind us of lemons and the sun. Individuals lounging at the beach have no choice but to face the brand, which expands its awareness and ignites curiosity. It also drives footfall to the pop-up conveniently located just steps away, and makes the brand a lifestyle one, associated with beautiful lounging and dolce vita.

The rising label could have very well been inspired by iconic brands such as Dior to partner with hospitality players and elevate itself to luxury lifestyle. In June, LVMH-owned Dior started a collaboration with the Beverly Hills hotel to celebrate the launch of its Dioriviera summer capsule. Hotel guests and passing visitors can enjoy the pool area, which was completely transformed with branded lounge chairs and matching umbrellas, a Dior ice cream truck and private cabanas where guests enjoy facials using the brand’s skincare products. Of course, the fashion house’s summer line is available to purchase right off the pool in its pop-up shop.

These type of lifestyle and commercial initiatives seem like a mutually beneficial arrangement: it further strengthens the brand’s lifestyle credentials and ecosystem while elevating the experience for hotel guests. “The Dioriviera summer pop-up offers our guests a captivating journey into the world of haute couture, showcasing the epitome of style and craftsmanship. This collaboration not only enhances our commitment to providing unparalleled luxury but also adds a touch of excitement and fun to our guests' stay,” shared the hotel’s general manager John Scanlon for an article covering the launch.

Looking at the evolution of department stores is a good indicator of where retail is going. In Europe, most of them leveraged hospitality as a way to bring convenience to shoppers but that was only done by providing food and beverage options as a way to spend more time in the store, which had little to do with overall experience. Now, they develop dedicated experiential spaces, monthly events, and work with brands to deliver branded activations that drive footfall and engagement in the store. Selfridges, one of the most renowned department stores, definitely stands out when it comes to creating engaging, elevated experiences inspired by the hospitality industry.

In addition to many high-end dining options, Selfridges hosts events year-round centered around engagement and entertainment targeting a diverse range of audiences. It hosts children events, has a cinema and an underground bar, and crafts a range of seasonal activations, such as this month’s Barbie Dreamhouse. Hosted in the Corner shop - its London’s dedicated pop-up space - the activation allows visitors to book beauty sessions for Barbie-inspired makeovers and dress like the doll through its curated merchandising section, before going to see the Barbie movie playing in one of its screening rooms. Given that customers will pay a premium of 16% for great retail customer experience, developing these types of lifestyle activations that boost desirability and competitive advantage is absolutely beneficial to retailers.

In Paris, the Galeries Lafayettes Haussmann inaugurated last year its Wellness Gallery; the space occupies an entire floor dedicated to wellness, which is a first for a department store. It houses a workout studio, spa, beauty services and infrared sauna - all aimed at providing a holistic wellness experience for shoppers. By devoting such a large space for sports and self-care and providing diversified services traditionally offered by gyms and spas, the retailer becomes a wellness destination in addition to a shopping center.

This strategy helps fulfill additional customer needs, providing a multitude of value-add experiences under one roof and a sense of convenience to customers wanting to relax after their shopping excursion. It is also a great way to drive traffic to the store and encourage spontaneous purchase from individuals initially visiting for a manicure, sports or sauna session.

Retailers are starting to realize that to create desirability and stay relevant in their shoppers’ minds, they must drive visibility and engagement through creative ways, increasingly seeking inspiration from the hospitality industry. Whether through branded cafés, spas, lounges or events, these types of service-driven initiatives boost brand engagement and visibility, which are two KPIs worth investing into. While the associated ROI might not be straightforward, there is no doubt as to whether or not it elevates a brand’s perceived value and equity.