IRL: activations from (clockwise) Gorillas, Klarna, Makepace and Caspar
IRL: activations from (clockwise) Gorillas, Klarna, Makepace and Caspar
A view from Hayley James

From URL to IRL: how digitally native brands are harnessing the power of experience

Experiential is a way to stand out amid an increasingly crowded digital ad ecosystem.

We are living in a "I want it now" reality. Consumers can have what they want, when they want it. Instant gratification has become an expectation, rather than an exception.

"Uberisation"

This habit of impatience is apparent across most industries. People can order groceries to their door within the hour, watch shows on-demand without the ads, hop in a taxi in minutes and go on a date with a simple swipe. "Uberisation" has disrupted industries globally and has arguably become one of the most popular business buzzwords of our time. The pandemic has given rise to an explosion of direct-to-consumer (DTC) businesses and the on-demand economy, which is fulfilling needs by giving instant access, convenience and personalised experiences to next-gen consumers.

Millennials make up for around half of the on-demand consumers, which means activity and growth will likely persist. According to PwC research, it is estimated that the on-demand economy will soar to reach a whopping $335 billion by 2025. Coupled with this, millennials are the first generation that would rather stay in than go out, which has helped drive this trend.

From URL to IRL

From Stichfix and Bloom & Wild to Monzo and Gousto, what these businesses have in common is that they are digital natives. Born and bred online, these "faceless" challenger brands are growing up and discovering the same truth we all do as we mature: sometimes those who came before us had the right idea.

Initially, these types of brands were pumped full of venture capital, aggressively marketing via paid online advertising in order to drown out the competition. This catapulted many to success, aided by the pandemic, which invited some of the highest sales as people were forced to shop online while physical stores shuttered.

However, the cost to acquire customers online has skyrocketed, coupled by the anti-tracking headaches these brands now face. As a result, many are 'going back to the drawing board', turning to IRL brand experience to acquire new consumers and drive brand equity.

It's what people want

While the pandemic saw a huge boost in DTC sales, these success levels are beginning to plateau as people go on digital detoxes, seeking to get back to a greater level of 'normal' in the real world. Browsing for goods in person is part of this, with approximately 82% of millennials believing it's important for a brand to have a physical store, according to a report from eMarketer.

With growing consumer concerns over screen addiction and a desire to seek tangible, real-world experiences post-pandemic, brands have an opportunity to exploit the multidimensionality and multisensory possibilities of physical spaces in new and imaginative ways - at every step of the consumer journey.

Creating IRL experiences that drive acquisition, equity and retention

As digital acquisition costs soar, we're seeing brands attract new consumers IRL through reactive, hyper-local activation teams - particularly in the meal and grocery delivery sectors. In a crowded digital sphere, this is an effective way to drive awareness and stand out amongst the fierce competition. It adds a personal touch to the recruitment process, delivering experiences that are memorable and drive loyalty.

According to an ICSC study, when a digital native brand opens up a physical store, the overall web traffic to their site grows as much as 45%, leading to a halo effect. As such, we're witnessing a click-to-bricks' expansion trend, with interaction, experimentation and play helping to drive awareness and foster deeper emotional connections with consumers – using smart technologies that unify data. Digital giant Amazon is paving the way, translating it's seamless online customer experience to physical stores, with smaller brands such as Made.com now offering sensory shopping experiences too.

The pop-up shop, although nothing new, has become the go-to test solution. In 2021, self-storage brand MakeSpace launched an instagrammable space in New York's SoHo, offering in-store appointments and meditation space for consumers – a move that made them stand out amid an increasingly crowded digital ad ecosystem. "A lot of people think we're crazy," said Miriam Kendall, SVP of marketing, adding that MakeSpace found that customers wanted an in-person experience based on their feedback. "Why would you open a physical store during a pandemic when 'retail is dead'? But we think differently." Stores have become a form of media – immersive billboards that drive awareness and sell.

These digitally native brands are also producing exceptionally creative experiential moments to gain earned media and grow brand love. To position themselves as the experts in sleep, native online mattress brand Casper hosted a glamping trip during the last total solar eclipse and even set up a pay as you go nap hotel called the Dreamery.

(Casper: The Dreamery lets customers book a nap while testing the brands mattress)

Swedish-based payment provider Klarna create dynamic, shareworthy experiences that bridge the gap between digital and physical. Klarna produced a three-storey museum in London where visitors can follow mankind's financial journey through the ages (to highlight the antiquated credit model of competitors), curated an instagrammable pop-up in Manchester to help consumers realise when they're being sold to and collaborated with some of the UK's favourite brands to launch The House of Klarna. It's these types of curated experiences - ones that cut through and engage on a deeper level - that can help brands build lasting relationships with consumers.

(Klarna: Pop-up museum in London's Soho)

As they mature, digitally native brands are realising that the consumer journey is not linear. It's an ongoing cycle, whereby businesses cannot sustain growth via digital marketing alone. As Diageo's CEO Ivan Menezes explains, "it's not about doing 'digital marketing'; it's about marketing effectively in a digital world".

Here are some key principles for brands who are planning to include IRL experiences in their marketing efforts in the year ahead:

  • Think idea first, media second – having separate budgets for 'digital' and 'non digital' is outdated. Plan your marketing strategy by ditching the D word
  • Zig when others zag – in a world that's rife with 'blanding', it pays to think up fresh and innovative ways to connect with audiences beyond the screen
  • Take a 360 approach – real-world experiences can be used strategically to recruit consumers, as well as to retain them on an ongoing basis
  • Team up – look for like-minded brands to collaborate with to extend reach and provide credibility to play in new creative arenas
  • Test and learn – consider testing on a local level before rolling out larger scale plans with confidence, ensuring that cultural nuances are addressed per market to ensure resonance
  • Combine URL and IRL to maximise success – use technology and the vast level of data available to create a seamless customer experience between the online and physical worlds
  • Know what success looks like – be clear on your KPIs and ensure you have a comprehensive evaluation plan in place before embarking on the work

Hayley James is vice president at brand experience agency Sense New York.