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Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

This past festive period continued the trend of breaking all records for online sales – but predictions about the growth of online shopping leading to the demise of the physical shopping trip seem to have been far off the mark. The high street continues to draw shoppers in their millions, seeking physical experiences that are as much about satisfying the need for leisure and entertainment as the purchase of products.

Customers are demanding enhanced experiences in their face-to-face store visits, so where will retailers turn for expertise in ramping up the physical experience? The arts sector is of course the natural answer – being brilliantly placed to help retailers understand how to deliver memorable and shareable experiences.

I predict that in 2016 new partnerships with the arts and cultural sector will deliver the next big development in experiential retail.

Omni-channel retailing

This mix of physical and digital experiences that we’re seeing is termed ‘omni-channel retailing’, and retailers are working hard to keep one step ahead of their competitors.

Burberry has been at the forefront of this development, creating shops that merge the physical with the digital. Its Regent Street shop has blurred the physical and digital world to create 'Burberry World Live', an integrated shopping experience featuring a 22ft-high screen, nearly 500 hidden speakers and a hydraulic stage. RFID (radio-frequency identification) microchips are embedded into certain clothes. Customers wearing the microchipped clothing can look into a mirror-like screen revealing how the garment would appear on a catwalk.

The growing customer demand for memorable omni-channel experiences has led to some surprising new entrants into the physical retail world. 2015 saw Google open its first-ever branded shop, choosing the Currys PC World on London’s Tottenham Court Road as its pilot store. The Google shop sells the company’s phones, computers and TV products, as well as hosting masterclasses showing consumers how to use the devices, and demonstrations showing off key Google apps.

We’re now starting to see retailers create omni-channel experiences for key seasonal events. The John Lewis Christmas campaign is fast-becoming a Christmas tradition. Walk into a store and the 2015 Man on the Moon campaign is brought to life in a customer experience. In Spain they have a similar tradition for their National Lottery, elGordo. This year, the beautiful short film Justino was one of the most shared adverts of all time and the central character has been brought to life in physical retail outlets. In London, M&M World has created a retail experience which is as much about entertainment as it is the purchase of confectionary.

Ogilvy Labs (the innovation arm of Ogilvy & Mather) recently completed their Retail Semester – exploring how the sector is innovating to keep up with increasingly demanding customers. One of the key themes emerging from the presentations was that creating face-to-face customer experiences is vital to retailers not only because of the value to audiences in-store but also because of the huge value of customers sharing their experience across social media platforms. Sophie Turton from eConsultancy, who spoke at one of the learning talks, noted that:

“Instead of creating content, retailers should be creating opportunities for content creation – instagrammable moments, inspiring experiences.”

The restaurant sector has done a great job of responding to growing customer demand for experiences. The latest trend is the ‘chef’s table’, placing customers at the heart of the theatre of a busy kitchen. One of the most popular is Marcus Wareing at The Berkeley which features a stunning chef’s table that lets diners watch all the activity and precision of a Michelin-starred kitchen team.

So in 2016, as retailers look to deliver the next big thing in experiential retail, they’ll start to reach out to the arts and cultural sector for inspiration. Interest from retailers will be matched by arts and culture companies wanting to approach audiences in new ways as well as exploring new forms of revenue.

Immersive drama

In the UK, Punchdrunk has pioneered a game-changing form of immersive theatre in which roaming audiences experience epic storytelling inside multi-sensory experiences. The theatre company previously teamed up with Absolut to create Silverlight, an immersive game/theatrical experience.

You Me Bum Bum Train has also won huge critical acclaim, taking experiential drama to another level creating sell-out immersive theatre sensations with a cult-like following. This trend for immersive experiences is also seen in the hugely successful Secret Cinema, a British events company specialising in live cinema experiences, combining film screenings with interactive performances in purpose-built sets.

At Nesta we recognise the potential of these types of collaboration. For the past three years we have been working with Arts Council England and AHRC on a Digital R&D Fund for the Arts – supporting over fifty amazing experiments – all partnerships between arts organisations and technology companies.

Through the project some amazingly innovative ideas have been brought to life. The newly created NetPark in Chalkwell Park in Southend (a collaboration between Metal, the University of Brighton and technology partner Calvium) is redefining the public park experience. Free public Wi-Fi provides the basis of a digital layer offering local artists and performers the chance to create new forms of digital/physical experiences. In some of the resulting work, trees come to life and talk to you, patches of grass are transformed into other worlds and amazing stories are told.

Other R&D projects have worked with iBeacon technology linked to mobile devices to allow arts and cultural venues to create content pin-pointed to where audiences are positioned in a particular space. The opportunities for retail spaces to be brought alive with experiences imagined by artists and performances are huge.

Very soon we’ll look back and remember when shopping without the help of the arts and cultural sector seemed a very boring experience indeed.