Why retailers are investing in entertainment

Legacy retailer Gap Inc. made an unconventional hire earlier this year: a chief entertainment officer.

It was a newly created role as the company tapped former Paramount executive Pam Kaufman to helm its entertainment, content and licensing platform. Gap has since rolled out major campaigns, partnering with bands like Just Your Type and building on the success of last year’s ads with girl group Katseye.

“Beloved brands have value beyond the products they sell. Consumers identify with them, trust them and want to be part of their world,” Kaufman told CNBC in a statement. “The key is authenticity: Every extension has to reflect what the brand stands for and give its fans a meaningful new way to experience it.”

She said it’s part of a broader goal to emphasize what Gap calls “fashiontainment,” a strategy to blend retail and entertainment to better align with consumers. Gap is part of a growing cohort of retailers investing in entertainment and experiences both in-store and through exclusive online content to drive engagement.

“Brands are stories, and we are the storytellers,” CEO Richard Dickson said at the Goldman Sachs Global Consumer and Retail conference in September. “I think you could see that come to life when you look at some of the work that we’ve done, putting our brands in the center of culture and cultural conversation.”

In another blending of retail and media, Mattel made waves a few years ago for its “Barbie” movie, building on the intellectual property of a decades-old fan favorite and drawing in massive box office success. At the time, Dickson was president and chief operating officer of the company, witnessing firsthand the sectors’ intersection before departing for Gap.

“I think the post-Covid consumer attitude around shopping certainly evolved a lot,” said Bryan Eshelman, who leads the retail practice at consulting firm AlixPartners. “It has gone from shopping as a fulfillment task to shopping, in many instances, more as an entertainment form.”

Between experiences in physical stores and media campaigns featuring exclusive content, Eshelman said, retailers are getting more creative about the ways they’re driving engagement and marketing.

“Community, at the end of the day, is one of the key ways to drive loyalty, so I think retailers of all types are trying to tap into some sense of community, some sense of lifestyle, some sense of belonging that’s beyond the product that they offer,” he said.

Branded entertainment has been around for a long time. Procter & Gamble made headlines in the 1930s for helping to coin the term “soap opera,” and companies have for decades created media campaigns to draw in customers.

But with the rise of social media, content creation and short-form offerings, experts said audiences are becoming hungrier than ever for something new and original.