Why retailers that use experiences stand out.

“Just as there is no substitute for original works of art, there is no substitute for the world of direct sensual experience.” - Paul Mellon

Retailers are in a tough spot. Shrinking profit margins. Copycat manufacturing. Fierce competition. There’s no room in the market for good, only exceptional. And being exceptional comes down to just one thing—experience.

Not your background in the retail business, but your personality—your ability to give your customers unforgettable moments that make your brand unique and authentic. The reality is that customers don’t care that your margins are too small or that you were the first one to design a product. It’s not about what’s in it for you, but what’s in it for them.

Modern neuroscience suggests that humans don’t only use their rational brains to make decisions. Instead, we often rely heavily on our emotions. And it’s our experiences that drive what we feel.

More and more retailers are delivering distinct and tangible shopping experiences. Consider the retailer Scharffen Berger Chocolate Maker. According to Reality Interactive, the chocolatier used selfies created on Instagram with the hashtag #wonderfullycomplicated, which were displayed on 50 outdoor digital signage boards in San Francisco bus shelters. The company chose the best selfies and added headlines with adjectives about chocolate, such as “I am sweet, salty and a little nutty.” Since anyone could post a selfie, the campaign reached beyond current customers, encouraging interaction in a fun, social way with the brand while driving new customers to the company’s retail locations.

Winning sales the old way—through price, selection or convenience—is no longer a cure for the retail blues. With a mobile device in every customers’ pocket and sites like Amazon and Alibaba dominating e-commerce, there must be more than these common selling points for customers to take notice.

“As they struggle to survive, distressed retailers can take more desperate measures, including highly promotional pricing that can border on irrational,” notes Moody’s Vice President Charlie O’Shea in a Forbes article. But such tactics help no one. “This leaves stronger firms with the choice of either competing in a race to the bottom or giving up sales in order to preserve margin,” says O’Shea.

But there is a better choice for retailers—you can become an experience-orientated business in which delivering new customer experiences is your business, as much as or more than the products you sell.


Albert Einstein

“The only source of knowledge is experience.”

Albert Einstein


Building the brand

Throughout the history of retail, brands have built their reputation primarily on the image they presented to their customers—the look of their logo, the quality of their products, the ambiance of their store. But in a digital world filled with instant gratification, it’s not looks alone that matter. It’s the feelings the experience generates.

As a retailer, gaining brand loyalty is now as much or more about the experience as it is about the knowledge of what products you stock on your shelves. Highlighted in an article in the Charlotte Observer, retailers O’Neill Clothing and Metal Mulisha use technology to deliver a unique and personalised online shopping experience to their customers. Online shoppers receive personal recommendations—based on where the shopper is located as well as what they click—about items to purchase. The more shoppers surf the site, the more information the system has to make recommendations and the more likely it is that those recommendations will results in sales.

“The software is more advanced than programmes on other sites that make suggestions based on a shopper’s order history,” says Daniel Neukomm, CEO of the retailers’ parent, California-based La Jolla Group. “If a shopper is looking at garments designed as active wear rather than fashion, the software will take into account that. If someone from Wisconsin visits the site, the software is likely to suggest hoodies rather than surfing shorts.”

Since creating this online experience, O’Neill Clothing and Metal Mulisha have seen sales increase 25 per cent. These results are backed up by research from Virtual Incentives, which found that the vast majority of those surveyed perceived brands more positively when offers were personalised. Additionally, personalisation makes a brand seem smart, unique and caring in the eyes of its customers.

Retailers also use experience to develop emotional capital. Lowe’s did this by developing a seamless customer experience across channels. For example, a customer who wants to replace a rubbish disposal starts with a Google search that leads to the Lowe’s website, where she watches a video showing her exactly how to do it. Then by clicking the product page for rubbish disposals, she can see how many units they have in stock at the closest Lowe’s. Next, when she arrives at the store, the Lowe’s mobile app guides her to the right aisle and suggests some tools to make the job easier. And the next time something breaks, it’s almost certain that the positive emotional resonance from that experience will resurface and the customer will turn once again to Lowe’s.

When brands can create positive experiences for their customers, it makes them more charismatic, more connected and ultimately more trusted. And when customers identify with a brand emotionally, they’re more willing to purchase even when the brand isn’t the least expensive or most convenient.

Engaging experiences matter.

According to R “Ray” Wang, Principal Analyst and CEO at Constellation Research, an advisory and research firm, companies that improve engagement have seen:


Improved engagement benefits infographic.

Increase in cross-sell revenue

Improved engagement benefits infographic.

Increase in upsell revenue

Improved engagement benefits infographic.

Increase in order sizes

Source: Influitive

Reset expectations.

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Oliver Wendell Holmes, Jr.

“A mind that is stretched by a new experience can never go back to its old dimensions.”

Oliver Wendell Holmes, Jr.

The clock for reinvention is running out for retailers. By now, investors expect retailers have had enough time to adjust their business to succeed in a digital world, making 2017 a decisive year for many retailers, notes Fortune.

Some retailers, however, don’t need to prove their strong position. Retail giant Amazon, for example, leads in the retail space because of the experiences they offer their customers. On every level, from price to selection to convenience, Amazon exceeds customer expectations and delivers a frictionless experience.

With recent innovations like their Dash programme, Echo, drone delivery and now Amazon Go, Amazon creates emotional moments with its customers by eliminating barriers to purchase. Amazon’s Dash programme makes it as easy as pushing a button to restock commonly used household items. Echo makes it simple to get answers to questions or complete purchases without lifting a finger. And now Amazon Go promises to take the pain out of grocery shopping by eliminating the checkout line wait and instead letting technology confirm the purchase and process the payment.

To create experiences like this and offer content that aligns with the customer, retailers must have the sophistication to define their audience not only by areas like age, geography and income, but also by traits like current location, interests and hobbies, parental status and more. For instance, at REI.com, the home page can be personalised to greet a woman who lives near Lake Tahoe and who enjoys water sports with direct links to canoes, stand up paddle boards and deals on swimwear.

Once customers experience personalised, frictionless experiences, such as those Amazon and REI offer, there is no going back. The expectation is that all future experiences will match and retailers that want to prove their mettle in 2017 will need to step up their game and deliver similar experiences.

Meet your customers’ expectations.

As NBC’s success shows, the media and entertainment industry is at an inflection point. While over 500 million people watched the 2016 Olympics on live TV, digital-only fans grew by a whopping 29 per cent from the 2012 London games to a total of 100 million unique viewers. Based on these trends, media companies that delay or deprioritise a unified digital foundation will have an existential crisis on their hands.


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Personalise the content

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Streamline or expedite the delivery

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Eliminate the friction

Set the foundation.

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Oscar Wilde

“Experience is one thing you can’t get for nothing.”

Oscar Wilde

Delivering exceptional experiences requires a sustained effort and strategic planning. One-off moments will ultimately fall short in achieving a deep relationship with your customer, because they can’t scale across the organisation or be built upon throughout the customer journey.

That’s why it’s important to build a robust digital foundation, including an integrated system for content management and distribution, customer and operational analytics, mobile and cloud. It also requires cross-department co-ordination that helps eliminate the organisational, process and technology silos. “Today, many of these systems are in silos across organisational boundaries of sales, marketing and support—a result of how budgets and decisions are distributed,” notes Loni Stark, senior director of strategy and product marketing at Adobe. “Technology and employees need to align to unify experiences across the customer journey.”

The coalescence of a digital foundation and cross-department collaboration isn’t just important—it’s the future of retail. Take for instance this scenario: A shoe salesperson uses a smart watch to check his store’s inventory to see if they have the right size in stock for a customer. Then as the customer approaches a mirror to see the shoes on, an RFID tag triggers the mirror in front of her to show catwalk footage of models wearing the same shoe with different outfit combinations. Ultimately, this encourages her to buy not just the pair of shoes, but also a co-ordinated outfit, which the sales associate also finds for the customer using his smart watch.

This highly experiential shopping experience doesn’t just lead to upsell opportunities. It increases brand loyalty. It’s the kind of scenario that may feel unique now but will be commonplace in the future. But developing and delivering experiences that are targeted, personalised and innovative such as this one requires an integrated digital foundation. Marketing must build the content for each item of clothing and track that item’s performance, IT must instal and integrate the technology and sales must train to use the technology to enhance the experience once the customer walks in the door.

As this example shows, however, when the investment and effort are made to create experiences across the organisation and throughout the customer journey, these experiences can be emotionally engaging and help define the retailer as a charismatic leader in a crowded marketplace.


Stand out.

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Paul Coelho

“Be brave. Take risks. Nothing can substitute for experience.”

Paul Coelho

Winning at retail has never been easy. The stakes are high. The game is hard. But knowing that customers’ purchasing decisions aren’t based solely on reason, but on the emotion associated with an experience, leaves a wide margin of opportunity.

Now and in the future, retailers must focus on the experience first. They must be charismatic and innovative. And that will mean taking risks and using innovative technology to deliver unforgettable experiences. Customers’ expectations are already reset—and they’re high. It’s time for retailers to reset their own expectations and deliver customer experiences first and foremost. The rest, as they say, will follow.