Today, many of the world’s largest companies are not sure what to do with themselves, or how to spend their mix of advertising, web and retail budgets.
Many clever companies have already figured out that our society is in a transition from a transactional to an experiential economy. Buyers want to “buy in” to the firms they give their money.
Other companies clearly don’t get it. When leases and payment terms dominate your advertising, you are selling a commodity. Soap companies figured this out decades ago, but even today, most car companies haven’t. One might argue that a commodity approach doesn’t bode well for long-term success.
The experiential model approaches the sale from a different perspective. In this strategy, a company’s goal is to make you believe you are an integral part of a community of like-minded people buying into a lifestyle created by their brand.
The numbers don’t lie. Here’s the Market Cap of eight major companies today. Which ones provide a quality retail experience?
$629 billion – Apple $375 billion – Microsoft
$28 billion – Tesla $52 billion – General Motors
$448 billion – Google $147 billion – IBM
$216 billion – Facebook $256 billion – Amazon
Why is Apple worth double that of Microsoft? When GM sells 75 times more cars than Tesla, why is their Market Cap only twice as much? These are not simple questions with simple answers but, no doubt, customer experience is a major factor. Firms improving their customer experiences will likely prosper in the future.
I’ve had the incredible opportunity to work with some of the companies mentioned here, in their retail endeavors. They all want to present an industry-leading face to the public through their advertising, web and retail presence. Most are better at advertising and web presence, yet need to improve the quality of their retail experience.
Retail efforts can make the biggest change in public perception. Let’s delve a bit deeper into the numbers. TimeTrade, a retail industry analyst, published the following survey results:
- 53% of shoppers don’t know exactly what they want when they enter a store.
- 90% of shoppers can’t find the right store associate to help them find an item.
- 60% of shoppers buy more when they’re helped by a knowledgeable associate.
- 91% of shoppers would return to a store where they were helped by a knowledgeable associate.
- 80% of retailers surveyed reported major sales increases when shoppers get the attention and insightful recommendations they need and deserve.
No advertising or web campaign can promise such numbers. This is why retail is and will continue to be important in the future.
Now what makes for a good retail experience?
The Themed Entertainment Association (TEA, www.teaconnect.org), a respected industry group of designers and fabricators, promotes the following concept:
Storytelling + Architecture + Technology = Experience
It’s an important one, and it’s one reason why theme park technology pervades much of our modern culture. Walt Disney figured it out 60 years ago. Customers want a safe, clean and respectful environment. They want a place slightly disconnected from their own day-to-day experience. They want a place where things work the way they are supposed to work without complication.
Customers now want to be part of the story. They want a pleasant architecture that is uniquely suited to their needs.
The good news is that technology is a key aspect of this experience and is our industry bailiwick. They want their kids entertained while they discuss purchasing options. They want terminals to visit websites. They want fast WiFi for their phones. Most importantly, customers want serious people who can help them with the right tools. All with a bit of a magic curtain between them and the backstage hardware.
Advertising and websites can be implemented quickly, often in months, based on their level of sophistication. Immersive retail stores take longer. It has taken Apple more than 14 years to roll out 461 stores, and Microsoft’s 116 stores have taken six years to roll out. It takes Disney five years to build a new theme park. It is not easy finding the right place and building the right experience. Yet, done well, it can be highly profitable.
Each of these nearly 600 stores provides a pulse back to its respective motherships. When manufacturers have complete control of the experience, they quickly learn which products will be successful and which ones will not. They learn which features are the most interesting to customers at the appropriate cost and efficiency. Perhaps most importantly, they learn what does not work well quickly.
Consumers are making their final purchasing decisions in the store and want their experience personalized. Technology is an inherent part of the experience, and we are uniquely suited to provide it.