The concept of selling experiences
by Michael Smollan. Entertainment and escapism all sweep onto centre stage as the spotlight shines on the experience economy.Wednesday, 23 Mar 2022
by Michael Smollan. Entertainment and escapism all sweep onto centre stage as the spotlight shines on the experience economy. These two elements offer compelling selling points as the focus is on memorable experiences, rather than just products.
For me, the shopping experience that is able to entice, distract and immerse me (where it’s part theatre part product value) is where you will find me. Partnered in the end by the basket size and repeat purchase frequency; experiences have become a distinct economic offering where they are their own category just like “goods” and “services”.
As the pandemic challenged everything and everyone, consumers are making clear the values they wish to see retailers and brands authentically portraying. From living healthier lives to making choices that partner the planet. So too, they want so much more from brands and services – from sustainability to purpose and even down to using safer ingredients. This is where brands and retailers have to be wide awake to retain loyal consumers which have fundamentally changed over the past two years.
The experience economy is all about consumers wanting a reason to go somewhere and a reason to buy a product or invest in a service. We know that the customer experience is one of the most important differentiators between a retailer and their competitor, making greater shopping experiences so relevant going forward. Ulana van Biljon, Emira Property Fund COO, noted that 97% of South African retail sales in 2020 took place in the physical space where customer experience was the defining success factor. “The experience economy – being in a physical space and enjoying that space – is what South Africans crave and value the most. People go to malls and stores not just for shopping, but for the experience,” says Van Biljon.
Part of the reason that some players are way ahead of the pack is that they think of retail in three dimensions versus the traditional two. Those which have combined the customer experience and the best possible route to purchase, have built a retail ecosystem around customer purchase patterns by using physical, digital and customer data. This is the only way that the modern customers’ ever-increasing needs will be met, and ultimately expectations exceeded.
The personalisation of my shopping journey is where the experience economy offering kicks in. Where retail seamlessly ebbs and flows in a timeous way (pretty make or break for me if that is done badly), and where retailers and brands obsess about drawing me in, allowing me to be part of an immersive experience, and ultimately not letting me down by the after sales service.
It’s no longer just about price or quality anymore. Instead, it’s about a whole list of values amplified by the fact that, up was down and down was up as we navigated the pandemic. So too the digital experience is forcing retailers to evolve their strategy to avoid getting left behind as old style retail models just won’t cut it anymore.
Pine and Gilmore founded what they term their ‘thinking studio’, coining the term ‘experience economy’ back in the mid-90’s. Their insights then are still relevant today: they noted that for customers, it’s not only about the exchange of money, but instead they want to experience some kind of interaction, and they want to feel seen. Where they feel less like a chequebook and more of a participant. Successful businesses competing in the experience economy include H&M’s ‘selfie mirror’ that is fully integrated with social media apps. Through voice activation it allows shoppers to browse fashion recommendations or take a selfie which can be downloaded and shared to a customers preferred social media platform. The ‘Endless Aisle’ is a kiosk developed by Ombori, that assists customers who can’t find a particular item in-store by offering engaging touch screens and QR codes that connects customers to exactly what they’re looking for. This system can integrate interactive maps, delivery options, payment systems and promo material.
So too, sustainability for conscious consumers is a big plus, for example, chocolate makers Coco Pzazz offer micro-loans to support farmers in West Africa and South America, enabling individual growers the chance to develop their own chocolate farms. This undoubtedly influences the experience economy for consumers at a really visceral level. Large retailers in South Africa such as Pick n Pay and Spar are aggressively pursuing sustainable packaging goals that enhance the appeal of their products for many shoppers.
Main image credit: Pixabay.com.
Michael Smollan is Chief Growth & Innovation Officer of Smollan. Smollan is a leading retail solutions company that delivers growth for retailers and brand owners across five continents by covering every aspect of how their brand is managed at the point of purchase, from field sales to in store and digitally. Smollan partners with brand owners and retailers to deliver accelerated growth by increasing reach, driving availability and visibility, increasing efficiency and delivering superior shopper experiences; operating across emerging and developed markets, in modern and general trade, and across physical and digital channels.
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