Photo by Patrick Tomasso on Unsplash
Welcome to the experience economy, your real chance to changing the rules.
Actually, it’s been here for a while now. The term was first coined by Joseph Pine and JamesGilmore some 20 years ago, using the crude example of coffee consumption to illustrate the point. What starts as a 50 cent cup of liquid buzz now costs significantly more because of the theatre and craftsmanship that goes into preparing your daily cup by a skilled barista.
In rural Australia right now, especially in drought affected regions of NSW, QLD, SA & VIC, businesses have resorted to drastic measures to try and get the attention of cash-strapped consumers. The most common measure is ‘always on’ price discounting, which, unless you have very heavy pockets full of capital, only ends in ruin and tears.
In this extremely competitive environment, simply having a product or service and heavily discounting it is not enough; to differentiate yourself you need something else to maintain turnover and profit. Consumers today, especially the millennial, want a positive and personalised experience to sweeten any deal. To demonstrate why a personalised experience matters, let’s compare a pair of jewellery retailers.
78% of Millennials prefer to spend money on a desirable experience, not "stuff".
Let’s say you are looking to buy some earrings for a friend and you are standing in front of two stores, both selling quality earrings. The first one is a simple store with red sale signs everywhere. The prices are cheap, so you could go in, choose a pair of earrings, pay for it and leave.
The second store looks more stylish than the first, but it is beautifully decorated, there are uniformed sales assistants being extremely helpful and friendly. Capitalising on the multiple earrings trend and the fact consumers want to adorn their ears with lots of different pieces, but often can’t try earrings on in store, this retailer is clearly inspired by beauty bars, where customers can freely pick up skincare and make up products and have a play without needing to ask for assistance. You notice it’s an ear styling bar and one of the friendly sales assistants asks if you would like to try on a stack yourself. They also pamper you with a little champagne and delicacies, music is playing, there’s free WiFi and the wall behind you is decorated with images of real people, just like you, showing off their creative earring stacks.
Some people might say the first store, but research shows that more and more people are choosing the second store – where the experience is superior.
The secret to this retail success? Quite simply, the second jewellery retailer it is not afraid to do something different and look to sources outside the industry for inspiration. The best thing is the above scenario is actually based on a real case study. Astrid & Miyu in the UK was traditionally an online-only retailer until it launched two pop-up store concepts that have completely transformed the physical retail side of the business.
It’s a brilliant yet simple idea that focused first on delivering a valuable and memorable experience, long before trying to drive the sale.