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How do you turn products into experiences?

If consumers are buying less stuff and spending more on experiences, then we had better define the word experience.

For most retailers, a good experience is where the product is available and the buying encounter is made pleasant and convenient. It is uninterrupted by frictions around payment, delivery, returns and so forth. But this doesn’t resonate in a world weighted towards activities, such as eating out and travelling. Experience is instead of stuff, not as well as. All of which spells disaster for retail…until you consider how products can be ‘experiencified’.

OK, I made that word up. But there are examples of retailers that are bringing experience into shopping.

Grocers have held up well lately, but fashion retailers have not. That can’t be a coincidence – look at what the likes of Tesco, Auchan and Sainsbury’s are doing to connect food to life’s little moments through their advertising. Compare this with fashion retailers, who seem transfixed by managing prices through an endless discounting cycle. This is flipping tradition on its head; fashion retailers are supposed to do aspiration and occasion dressing, while grocers obsess about competing on price.

Within this lies a lesson. Shifting focus from products to experiences has to start with an understanding of the customer. In this respect, most retailers are still dealing in the generalities thrown up by a shallow analysis of disconnected pools of data, or just focusing on a few high net worth loyal customers. The real deep dive into the big numbers – embracing both structured and unstructured data – is scary, because retailers know that it will reveal insights they probably can’t act on.

No other industry has to be as fleet of foot as retail. Yet no other industry faces such a large and unique set of challenges in getting there. Part of the answer is how retailers act on insight into their customers’ behaviour, and how they collaborate with customers to build mutually beneficial experiences.

Solving this problem is easy for retail brands built on pure experience – like Lego. They do not need to invest any effort into targeting customers. For retailers like Next, M&S and French Connection (who I talked about last week), however, the job is a lot harder.

How can you turn suit or a dress into an experience? More to the point, an experience that works across a store, a PC and a smartphone? And how do retailers build these experiences without killing margins that are already under pressure?

The journey has to start with the customer. Retailers may claim to know them well, but how often do they actually talk to them and canvass their views? The current defaults of focus groups and surveys are clearly not working. But there is a huge untapped resource that does have many of the answers, and that is staff. Retailers need to find better ways to involve the very people they claim to value so highly.


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