Why retailers should be thinking about Locavores and the experience economy (2 of 2)
Part II: Making your customers your greatest advertising asset
Inc. contributor Ane Gherani recently wrote about the declining effectiveness of online advertising, and how it can be offset by turning consumers into brand advocates. This isn’t breaking news, but it bears consideration day to day.
With consumers equipped to market on brands’ behalves, brands need to step up their game and invest in experiences that their consumers actually want to share,” Gherani says. “From storefronts and pop-up shops to innovative expo booths and interactive insta worthy subway ads, the experience economy is set to be the most lucrative brand channels to tap into.
The opportunities to boost customer engagement are limited only by the human imagination. (Which is to say, they’re limitless.)
Catalyze social bonding and social media to turn customers into advocates
DoubleTree by Hilton has saved millions a year on advertising using a simple, memorable “Talk Trigger” (a term coined by author and marketing consultant Jay Baer). By providing each guest with a fresh-baked cookie upon check-in, the upmarket hotel chain has created a powerful word-of-mouth marketing machine. Similar examples abound in B2C (business to consumer) customer service and marketing.
MSC, a full-service real estate brokerage firm specializing in retail, recently wrote that “With the infiltration of social media into everyday norms, millennials have created a craze for a whole new type of retail experience driven by entertainment.” MSC sees this as a paradigm shift for small shop retailers.
Social media might get too much credit for the shift towards experiential retail. Still, encouraging social sharing is a comparatively low-cost way to boost sales for two reasons:
- People are becoming numb to digital marketing. Those channels are oversaturated and consumers are more interested in their friends’ activities and recommendations than ads.
- For better or worse, fear of missing out (FOMA) is driving many consumer choices. As McKinsey & Company recently explained:
Keeping up with the Joneses used to be about wanting to own the same expensive products your friends or neighbors did. But with more consumers opting for experiences—whether that means seeing the musical Hamilton or visiting Hanoi—and sharing their stories and pictures online, people feel peer pressure to join in or keep up.
Make ‘em laugh.
The excellent bestselling business book The Power of Moments by Chip and Dan Heath talks about how businesses can create experiences that have an outsized influence over overall customer satisfaction. It’s surprising how often these experiences come at little to no cost.
For example, Southwest Airlines’ flight attendants are known to deliver funny flight safety announcements. I experienced one that could have passed off as a legitimate stand-up routine. The Heath brothers noted that Southwest collected and analyzed data to see how these script-breaking spiels influence spending.
The data showed that travelers who heard a funny flight safety announcement bought an extra half flight per year (on average) compared to those who didn’t. The data nerds figured if the frequency of funny announcements doubled, it would boost annual revenue by $140 million!
$140 million return on an investment of $0!
McKenzie report we referenced earlier also talked about the many opportunities this shift in consumer behavior creates.
- Specialty fitness concepts like high-intensity interval training, Pilates and yoga studios are outpacing traditional healthclubs.
- Similarly, “comedy clubs, piano bars, acrobatic performances, and [themed] dinner shows” are increasingly sought out by consumers.
“Shared experiences with friends and family” are key, the report states. But in several ways, shared experiences are what retail has always been about.
Bonding over experiences and “stuff”
Buying your first suit with dad is a fond memory millions of Americans share. Mothers and daughters aren’t going to suddenly stop going on retail excursions to buy shoes and clothes because we’ve become more efficient shoppers. These are uplifting bonding experiences that have spanned generations.
Although millennials have pioneered this change, brands embracing customer focused, unique, and experiential retail will attract consumers across generations, keeping the world of retail alive and well.
That captures a key point we’ve repeated over the last few months. Retail isn’t going anywhere, but retailers in general need to master multiple touchpoints, providing consumers the combination of convenience and physical experiences that is increasingly in demand.
In many ways, retailers are simply being called to take things they’ve always done well and find creative ways to elevate them. From that standpoint, the experience economy sounds less daunting and more exciting. Consumer subsets like locavores can in fact be your most engaged customers.
Save time, save stress, increase your profits.