As trailed in last week’s post, I want to spend a bit of time over the next few weeks exploring some of the ways in which retailers and hospitality businesses might break out from the ‘doom loop’ of rising costs and subdued consumer demand which has been so much talked about in business circles recently. After all, there is no point just diagnosing an illness without at least trying to come up with some prescriptions.
Over time the series will cover a range of tactics that might work for different businesses. Hopefully one or more of them will be useful in yours.
We kick off, then, by revisiting a topic that regular MT readers may remember that we touched on almost exactly 2 years ago this week - how we can use ‘experiences’ to engage with customers and lift ourselves away from the low-price competition of the internet.
Much has been written the ‘experience economy’ and about how consumers have come to value unique, unusual or personal experiences over just product purchasing. In the music business, for example, the old business model where bands toured in order to sell albums has almost entirely reversed - they now put out albums in order to justify concert tours because the profit from filling a stadium far outweighs the pittance that Spotify pays.
Turning a store from being simply an outlet where goods on shelves wait for customers to pick them up into a place where people come because what is on offer is a richer experience can be a vital tactic to differentiate your store from others, and also, critically from the bland experience of buying online.
That’s all very well, but if you run a butchers in Walthamstow or a haberdashery in Burnley you aren’t likely to sell out the O2 any time soon, so how does this ‘experiential’ concept leap out of the text book and become relevant to you?
The answer comes from remembering that the point of an experience is that it is personal, fleeting and adds something to to the basic process of buying a product. It doesn’t have to be grand, and doesn’t even have to be something you do all the time for every customer - if it gets you talked about on social media or in local conversations, that free marketing can be worth it all on its own.
I had two experiences on Saturday in the town I live in which illustrate the breadth of the options available to us as High Street businesses.
The first was a ‘classic’ experience. An art gallery wanted to celebrate a new artist’s range of works, had flyered the local area inviting people to an evening opening and was, when I passed, stuffed to the gills with people. It cost them the staff costs of a late night opening and half a dozen bottles of Prosecco, but will have brought people into the shop that had never been there before. And crucially, the business case for the event will extend far beyond the margin on any product they sold on the night - by putting themselves ‘on the map’ locally they will reap rewards in the future too.
So far, so classic. The second ‘experience’ I had, though, was so much more normal that many retailers reading this will object that it isn’t anything out of the ordinary at all. Visiting a builder’s merchant for a very specific paint, I was quickly out of my depth (not difficult where DIY is concerned) and needed help.
What followed was what can only be described as the ideal DIY colleague experience with someone who not only knew their stock inside out, educated us on the benefits of the different types of paint we could have chosen, asked us about the building project we are engaged in and offered, quite without prompting, to help us with some wood-cutting we need doing even though it isn’t a service the store offers.
We left with a totally transformed view of that particular chain (which I had always thought of as a bit second-tier) and will certainly go back regularly. That might not be the kind of retail experience that makes it into a conference speech, but it was invaluable for that customer and no doubt is for many others too.
So whether ‘experiential retail’ for you means:
late night opening and exclusive product showcases
product demonstrations and teaching sessions
collaborations with other retailers in your area or with charities and other local organisations
the creation of ‘social media moments’ in store where customers are encouraged to share their images of your displays or product ranges
or, frankly, just a nice chat about the weather and how awful the parking is
these are all ways in which you can take the basic transactional act of buying a product from you (which can easily be replicated more cheaply by someone with more scale) and turn it into a moment in their day which matters to them (and which can’t be replicated nearly so easily).
None of these things by themselves will stem the tide of rising costs or suddenly turn a struggling business into a profitable one, but it is amazing the number of retail and hospitality outlets which still persist in offering a boring, undifferentiated and impersonal transaction and then wonder why they are losing share to massive online competitors.
It is worth, then, considering how you can make your store, cafe or restaurant stand out from the crowd by making the experience a special one.
Paradoxically, that is a challenge which in many ways it is easier for an independent retailer to do than for a big chain. As an indie you are in store yourself, your customer insight comes from the fact that you literally recognise your regulars and your staff are hand-picked. For a chain, harnessing customer data and empowering colleagues in hundreds of locations around the country to create those ‘retail moments’ is much harder, and a challenge I know many wrestle with. There is a prize worth winning, though, for those who get it right.
The second in our Thrive in 25 series (which will be in 2 weeks) looks at another strategic option which spends too much time in conference presentations but could help you in the real world too - personalisation.