Call it serendipity or the zeitgeist of our times, but I recently ran into my old friend Ken Nisch at the NRF Retail’s Big Show. Ken is a retail brand architect, as well as a licensed architect leading JGA, a firm that designs retail spaces. His firm works with a long and growing list of exceptional retailers. Then a few days later, I ran into him again at Luxury Daily’s FirstLook conference. We both commented that everybody is talking Experiential Retail, but too few seem to be translating that “Experience” into actual strategies that will make real and meaningful experiences for customers.
Then a few days after that, Robin Lewis posted a story, “Branding by Another Name: Empathy” about a new book, Brand Management Strategies: Luxury & Mass Market, by Bill D’Arienzo. Robin wrote:
“According to Bill, we live in an era that should give a voice to the dreamers. He believes marketers need to provide hope and possibility as part of how brands project themselves to their audience. I am known to be an irascible cynic, but based on what’s going on these days, hope, possibility, and dreams sound like a good thing. I’ve ranted for some time now that our business culture has become a tactical, utilitarian transaction, creating, according to Bill, a generation of brand atheists.”
It made me realize that the hope and possibility Bill and Robin are talking about is the essential customer experience that Ken and I discussed. Those retailing and luxury experts we met at NRF and FirstLook were largely pursuing more tactical, utilitarian solutions to the retailing problems that go far beyond such easy programmable fixes. As Robin said, “What needs to change is perception, transitioning from tactical and transactional thinking to relational thinking.”
So I reached out to Ken to follow up on our preliminary discussion and delve more deeply into how retailers, especially in the luxury space, must open their minds to “shift from a product mentality to a customer mentality,” as Robin writes. This is where the transformational Customer Experience can be found. And it’s not about more data or technology, but about more feeling and emotion.
Experiential Retail Doesn’t Go Far Enough
As Robin wrote, we need a radical change in our thinking to grasp the many dimensions of Experiential Retail before we can ever hope to implement it in the shopping space. “We all seem to understand the idea of experience, but I don’t think it goes far enough to create relevance for stores today,” Ken states. “The origin of the word ‘store’ is ‘storage.’ A retail store has been a place to collect and arrange things in anticipation of a transaction. Today the store must be a collection of ‘stories.’ So much time and effort in retail today is spent trying to systematize, organize and create consistency, but we’ve lost the human element of surprise and delight that should be our goal.”
We need a radical change in our thinking to grasp the many dimensions of Experiential Retail before we can ever hope to implement it in the shopping space.
Across the retail landscape, Ken sees retailers deploying experiential retail concepts following a similar set of rules, which at first might have surprised and delighted customers, but today have become ho-hum. “It seems like everyone is following the same kit of parts in the name of experiences; things like every store has a coffee bar or a workshop on the sales floor,” Ken explains.
“The tools that retailers are leveling experiences against are falling into the same bland ubiquity that has resulted in the sad state of retail today. We have become too focused on information, data, CRM and one-off ideas, like the coffee bar, as a substitute for the personal and imaginative,”Ken says.
Time for Imagination Retail
“It’s time for the Imagination Economy, rather than the Information Economy,” Ken enthuses. And it’s time for Imagination Retail, not in the Disney or Las Vegas sense where the experience substitutes for the real thing, but rather tapping into imagination that sets you up for what you are going to see or experience. Ken explains Imagination Retail becomes a mind opening, rather than a mind closing experience, as is so much of retail today.
He points to retail associated with experiences, like zoos and museums, or outdoor/expedition retailers, like REI or Patagonia, that prepare you for an experience you are looking forward to or are excited about. “Whereas traditional retail is at the end of the ride,” Ken says, “think about retail at the front of the ride, to get you excited about the experience to come. Some food stores do this, presenting the ingredients together that you’ll need to cook in anticipation of your dinner party.”
People’s imagination is tantalized and their excitement and engagement grows in anticipating the experience to come, as cited by research led by lecturer Jeroen Nawijn and published in the Applied Research in Quality of Life journal. People’s vacation happiness peaks during the eight-week period before their holiday experience rather than afterwards. Retailers’ greatest opportunity today is to get out in front of the customer’s experience and help them anticipate an exciting experience to unfold.
Ken points to a successful example of Imagination Economy retail: the Dover Street Market, launched first in Mayfair, London, and recently expanded to Lexington Avenue in New York. The Market creates anticipation for new polymorphic, cross-cultural shopping experiences by closing up a couple of times a year to reboot the concept with new things to do, see and experience that mixes and matches heritage, price point and culture.
Or the store, STORY, on Ninth Avenue in New York, that completely reinvents the layout and theme of the store every six to eight weeks. A totally new range of merchandise is curated around stories for its young, urban shoppers to make the offerings important to know about and experience.
Ken also sees the faux-Paris experience offered in Las Vegas as potential for a retailer to set up a shop that will get people excited to go to Paris. He asks, “What kind of things and experiences would such a shop offer that communicates the true passion to go to Paris, rather than just gives them a substitute?”
Stop Looking in the Rearview Mirror and Look to the Future
Much of luxury retail is failing because it is too backward looking. “Luxury brand stores may tell me everything that has happened. But it is all about looking backward, not looking forward,” Ken says. And it is because of that rearview mirror approach that luxury brands are missing out with so many millennials.
“Millennials live in the future, not in the past,” Ken reveals. “They are thinking about the job they don’t have yet, the trip they haven’t gone on, what they are going to learn. They are future-forward, whereas Boomers tend to think about what they have or what they’ve done. Retail needs to be more about looking forward, not looking back.”
In reimagining retail for the Imagination Economy, department stores have the biggest opportunity, yet they are held back by their conventional 20th century, storehouse, transactionally-oriented thinking.
In reimagining retail for the Imagination Economy, Ken believes department stores have the biggest opportunity, yet they are held back by their conventional 20th century, storehouse, transactionally-oriented thinking. “Think of the great department stores at the beginning of the 20th century or the movie palaces of the 20s and 30s. They took people to places to see things that they never thought possible,” Ken says.
“The time is ripe for retail to help people opt out of their three-dimensional real world to find a better place. Transport them to ‘somewhere over the rainbow,’ into a fifth-dimensional imaginative world with a little bit of reality stuck in. The technology to create virtual digital environments for luxury brands is here now. All it will take is a brand or retailer to construct a virtual imaginative place that can be the setting for a new kind of shopping experience,” Ken continues.
So KaDeWe becomes more than just a store to buy things. It becomes a place where meaningful experiences happen.
Berlin based KaDeWe, a heritage department store founded in 1907, is fast-forwarding into a 21st century future. It has devoted one floor to an “Idea Shop” where people can express their creativity and imagination through arts and craft experiences. Along with displays of a seasonal selection of the latest trends in textiles, handicraft, jewelry, art material, home decorating and stationery, customers are invited to make things themselves with craft materials.
“It’s a place where people can meet people and make ‘store friends,’” Ken explains. “They can collaborate to make things and take things away. They call it the ‘happy floor’ because it is designed to give people an experience that makes them happier, calmer and emotionally engaged.” So KaDeWe becomes more than just a store to buy things. It becomes a place where meaningful experiences happen.
Ken cautions that it is time to move beyond data, algorithms, and predictable retail. Instead, imagine the kind of experiences people will pay for that make them feel engaged, surprised, invigorated, and rewarded. Otherwise, they will be stuck in storehouses filled with stuff but empty of shoppers.
Ken warns, “Retailers are so focused on looking at the world through the rearview mirror that they are doomed to miss the edge of the cliff on the road ahead of them.”