Insights

From Service to Experience

Business Director, Commerce & Retail
Valtech DK

August 14, 2016

Going into a store and buying something was once considered an experience  in itself. However, today’s craving connected customers are demanding something much more special and memorable. But how can retailers deliver these memorable unique experiences?

Growing innovative technologies are causing brutal changes in our economic landscape. The new competitive environment is becoming tougher for more and more retailers, making them rethink the way they capture and deliver value. However, in today’s experience economy, it is critical that retailers deliver meaningful experiences that captures the value for customers in this digitized society, since experience is becoming ‘the product’, and it is no longer enough to deliver a good product or service.

Many retailers are already competing on experiences by wrapping them around their traditional offerings, in order to sell better. According to Pine and Gilmore, customers are mostly attracted to the quality of an experience, rather than the quality of the product or service itself.

Experiences have typically been lumped in with services; however, they are two VERY different offerings. An experience occurs when a company intestinally uses services to engage individual customers in a way that creates a memorable event.

One way to think about experiences is across two dimensions. One that represents participation. At one end of the spectrum we see passive participation, were customers don’t influence the performance whatsoever. They are simply experiencing an event as observers or listeners. On the other end lays active participation, here customers influence the performance. They play an important role in creating the performant or event that yields the experience.

The second dimension represents connection, which joins customers with a performance or event. At the top of the vertical line, we see absorption, were customers attention is occupied by bringing the experience into their mind. Last on the spectrum is immersion, which is when customers become physically part of the experience itself.

Furthermore, the model consists of four types of customer experiences, termed the four E’s. As shown in the illustration, the four E’s are differentiated by the type of customer involvement.

The passive participation of a customer in an experience characterizes the Entertainment as well as the Esthetic, and active participation characterizes Educational and Escapist experiences. Finally, as shown in the illustration, customers typically absorb entertainment and educational experiences, while immersing in esthetic and escapist experiences.

An experience can be built upon one of these elements, but most memorable experiences will try to include all four E’s, which is likewise linked with activation of customers senses that can also be used to create a special experience.

Bringing the passion of sport in the store - Adidas

Footwear is the heart of Adidas, which is placed in a central spot, were customers can check out the latest footwear and experience the brand store in every format available 2-D and 3-D.

Adidas concept consist of an interactive table with touchscreens, were customers can place a physical shoe on the table next to the screen and the bar will recognize the product showing a 3-D version of it. It also give customers the possibility to zoom in and check out the product from different angles. Moreover, customers can view product details and learn how the shoe can maximize their performance, and actually try it out in their performance stores on a treadmill!

This is a unique way to create memorable experiences in the customers’ minds, were they are able to actively interact with the product and experience what it means to be part of the brand.

The magic mirror – Neiman Marcus

Some retailers, like Neiman Marcus, are experimenting with virtual dressing rooms. A concept consisting of a mirror, which makes it possible for customers to view clothing in different colors, by simply selecting the color on the mirror screen, and even compare several outfits – No need to leave the dressing room anymore! Some have even made it possible to select the environment of a fitting room, by changing the lightning to see how an outfit will look for an office or a dinner look. It’s also a smart method to collect useful data about customers shopping habits and preferences.

Some customers tend to be discouraged to go to the dressing room and try on different outfits. But this innovative technology makes it fun and entertaining to try on clothing. It is changing customers’ entire in-store experience.

Memorable experiences is the new thing! My advice to retailers would therefore be to include some of the four E’s in order to create a memorable experience. Retailers should constantly look for new innovations that would appeal to customers and transform their in-store experience. Linking the virtual world with the physical world, to create a connected memorable experience.

Products are tangible, services are intangible and experiences are memorable!