EP.86 THE TRANSFORMATION ECONOMY with Joe Pine, Author, Founder of Strategic Horizons, LLP

ABOUT JOE PINE:

Joe’s LinkedIn profile; linkedin.com/in/joepine

Websites:

strategichorizons.com (Blog)

StrategicHorizons.com (Company)

strategichorizons.com (Personal)

SHOW INTRO:

Today, EPISODE 86… I talk with Joe Pine Joe Pine, an internationally acclaimed author, speaker, and management advisor to Fortune 500 companies and entrepreneurial start-ups alike...

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I’ve been in the world of retail place-making for a few decades. 3 would qualify as ‘a few’ I guess. I took a detour for a few years in the late 20-teens, shifting from retail design into the play space of hospitality – a wonderful diversion.

The transition was transformative to be sure. I got to re-imagine what I knew about customer experience place making in terms of retail stores and turn my lens towards another fascination – hotels.

The interesting thing that emerged was the recognition that in the world of retail everyone, brands, and retail designers and architects alike, were all going on about experience. 

Now this in and of itself was curious because I’d been designing stores for a couple decades, and I couldn’t recall one client who had ever come to the game and said – ‘hey lets create a really miserable experience for our customers…’ ‘…Let’s make it hard to understand the assortment, hard to read the labels, bathe the product in bad lighting, have people walk the store not being able to find the thing they came in for, etc…’

Not one.

Ironically though, while many clients never asked for that, we have all had the experience of that exactly being the case in many stores we go to.

So no,… creating a bad experience was never the strategy. We retail designers always sought to create places where positive experience was key. The stuff was important to be sure, but the experience - the emotional residue of the retail interaction - was what was critically important.

The stuff was supposed to deliver on what it purported to do, fit well, wear well, not break down, taste good, make you feel better, whatever… it was supposed to work. Otherwise why buy it?

In some cases, the stuff just had to deliver on its practical, functional level, it didn’t need to give you more than that. It was a commodity that lived up to its promise.

In other cases the stuff delivered on function but gave you oh so much more on an emotional, socio-cultural, psychological, spiritual, level… and all of that is about brand relevance and emotional impact of owning the thing – what it says about you.

It’s like looking at the difference between a paper bag which you could get for about 5 cents and a Birkin bag for which you’d drop $50,000. They both provide the same functional use – they carry other stuff – I think we could make a pretty sound argument that that is true. But now the Birkin bag, well… it is supposed to offer you so much more about who you are, and what tribe you run with and a host of other non-tangibles that deeply connect us to a brand. Things way beyond function.

And if the paper bag got wet and fell apart, well… you could be confident that for the price of the Birkin bag you could literally get a million replacements.

The interesting thing about the stuff, or services, in retail places whether a commodity or something altogether magnificent and magical was that in either case we had to wrap it in positive experience. Mess up the experience and you’ve damaged the relationship. And repairing that rupture can take some time. 

So, experience matters because the overt and subtle messaging that accompanies a shopping trip is important in fostering the long-term connection between a customer, product (or service) and the brand.

The value proposition that determines my choice of one brand or retailer over another can’t just be they have lots of whatever it is at low prices. Price point and SKU count are not differentiators in an economy where you can get virtually anything on Amazon and have it delivered to your door and, as a brand or retailer, you are hoping to engage an emerging cohort of customers who craves more than getting a good deal.

Now... the interesting thing about hospitality is that industry never really sold stuff. You didn’t take home the hotel room (at least not until more recently). You took in, and took home, experience - the body memory and emotional residue of being there. Your stuff, as it were, was a camera full of images and tchotchkes bought along the way during the trip that serve as a conduit or a link to, or a trigger of memories and emotional responses to experiences previously lived.

You don’t bring home the hotel room, though you can now buy the Westin Heavenly bed and all of the linens – I have often wondered why, if I love the room décor, I can’t just walk around with my phone and point it at QR codes on everything and in a flash have the whole thing purchased and sent off to my home or apartment to redo the guest room – or my own bedroom for that matter?

So…in the end retail sells stuff and wraps it in experience and hotels only sells experience though the industry is starting to get it that selling stuff may extend the brand experience beyond the hotel stay into your home….

Another interesting distinction between hospitality and retail is time.

In the hospitality world you spend an overnight or maybe a few days immersed in the brand experience. In a retail store dwell time is often measured in seconds or minutes. This matters because it suggests that retail has to come on strong and be impactful quickly, capturing interest and trying to hold it. Everyone in retail knows the longer the stay the more conversion – larger basket size. Get customers to linger longer and their consideration of other things that were not on their primary shopping list begin to be a little more interesting. 

There are environments that sell spectacle, the digitally immersive environments that we see emerging into the market like Moment Factory Lumina walks, meow wolf, the Monet digital experiences and things like Artechouse. While they are visual captivating, what is being sold is time in the form of 20-minute shows and 2 hour walks in a midnight forest.

Time is the currency of experiences, and more companies should figure out how to charge for it. The both challenge and opportunity here is that in an economy that seems to be time starved because our attention is so fractured into micro moments,  time and attention are intricately intertwined. 

And the rules of basic economics are at play suggesting that the more scarce something is the more expensive it becomes to acquire it. Customer acquisition when pedaling time becomes a costly endeavor. But then time seems to pass by without notice when experience is built on a good story. All good experiences engage the imagination in narrative. We are built for story more than logic though we have believed the at later is the dominant prowess of our species. 

And stories directly effect our neurobiology in remarkable ways that allow the narrative to come alive in us. Remember, that we came to understand the world through dance, rhythm  and stories told around fires for millenia - even before language became a prime vehicle for expression. Our affinity for story is deeply woven into our very beings. So, all great experiences are built on great stories. 

Narrative manifest become brand experience places. 

These places for selling goods and services are like stage sets for stories to unfold. 

I love the theatre and have always felt that retailers and brands should instruct their sales associates to act out their parts in the brand narrative and embrace the idea of theater as a customer interaction strategy. 

I’ve always thought of the theatre as something into which I dove for a time, becoming full emersed in the story and emerged somehow changed. I learned something I didn’t know previously, saw the world from a different point of view, I would become one of the characters in the story and was, may be, in some way transformed. 

Certainly during the performance, I was definitely in and out of body state – no longer me. The world beyond the story unfolding in front of me disappeared for a time.

And so great experiences can also be transformative...

The NXTLVL Experience Design podcast is presented by VMSD magazine and Smartwork Media. It is hosted and executive produced by David Kepron. Our original music and audio production is by Kano Sound. 

The content of this podcast is copywrite to David Kepron and NXTLVL Experience Design. Any publication or rebroadcast of the content is prohibited without the expressed written consent of David Kepron and NXTLVL Experience Design.

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