Experiential Branding and the New Horizons of Retail Management

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Experiential Branding and the New Horizons of Retail Management

Thomas Brownlees

CEO and Founder,
440 Industries

Introduction

Any brand wishing to compete successfully in the fashion industry needs to answer a fundamental question: what experience am I providing to my customers?

To answer this question, a brand manager needs to consider a variety of issues belonging to marketing, psychology, retail management and philosophy. The first issue, however, is to even try to define what we actually mean by experience.

This term has been used extensively as it helps to shift the focus of management from the physical to the intangible aspects of brand communication. At the same time, using this term without a full awareness of its meaning can lead to confusion.

In this post, we are going to discuss how customer experiences can be defined and what can be done to create a consistent promise of value which will resonate with our target audience.

In more detail, we are going to address the following points:

What we mean by experiential branding
How experiences redefine purchase decisions
How can companies plan, promise and deliver their brand experiences
Conclusions

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1. What we mean by experiential branding

In the words of academic literature on the topic, an experience can be defined as an event which is both meaningful and memorable. The concept of experience can be used to describe a variety of situations in our lives, however recently, the concept of experience has been able to capture some of the new trends which are affecting business worldwide. We can attempt to list three:

Word of Mouth. In a world with overabundant access to information, we tend to distrust any self-referenced form of information. As internet search engines teach us through their algorithms, we tend to trust more heavily word of mouth and referrals when purchasing. Whenever we find ourselves in uncharted waters, it’s the power of the word of mouth that helps us make difficult decisions.
Ownership is not efficient. Customers have realised that ownership is sometimes overrated. In terms of investing our resources, share economies provide a much better deal. As the Jobs to Be Done theory suggests, the value of a product lies in the use we make of it, and sharing allows us to maximise use while at the same time minimise cost.
Products are means and not ends. Brands have realised that if your goal is selling a product, you are not investing your money well. Brands need to develop customer loyalty, in order to access a customer lifetime value. This can happen only when brands take on the opportunity of a sale to invest in the customer and provide him\her with a multi-layered journey comprised of a series of physical and digital experiences.

Addressing even one of these three macro-trends is a big challenge, as companies in most cases will need to re-engineer their management practices, and probably rediscuss resources allocation.

As a consultant, when I find myself in the position of providing advice, brands play very defensively arguing that they are using state-of-the-art customer relationship management systems. This can help, but this is not a problem you can solve by ‘throwing money at it”.

In most cases, when it comes to experiential branding and retail management the problem lies much more in-depth. Firms do focus on an appealing brand promise but often rely on third-parties in order to provide it. As a result, in many instances, the distance between ‘what customers are led to believe’ and what the company is actually selling them is so great that customers resort to their social media to express their resentment.

Of course, this may not happen too often, but it happens often enough to question the very reason companies invest in a majestic web presence if it’s not echoed by a shred of consistency throughout the customer journey.

2. How experiences redefine purchase decisions

As we discussed in the previous section, focusing on the product is a recipe for disaster. This is especially true in the world of fashion where fast fashion retailers are pursuing high-paced shelf turnover. If your goal is to profit on the margin of one sale per customer, you are unlikely to scale your business.

Your firm should draft a brand experience by gaging the elements which comprise it. They can be analysed from three distinct perspectives:

Analsying a brand experience from the viewpoint of your customer.
Analysing a brand experience in terms of your brand promise.
Analysis how an experience arises from the relationship between the brand and the customer.

To clarify the last point, whenever we find ourselves going back to a store because of the interactions we have during our visit, we are ourselves adding value to the brand, and in technical terms, we’re co-creating the brand’s appeal to us because of the interactions we’re having with it.

This is itself a simple example of brand experience, delivered by good customer service.

Whenever we’ll find ourselves in the position of doing more shopping, the positive emotional feedback we had from a pleasant interaction is going to ignite a desire to return to the same store.

This is the essence of what experiential brand should aim to create: an emotional and behavioural reaction which is inspired or evoked by the brand. We could go as far as creating psychological conditioning when the emotional\behavioural feedback is so strong it literally alters a customer’s journey radically.

This is why most people, wait hours in line at a rock concert in order to get to the first row. It doesn’t make much sense, but we do it anyway.

Brands can tap into the very nature of our purchase decision process and leverage the instinctual, emotional side of our brains.

The dynamics created and fostered by experiential brands can differ according to the type of engagement we want to provide to our customers. According to the degree of involvement and active\passive behaviour, we can identify 4 experience categories:

Entertainment (Passive-High Absorption)
Educational (Active-High Absorption)
Aesthetic (Passive-Low Immersion)
Escapist (Active-High Immersion)

The last one fit the bill for virtual reality and augmented reality experiences, where not only rich media content is provided, but the consumer gains a high degree of participation in the process.

In conclusion of this section, we can note how the opportunity to access ‘experiential economies’ is pursued by many. As a consequence of this phenomena, we, as customers find ourselves overloaded with experiential content, which makes it very difficult for us to really remember with fondness an event which really stood out of the ordinary. Firms, therefore, are posed with an additional challenge, not simply creating an experiential framework for their customers but actually design an interaction which leads towards an experience that stands out of the ordinary, striking us for being especially memorable.

3. How can companies plan, promise and deliver their brand experiences

Now that the concept of experience has been clarified we can move towards a new goal: identifying the managerial practices which allow us to tap into the sensations, behaviours and memories of our customers.

The customer will develop a set of emotional connections, as well as positive reinforcements thanks to repeated exposure to the brand. As we say in marketing, a brand is a promise of consistency. In order to gain more exposure companies usually design a ‘funnel’ or a process of exposure to the brand’s content which – in theory – should lead the consumer to establish trust and affection to the brand, to the point in which he\she will be ready to purchase.

According to this model, a consumer moves one-dimensionally through four distinct stages of persuasion called in short AIDA:

Awareness. Provide a simple awareness of the existence of the brand.
Interest. Ignite an interest in the products\services offered by the company.
Decision. Make the customer consider the products of the company as a viable solution to a problem.
Action. Persuade the customer to make a purchase.

According to the stage at which the customer is, the company will try to expose him\her to different messages aimed at pushing him down the funnel.

While the funnel model in many respects is widely adopted as a valuable marketing strategy, the funnel has been disproven and has now become an hourglass. As we were discussing in the previous sections of this post the moment of purchase or the ‘bottom of the funnel’ is in reality only the starting point of yet another journey which is the products’ use.

This adds at least two additional stages into the funnel creating an ‘hourglass’:

Relationship management. Show your customer that you care about him\her and are ready to provide post-purchase services.
Propagation. If all of the above has been conducted effectively, then the customer will become a brand supporter and will propagate the message by telling about a great experience to his\her network.

This lower section of the hourglass model is especially relevant for those companies which are selling products which in itself are a social currency. It’s only with the use, that a customer can develop positive reinforcements connected to the status acquired by having product-led interactions.

The funnel or its extended version, the hourglass is a very effective conceptualisation for brands which conduct most of their marketing online. On the other hand luxury brands, online does not quite cut it.

Companies who develop a distribution network in order to reach will need to maintain a consistent brand promise across a variety of consumer touch-points (points of interaction between the consumer and the brand). These points of contact between the brand and the customer can involve:

Stores directly owned by the company.
Stores owned by trade partners.
Environments which are hosted by the customer
Social Networks and Digital Communities

A company may not be able to manage directly all of its touch-points but nonetheless, it must try to create a coherent distribution strategy to avoid channel or distribution conflict. If a company is able to effectively manage both its online and physical distribution it will have achieved a valuable goal, creating a system capable of fostering an omnichannel distribution strategy, and devising a value network.

4. Conclusions

As for many other challenges in the fashion and retail industry, developing memorable and meaningful shopping experiences is a challenge which involves many different players in a company: those who create the brand and envision its strategy, those who manage the way the brand is delivered over a variety of touch points and the operational staff made up of brand ambassadors who need to add value to the purchase process.

In this post, we have tried to define what we mean by brand experience, and how firms can develop actionable initiatives designed to re-engineer their firms and put the customer at the centre of their efforts.

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Experiential Branding and the New Horizons of Retail Management Experiential brands connect to their customers by evoking positive reinforcements which drive a customer back to the store. Let's see how they do it.

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Thomas Brownlees

I am an Anglo-Italian business lecturer and consultant based in Florence, Italy. In 2017 I started 440 Industries, an education and training company focused on fashion, music, and technology. Our mission is to help students, entrepreneurs and managers in overcoming the challenges of starting, developing and scaling their business in the creative industries. When there's a will, there's a way!