Op-Ed: Retail Looks at Brand Experience for Its survival

Brand Experiences Are The Future Of Retail

Restaurants are focusing on delivery options, and online ordering to counter the drops in foot traffic. Retail is roiling over the reach of Amazon. Retailers are rapidly exploring ways in which to survive in a digital environment where Amazon writes the rules, and owns the field. The new mantra is, “Everyone needs to have an online presence.” Walmart is using its jet.com purchase to up its ante in online marketing. So it comes as a fascinating surprise that Starbucks, the brand that turned having a cup of coffee into a place to be, the brand that invented the mass connoisseur American coffee house experience, is exiting the online world. Why? The brand says that to win in today’s world it is the brand experience that matters, and the Starbucks brand experience cannot be replicated online selling flavored syrups and beans. If you want Starbucks, please come to our stores. As the company stated, “You can purchase your favorite coffee and Starbucks merchandise in your local Starbucks.”

Founder and Chairman, Howard Schultz, believes that the way forward is making your branded space an “experiential destination.”

The Starbucks CEO, Kevin Johnson said,

“To survive, merchants need to create unique and immersive in-store experiences.”

This focus on the total brand experience as a physically and emotionally “immersive” destination is not a new concept but a concept that has new traction as we navigate an virtual, digital environment. In 1998, B. Joseph Pine and James H. Gilmore wrote a pivotal, highly influential article for Harvard Business Review titled, “Welcome to the Experience Economy.” The authors point out that experiences are distinctly different from products and services. Increasingly businesses are “explicitly designing and promoting” engaging experiences, and charging for these experiences. An experience happens when a brand “uses services as the stage and goods as props… creating a memorable event.”

Certainly, many online e-tailers offer service that we respect and love such as Zappos, Lovelyskin.com, and Amazon. We experience convenience, and responsiveness. We trust and we are trusted. However, these experiences are two-dimensional. We never see with whom we are dealing; we never know if the color of the lipstick is really what I see on the screen; we are making a bet that those jeans will fit; and we hope that the gift arrives in time for the event. According to Pine and Gilmore, one of the principles of an immersive brand experience is engaging all of our five senses. At the moment (virtual reality and/or augmented reality may change this), delivery against the five senses is not possible online. Starbucks is opting for the distinctive aromas, the barista interactions, the recognition, personalization, the relaxed environment, the café-like design, the music, and the conviviality of being among like-minded others as relevant differentiation from an online shopping cart.

Starbucks is making a bold move that is contrary to what the retail and restaurant businesses are doing. While others are choosing to battle Amazon with online options, speed, and delivery, Starbucks is saying “no”.  Starbucks is making a bet on the participatory esthetic of its sensory, memorable experience. Starbucks’ heritage was built around Howard Schultz’s concept of the “third place”… home, work, Starbucks. It was for a community of coffee lovers. Starbucks has always been the place that allows us to belong to a sensuous, communal coffee world where we can express our individuality every day with every purchase in any taste we desire. Rather than use online as a two-dimensional channel for sales, Starbucks is focusing on making the store experience five-dimensional brand experience.

Amazon is an easy target to blame for problems in retailing. But maybe the loss of focus on creating relevant, differentiated brand experiences that surround and resonate is the real issue. Keeping a department store, retail establishment or restaurant engaging, up-to-date, authentic and enjoyably experiential takes a lot of resources. There are a raft of reasons why resources were not allocated for enhancing and asserting the total brand experience. And, so, for now we are seeing a retail implosion. As we head towards a world where stepping into an immersive experience requires a headset, Starbucks is saying we can give you the real, genuine experience without the surreal gear. Lets hope that other brands recognize that success depends on the total brand experience you design, and where your brand creates the rules that others will follow.


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