Why ‘Customer Experience’ is King

As self-serving as it may sound, the Christmas season used to ring a positive bell for many retailers. This was the season where retailers, perhaps struggling with tightening margins, higher borrowing costs, and rising operating expenses, can finally see the light (or the ‘black’, to borrow from the now-popular retail holiday). Growing up with the family business, December has always been the busiest month for us. We would spend the days and weeks before Christmas manning our stores from opening to closing time — some at the cash counter, others in the back office checking inventory. During the heyday of brick-and-mortar retail, I remember not having the time to even use the restroom as there were simply too many customers inside the store to handle.

Struggles of Local Retailers During Christmas Season

But those were ‘the days’. In the last couple of years, local retailers contend that they do not feel any bump in sales until the weekend before Christmas, some even as late as the 23rd. Last year, many major malls were still crowded, but not many customers were carrying shopping bags. Other customers were looking for big discounts and good deals, forcing some big brands to start off their end-of-season sale even before the peak Christmas week. Again, I reiterate my earlier argument against price wars and the destruction of retail value — heavy discounting will only lead to the eventual death of brick-and-mortar.

Evolution of Christmas Shopping

Interestingly, an article from the ‘Retail Dive’ this week highlights the reasons why, globally, Christmas shopping has evolved. Instead of giving products as gifts, shoppers are now giving ‘experiences’. Accenture reports that shoppers are expected to spend more money this year for gifts — but instead of buying products, consumers will spend on travel, dining, entertainment, and gifts of services such as spa treatments. Millennials and Gen Z’ers are increasingly finding more happiness in experiences — in eating in good restaurants, attending concerts and events, taking day or weekend trips to the beach, or taking Zumba lessons. Thus, retailers who want to sell their products must now find ways to tie their brands to an experience that engages their customer. In an earlier blog, I also highlighted the argument that creating a memorable shopping experience for the customer is now an essential requirement for the sustainability of any retail business in this generation. Logically, a customer who is able to experience a product first-hand, will be more likely to buy the product too. Similarly, participating in an in-store experience can keep a customer longer inside the store. And the longer a customer stays in a store, the higher the chances for purchase. Remember that this is also the generation of social media — so experiences that shoppers can immediately share on Facebook or Instagram can have a positive effect on a store’s brand awareness.

Let ‘Customer Experience’ Drive Your Sales

Many brands abroad have experimented with modifying their retail floors to add some experiential flavor for their customers. American Girl shops offer a chance for kids to have lunch with their dolls (yes, it sounds creepy, but admit it, it’s creative). REI, an outdoor goods store, invites their customers to go camping to experience first-hand how to use their products. Cosmetics stores such as Sephora have organized daily make-up events to instruct customers on how to apply their products. Many big box retailers abroad will be featuring meet-and-greet Santa Claus activities this holiday season. Locally, many traditional retailers such as barbershops have started offering coffee and cocktails, in a bid to keep both their customer and their companions engaged throughout the service.

Tips on How to Make an Effective Retail Experiential Event

Retail Dive’s Pamela DeLoatch gives us tips on how to make an effective retail experiential event in her November 9, 2018 article —

  • Make sure the experience ties to the product. — For example, sports retailers with enough floor space can install a small running track or basketball ring for customers to try on new athletic shoes and athletic gear.
  • Activities work best when people feel invested in them. — Involve your customers in planning what experiences to offer. Get their feedback and recommendations.
  • Create an experience by figuring out how such event adds value to your customer’s lives. — Small appliance retailers, for example, can offer special dining events where customers can try on the product and use it to prepare their favorite dishes.
  • When planning events, consider how consumers can share them on social media to extend the fun.

In summary, I again harp on the idea that shopping should no longer be a mere transactional experience for customers. Let the customer experience what it is like to shop in your stores. And allow them to share it for all to see.