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January 19, 2011

Why are savvy brands enriching the purchasing feeling for their consumers?

Why would consumers be willing to pay up to ten times more for a cup of coffee at a café than one that is brewed at home? The answer is simple – it's the whole experience surrounding consumption that keeps them coming back for more. Consumers today no longer just crave products and service but the experiences that come with them as well. What works with them? What are some of the gimmicks that brands are coming up with to engage their attention?

Key trends

  • Come in and have a snooze;
  • Experience the world in a day;
  • Seek and you shall be rewarded;
  • Be there or be square. 

Commercial opportunities

  • Most entrepreneurs have an interesting and highly personal story behind their decision to launch their business, but many forget to share that story with customers. A good story may trigger customers to feel positive towards the brand and the motivation to purchase;
  • Attract and maintain the attention of consumers by stimulating all their senses. It is through this that a complete experience can be created which will translate into an unforgettable one that will have a longer-lasting effect than any advertising campaigns or jingles;
  • Packaging upgrades can make a big difference in creating a fun purchasing experience. Explore ways that can improve the 'box-opening' experience. Think about Apple's box-opening experience and how consumers get excited when they open the boxes of their newly purchased MacBooks and iPhones.

Background

Goods and services no longer seem to be enough for consumers. Businesses and brands increasingly have to orchestrate memorable events for their customers with the aim that the memory itself becomes the product. The “marketing experience”, as it is sometimes referred to, stresses consumer participation, contact, and emotional resonance to drive consumers to experience the products, which in turn motivates buying.

A study from a December 2009 issue of the Journal of Consumer Research revealed that once consumers actually try products through experiences, their preferences shift from the item with the most bells and whistles to the one that is easiest to use. “Our studies indicate that after experiencing a product, consumers think more concretely than just reading a product description,” said authors of the paper Rebecca Hamilton and Debora Thompson, from the University of Maryland and Georgetown University respectively.

Study participants were asked to choose between an mp3 player with more pre-loaded songs and one that was easier to use. Those who were only given product information were more likely to choose the player with more songs whereas those who were given the experience to use product were more likely to choose the device that was easier to use.

Interestingly, two weeks later, the majority of participants in both groups preferred the device that was easier to use, indicating that consumers who purchase a product based on an indirect experience – such as an advertisement or seeing on display– are more likely to be ultimately dissatisfied with their purchase.

“Thus, consumers may be selecting products based on indirect experiences that do not maximise their satisfaction during subsequent direct usage experiences. This is an important issue for firms concerned with customer satisfaction as well as for consumers,” wrote the researchers.

To create a total experience for their customers, Air France has its own music label 'Air France Music' to release CD compilations to be played on flights, creating the right atmosphere for reverie, relaxation or discovery, allowing passengers to immerse themselves in the whole experience of flying with Air France. Based on the global popularity of this offering, Air France has also released music on social media sites such as My Space, Facebook, iTunes, and Deezer.

Come in and have a snooze

IKEA's Scandinavian-design furniture and in-store cafeterias serving Western food give shoppers the feeling that they are indeed in Sweden. Some shoppers may be there to just have an aimless wander, or to have a nap in one of the display beds even, but they are certainly developing a positive connection with the retailer.

“I like the environment,” said Zhang Xihua, a 62-year-old retired schoolteacher from the eastern Chinese city of Wenzhou who was at the 43,000-square metre IKEA store in Beijing. “It makes you feel like you're abroad.” Just like Zhang, many came to soak up the atmosphere and to have a vision for the future.

“I'm still living in a dorm, but I want my future home to look like this,” said Xu Nan, a 22-year-old college student. Torsten Stocker, a partner at Monitor Group, a consulting company in Shanghai, said: “Even if customers aren't buying furniture yet, they are establishing a connection to the IKEA brand. They just want to experience the furniture to see what it's like,” he said. Ian Duffy, IKEA's Asia-Pacific president, certainly did not mind that.

The idea is that maybe if you've been visiting IKEA, eating meatballs, hot dogs or ice cream for ten years, then maybe you will consider IKEA when you get yourself a sofa. Some people just come for food; that's OK. For them, it's an experience.” IKEA, whose biggest Asian store is in China, plans to more than double its outlets in the country by 2015 as rising incomes turn more visitors and diners at in-store restaurants into furniture buyers.

Real sales in furniture and furnishings stores in China: 2005-2010
US$ (billion)
Source: Euromonitor International from trade sources/national statisticsNote: Data based on constant prices and fixed 2010 exchange rates. Market sizes based on retail value RSP.

Experience the world in a day

The national pavilions at the World Expo 201 in Shanghai were set up to convey a positive and distinctive narrative about a country. To provide a compelling visitor experience, pavilions were attentive to the details in creating an atmosphere – a “hyper-reality” – through spatial design, layout, lighting, sound, and many other communicative devices on the premises.

Like in most brand engagement situations, the conventions of communication are based on the two senses of sight and sound. For example, at the French pavilion, attempts were made to appeal to the other senses of touch, smell and taste through the nation's cuisine, in the hope of providing a distinctive, memorable experience.

Many pavilions also showcased original art works and treasured artefacts brought from their home country, such as Denmark's display of the Little Mermaid statue with a real-time projection of its original site in the waterfront area of Copenhagen. Meanwhile, many pavilions have built-in features that are action-oriented, inviting and eliciting visitor participation during the tour.

For example, the “power ball” in the German Pavilion moved with sound made by visitors while there was a floor in the Japan pavilion generating electricity as visitors stepped on it.

Seek and you shall be rewarded

The best way to grab the attention of inner-city hipsters is to entice them with “hidden gems” that not many people know about. That, at least, is the view of the people behind Hidden Pizza in Melbourne, Australia. The pizzas, served in sturdy bags made from hand-stitched recycled paper along with a glass of homemade lemonade in a recycled jam jar, were free.

However, people had to find them first. It started in April 2010 with a Facebook page and lots of “have-you-tried?” Tweets and even a website of the restaurant but no address or phone number were given. A note on the website tells would-be customers that “finding the restaurant is easy, just look it up the way you would any other business”.

Most of the urban tastemakers being targeted by Hidden Pizza might imagine that means Google, but they were wrong, for this whole enterprise is a marketing stunt for Yellow Pages, which has been perceived as uncool by the younger generation. “We wanted to create a sense of intrigue,” said one figure close to the campaign. “We want to give consumers the experience of not just searching online for something but to actually search for it in a real-life situation – and be rewarded for it.”

Global number of internet users: 2005–2010
Billion
Source: Euromonitor International from International Telecommunications Union/World Bank/trade sourcesNote: Data for 2010 is forecast.

Be there or be square

late 2009, vodka maker Smirnoff launched a new campaign entitled 'Be there', for the USA, UK, Ireland, Brazil, Venezuela, Canada and Australia. The experience campaign, which will be run through to the end of 2010, encourages people to participate in extraordinary events, keeping in line with the brand's ethos to inspire consumers to overturn convention in the pursuit of one-of-a-kind experiences.

The company ran a global competition on social networking sites inviting consumers to create their own experiences by pitching ideas on how they propose to turn an ordinary situation into something extraordinary. Winners will receive US$1000 and an HD flip camera to record and post their attempt online. Smirnoff Co. global brand director, Philip Gladman said: “The Smirnoff Brand has a rich heritage in the world of nightlife and entertainment.

Our goal is to build on this and deliver a wealth of opportunities for consumers to experience exceptional, unexpected and inexplicable 'there' moments for themselves.” Launching 'Be there', the company said it was not only a new ad campaign, but “a shift in the marketing approach from linear ad campaigns to experiences and content amplified through the power of digital.”

Outlook

For many of today's consumers, demand exceeds mere concerns about quality to reach a level where their senses have to be stimulated by the concept that goes with the purchase as well. This is particularly the case with younger generations of consumers whose members are becoming increasingly savvy and have greater purchasing power.

These consumers are increasingly no longer making purchases based on calculated decisions but will seek active experiences that will allow them to try out the products and services offered.

The increase in affluence in many emerging economies around the world such as China and Russia will also accelerate the frequency of people going out and paying more for experiences rather than just acquiring products based on needs or due to the persuasion of advertisements.


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