Experiential Retail Doesn’t Sleep On Pandemics
Today a customer may walk into a retail location in the midst of a pandemic. But it’s still an experience.
And today a customer may avoid leaving the house because of the pandemic and shop online. And that is still an experience. In fact, experiential retail does not sleep during a pandemic or any other external event. Technology and attention to detail can extend experience to any corner of the globe or any business vertical. According to Joe Pine, who along with James Gilmore has updated the business book “The Experience Economy,” experience is critical and achievable in any environment.
“First, retailers need the right mindset,” he said. “In particular, they have to stop competing on time well saved — being merely nice, easy, and convenient, which is all well and good, but then they’re competing against Amazon, Walmart and others who will always do it better. Instead, retailers need to offer time well spent — offering experiences that engage customers and give them a reason to come into the store besides the merchandise. Only then can retailers use technology properly, to yield time well spent.”
How to do that? Pine points to a project he worked on with Carnival Corp. owned Princess Cruises (pre-COVID-19, of course) that holds lessons for retailers and integrates the Internet Of Things (IoT). Working with Carnival Chief Experience and Innovation Officer John Padgett, he embarked on a mission to elevate the experience for Carnival guests, across 10 brands and over 100 ships.
The Carnival team wanted to focus on connection and a customized, individual experience for each guest. At the very center of the experience is what Carnival called the Ocean Medallion, a quarter-sized, 1.8-ounce disc that fits into a guest pocket. The Medallion is a Near Field Communication (NFC) device for nearby communications and Bluetooth Low Energy (BLE) for more distant connections. Its beacon connects with thousands of sensors on the ship. From those connections Carnival can identify every single guest and then morph the ship’s goods, services, and experiences to each individual’s wants, needs, and desires.
The first experience begins when guests book their cruise. Carnival laser-etches the Ocean Medallion for every individual with the guest’s name (as well as ship-specific information on the back), and sends it to their home. This enables guests to plan onboard experiences, giving Carnival all the registration information about the guests (including passport data). When it comes time to board, guests are greeted by a crew member with a tablet who checks the code with the Medallion.
The Ocean Medallion’s technology is stealth. When guests approach their individual rooms Carnival’s readers track their progress and just as the hand reaches for the door lever, it turns green and unlocks. It also acts as a credit card, enabling guests to buy merchandise or participate in other experiences on board.
“How can physical retailers take a page from the Ocean Medallion program?” Pine asks. “Retailers should understand the need to get personal with their customers. Every customer is unique, and retailers need to cater to that uniqueness, particularly those who come again and again into one’s stores.”
That means that first those customers must be identified. Retailers do not need that level of accuracy, but they can use customer phones through an opt-in app and geofencing. In that way each device is identified to all of the retail workers whenever such a customer walks in (and that customer could simply turn off their app if they didn’t want to be identified). Then a retailer needs to remember their past interactions — including past purchases, ideally, but information that creates a relationship by knowing customer preferences and desires such as sizing, colors and styles.
“It’s certainly harder to do it online than in physical stores, but it can be done,” Pine said. “It’s again all about time well spent — that site visitors value the time they spend on site. Customizing the site to them is again important, and eminently doable. Another key thing is to recognize that engaging experiences require dramatic structure, a way of designing the time so as to rise up to a climax (perhaps with a purchase) and come back down again.”
Privacy is of course a related issue. Several studies over the past few weeks have shown that consumers want personalization, such as the Medallion shows. But they also want guarantees that the data necessary to enable that is protected.
“Both research and practice show that people are willing to share information when they see the value of doing so. So retailers have to make sure that the value of the information they retain is significant, and that customers see the trade-off between the information retailers have and the value customers get,” Pine said. “That’s why the Carnival guests who turn down the Medallion are a minuscule portion of the total, because they see the value in the mass customized interactions Carnival creates, which elevates the experience for every individual guest.”