This article is for the Professionals
Sign up to Inside Retail Professional now for only $5+GST for your first three months.
That's an 85% discount plus you’ll get FREE access to all Masterclasses during Retail Week. 5 retail industry leaders like you’ve never seen them before.Already a professional? Log in
There’s a reason experiential retail works, when it’s done well: it taps into the emotions.
You gotta love the product
First, some rational statistics to back the case for emotion. A recent Forrester and FocusVision study indicated that the way customers feel about a brand experience has an influence factor of 1.5 times on their brand-oriented actions, and that 93 per cent of retailers believe customers are more likely to buy brands that they feel connected to.
According to Chief Executive magazine, if a customer feels an emotional connection with a product or brand, this can drive gains of between 30 per cent and 100 per cent in customer value. A 2012 article in fibretofashion.com indicated that emotional ideas stimulate a customer’s mind 3000 times faster than rational thoughts. This links to what the renowned psychologist and Nobel laureate Daniel Kahneman has called “system 1” thinking, which is fast, instinctive and emotional and in which he says 95 per cent of decisions are made.
Research conducted by “predictive emotional intelligence” consultancy Motista published in the Harvard Business Review as far back as 2015 indicated that customers who are fully emotionally connected to a brand are 52 per cent more valuable than those who are highly satisfied but not fully connected. Further, fully connected consumers spend twice as much with preferred retailers, have a greater than 300 per cent higher lifetime value, stay with a brand up to 50 per cent longer, and recommend brands at an average of 30 per cent, which is quadruple that of other cohorts.
According to Motista, within a year of launching products and messaging to maximise emotional connection, a well-known household cleaning brand turned market share losses into double-digit growth, and after an apparel retailer reoriented its merchandising and customer experience to its most emotionally connected customer segments, same-store sales growth increased by a factor of three times.
A raft of other academic reports backs this up.
There are a number of factors driving this shift, including millennials and others increasingly placing more importance on experiences than acquisition of things and the increasing use of e-commerce, resulting in more emphasis on human connection, contact and emotion in physical environments.
Communications channel fragmentation, and the decline of TV advertising has made it simultaneously easier and more difficult to establish an emotional customer connection. And according to German retail design consultancy Wolfgang Gruschwitz, because the consumer is becoming an information-loaded “prosumer”, the retailer’s journey is now from retailing to “emotailing”, and becoming the entertainer of people in a store.
In spite of all this research, a 2018 report by New York media company PSFK on the future of retail found that only 55 per cent of US C-suite retail leaders planned to invest marketing dollars into increasing experiential elements in retail stores.
Beyond the one-off
Part of the disconnect may be not knowing where to start, or expecting a one-off experiential event to build brand loyalty. In a piece for AdAge, retail analyst Ana Andjelic suggested that experiential events may be becoming undifferentiated, and that retailers may be better to become a destination for recurring customer and community activities than a “one and done’” social media opportunity. Patagonia, with its activist cafes, is an example of this. “Worn wear” by Patagonia also features in Nordstrom’s NewConcepts@Nordstrom ongoing pop-up store events series, designed to give shoppers hands-on opportunities to connect with Patagonia’s eco-friendly efforts in reuse, recycling and fair trade.
US fashion retailer Planet Blue hosts a series of in-store events leveraging partnerships with the clothing brands it sells and local influencers. A tie-dye event held at its Santa Monica store with denim brand Agolde drew 150 attendees and sold three times more jeans than on a regular day.
Beyond recurring events, there are a number of ways to tap into customer emotions.
Emotional connections with customers can be driven by permanent activations in-store, temporary activations in and out of store, and across digital and other communications touchpoints where customers can also create and share content themselves.
An example of both temporary and recurring in-store activation is education, which is now often combined with entertainment to form “edutainment” and something that a customer can’t necessarily get online before they get to the store. Williams-Sonoma does this well with their cooking classes held at the back of the store, adding a service and experience to the customer’s purchase.
Lululemon Athletica’s yoga sportswear and gear brand is positioned as a way of life, connecting yoga, spiritual living and products. Its New York store features Zen pods, self-guided meditation and yoga classes.
Another way to connect to emotion is in creating a space that speaks to the five senses. Lush does this well, with visually attractive stores and products and plants that exemplify the product ingredients. The unwrapped products smell lovely; there is music and the voices of salespeople; customers can feel the products’ textures and packaging. Drawing a longer bow, it could be argued that Lush also involves taste, as it uses colours and product names related to food.
A company can select a specific customer emotion or emotions to focus on. Uniqlo has employed “mood stylists” who use neuroscience to assist customers in selecting T-shirts based on their mood.
Point-of-sale materials, merchandising, and communications both in and out of store (including social media) can be employed to demonstrate the emotions a customer may feel in purchasing – needs of status and prosperity, intelligence, pleasure, acceptance, power and dominance, or individuality and uniqueness.
In the 2015 HBR article, Motista is more specific, listing 10 consumer emotional motivators with significant impact against which retailers and brands can activate. These include “stand out from the crowd”, “have confidence in the future”, “enjoy a sense of well-being”, “feel a sense of freedom”, “feel a sense of thrill”, “feel a sense of belonging”, “protect the environment”, “be the person I want to be”, “feel secure”, and “succeed in life”.
This would indicate that experiential events that only speak to one of these – such as “thrill” or “community” – may be missing a trick. Brands and retailers may need to select several of these motivators and execute against them in different ways over time, in the same way retailers and brands activate various consumption occasions over time. Further, it shows that there are opportunities to build emotional connections in ways that are more permanent than one-off events.
This ties in with Motista’s findings about emotional connections and sales. Motista’s article related that a condiments brand found that 60 per cent of its social media-affiliated customers were emotionally connected, versus 21 per cent of all customers. The brand therefore has increased its focus on its social media network, developed its online customer community, and points customers to the website for recipes and promotions.
By identifying emotionally connected consumers and the precise emotions that motivate profitable behaviours, brands can apply this insight to every aspect of their customer journey in a targeted way that optimises marketing investment across touchpoints – talking to the most valuable customers at touchpoints and in ways that matter to them, rather than to the masses.
One prolific author on the subject of sales, Tom Hopkins, says, “Logic in sales is a gun without a trigger. You can twirl it all you care to, but you can’t fire it. Emotion has a trigger.”
The shift from the transactional to the experiential means that understanding the emotions behind and during shopping are becoming increasingly imperative to survival. Emotive retailing is holistic, not just what you do in-store or at a single experiential event. The most sophisticated brands and retailers make emotional connection part of a broader strategy involving every function and touchpoint in the customer journey pre-, during and post-purchase.
Ultimately we may see a shift from sales per square metre to experience and emotions per square metre.
Norrelle Goldring has 20 years’ experience in retail, category, channel and customer strategy, marketing and research, working with global retailers, manufacturers and consulting houses.