In a complex, uncertain world with an increasing escalation of choice, the value of brand trust is more important than ever.
Brands build value through establishing emotional engagement with customers. Strong brands are best placed to fight the race to the bottom, and escape commoditisation trap. According to the BoF / Mckinsey report ‘The State of Fashion in 2017’ many businesses are looking at 2017 as a year of organic growth, where the focus will be on, rather than adding more floorspace and sites, ensuring that their brand is fully optimised in their existing portfolio.
In a recent HBR review article, ‘Curing the addiction to growth’, it indicated that many successful retailers have curtailed expansion, and focused instead on their maximizing existing estates. Organic growth through improved consumer relationship management (CRM) and in-store experiences should be a key driver in 2017.
So much change has taken place in recent years that, with the growth of online, retailers and brands are reassessing their bricks-and-mortar in the context of the overall omnichannel customer journey. Many brands are now realising that brand value and equity is closely entwined with possessing a clear set of values that their customers not only clearly understands but also emotionally engages with.
In the memorable words of Steve Hoard, head of sustainability of Ikea at The Guardian sustainability debate last summer, on a global basis, in the west, ‘we have reached peak stuff’. Perhaps this insight is related to the increasing emotionality of Ikea’s advertising, ‘The wonderful everyday’ campaign where it is clearly linking the brand to creating memories in the everyday.
Relevant to the link between experience and memories is the neuroscientist Daniel Kahneman concept of the “two selves” – the “experiencing self” and the “remembering self”. The experiencing self lives in the present, processing current inputs and information from the physical and social environment. Once these moments have passed, however, most are lost forever. Kahneman estimates the average retention of an experience is about three seconds (Source: Thinking, Fast and Slow, Daniel Kahneman).
“We actually don’t choose between experiences, we choose between memories of experiences. And when we think about the future, we don’t think of our future normally as experiences. We think about our future as anticipated memories.”
The Riddle of Experience vs.Memory - Daniel Kahneman.
Kahneman makes this distinction about how experience and memory affect future behaviour. This indicated that loyalty will come from customers’ anticipating future positive memories of experiencing your brand. Source-KPMG /Nunwood report, 2016 Making Memories
Customer experience seen in the context of creating and managing memories means that brands should be looking to closely manage first and last impressions of their brand experience. The first impression is known in psychology as the law of primacy. The first thing that happens shapes our view of what happens next – the process of priming. If the initial experience is outstanding it is like placing a large deposit in an emotional bank account. If what happens next is positive, it benefits from confirmation bias; alternatively, if what happens next is negative, the customer will be more forgiving. However, if the initial experience is poor, the reverse is true.
Focusing on the welcome and clear brand communication is vital to creating the ideal first impression. This is ever more true in a world where our attention spans have become ever more reduced. The brand has a short, but vital window of opportunity to convey the right message. Seen in the context of experiences as creating memories, personal relevance is key.
Customer experience has been the prevailing lexicon for some years, but with the shift from possessions to experiences, there is the further shift up the value scale to personal transformations. Progression of economic value, Harvard business review, (HBR) Pine & Gilmore, chart the progression from low value, undifferentiated commodities, to goods, services, and experiences, to personal transformations, which are highly valued and differentiated. When we buy experiences, those purchases make us happier than buying things, Pine say, citing a 2014 Boston Consulting report, which refers to the increased spend on luxury experiences, a large part of which is luxury transformations, people looking to recharge, revitalise or improve well being in some way.
This trend is most evident in the huge growth evident in the wellness sector, where feeling good is the new looking good, and brands that enable the path to a ‘better me’ are well placed to benefit. We can see that the power of a well-crafted, articulated and expressed brand, in creating memorable interactions, can add enormous brand value. In physical retail spaces the business has an opportunity to, add humanity to their experience, capture and curate experiences that both enable and inspire the customer to share, with others through conversation and social media.