One only needs to peruse the retail headlines to see the wide ranging discussion on the importance of customer experience in retail. In IMS Retail University we make the case very bluntly: "Differentiate or die." If it only comes down to selling at lowest price, game over. Online and the largest retailers win the price battle, and Amazon wows consumers with both service and price. So, how do you create and sustain experience consumers will value? Retailers would do well to borrow from the playbook of Disney who understands a high quality experience is all about "theater" … and requires a blend of Stage + Actors + Script.
One of the great experiences in life is to attend a live performance. Whether it be in the great theaters on Broadway in NYC, in the showplaces of Vegas, or at your community playhouse, there is nothing quite like attending a great performance that captures the audience and your undivided attention.
You can have an amazing theater experience on the barest of stages, IF you have great actors that can bring a great script to life. On the other hand, the most elaborate stage and props will not save a poor script or mediocre actors. The very best theater experiences are an artful blend of three core fundamentals: Stage, Actors, and Script.
In the very simplest sense, retail is the business of selling products to consumers. The oldest form of retail is the simple market place with the "barest of stages." Products are simply sold in market stalls, off carts, or even just displayed on the ground. If you have ever been to some of the great old markets like Jamaa el Fna in Marrakesh's medina, you will see some of finest "actors" selling their wares! You literally are "sucked in" by some of the best age old scripts for engaging you as a consumer, including participating in making the product!
In the old markets, the "stage" (store) is often a street … complete with goat. The "actors" have amazing ways of engaging consumers to make them part of the experience … and paying customers.
If retail is only about selling commodities at a price, then no … retail probably does not have to become theater. But, the luxury brands have found it essential to employ elaborate staging to differentiate their products and create value. The "high street" stores such as Harrod's have quite literally been using elements of theater (especially stage and actors) to create an experience to draw consumers and command premium prices for their products and services.
Today's consumers can typically find a better deal online. To survive and thrive, retail stores must create some "theater" in order to create experiences where consumers are entertained, learn something new, or find some value beyond purchasing products at lowest price.
The retail "stage": Necessary but not sufficient
The modern store has quite literally become a stage for most retailers who are not warehouses. The plan-o-gram for store layouts has become strategic for engaging consumers so that they will linger longer. A good example is IKEA's labyrinth. Best Buy has implemented serpentine fixtures to change how consumers are engaged while shopping for technology. Yet, Apple has proven how a very sparse, very minimalist stage can be very successful with the right actors and script to engage consumers beyond the products displayed.
Retailers can NOT fix or change the consumer experience with merely a stage. You can see a number of retailers investing heavily to change their stores. And, it's not just retailers obsessing over the stage in the store. Around the world, PC manufacturers are frustrated with retailers' store experience. So many vendors are heavily investing in merchandising, fixtures and displays in order to change the consumer experience with their brand in stores.
It is not that store staging and merchandising are unimportant. In fact, Apple recently applied for a trademark to protect their store design. But, all the investments in fixtures, lighting, color schemes etc. will not be sufficient to change the experience without changing the talent of the actors and how they engage (script/process) with consumers. The blending of all three is really the secret sauce of Apple, Disney, REI and other retailers who create a memorable experience.
Retail store staff: It is the Actors who create differentiation and value
In a large mass merchant like Walmart, or a club store like Costco, retail staffing is very lean on the floor. In a commodity environment, staffs are there for two primary purposes: stocking shelves and to serve as cashiers. Yet, even Walmart has been experimenting with different kinds of talent and training for departments like electronics and mobile phones.
Apple clearly understands the value of "actors" when you look at how they "hire for smiles." By design, Apples store are not places for "racking and stacking" products. They are stages built for consumer centric shopping. But, the Apple stores only truly come alive with the right kind of talent focused on the consumer and engaging them in an experience. The most elaborate stage in the world is empty and meaningless without actors who can make it come alive. Whether it be Apple, or higher end department stores like Nordstrom, it is the actors who are absolutely critical in creating the experience and the services that consumers will pay a premium for.
Script: The "secret sauce" of experience and differentiation in retail
The script is perhaps the most difficult aspect of the theater metaphor for retailers. Most think of a script as the "lines" read by the actors. But, if you've ever seen the actual script used in theater or a movie, it contains not only the dialog, but all of the notes, specifics and details on directing and executing the performance. A truly great actor can be horrible in a film or play if they have a miserable script.
For retail stores, the "script" is quite literally the SOP – Standard Operating Procedure. For far too many retailers, their SOP is literally focused on the mechanics of bringing in goods, running the store, and collecting the cash. For retail stores in trouble, look at their SOP and you will see almost no "script" for how to engage consumers, or any consumer metrics for experience. There is a reason that Apple stores revenue per sq.ft. is 2X that of Tiffany's. Everything about Apple's "script" is focused on the consumer experience … including their SOP for how to remove waiting for a cashier by enabling checkout in the aisle on an iPhone.
The whole is greater than the sum of the parts …
While you can have a theater experience in a park without a stage, the best theater happens when staging is built for the script, and the actors are chosen for their talent to play specific roles to bring the story to life. It is the theater or movie director's job to bring all three … S+A+S into harmony to create an experience. Maybe retailers need to hire a theater director!
Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace.