Service innovations

4 years ago by in Research, The Fashion Retailscape

The Service domain concerns the added value that a service or product provides for the customer. A great deal is expected of personalisation, in other words, the customising of the service or product for a particular individual so that a more or less unique service or product is created. The most literal interpretation of this is tailor-made clothes and the independent creation of, for example, a Louis Vuitton bespoke handbag from The Haute Maroquinerie in Bond Street, London. Personalisation is not just about creating a unique product or service; it also relates to finding an appropriate or unique product or service for an individual. Recommendations for you, the customer, based on your previous purchases or those of people with similar tastes can be found in many webshops. Another example is Buyosphere.com where you can obtain personal fashion advice from other visitors. Personalisation is also about customising the information about the service or product by taking into account the specific moment (morning rush hour, Wednesday afternoon, during Sunday opening hours, etc.) and the precise location (in-store, en route, at home, etc.). That personalisation can be improved by gathering as much information as possible about the customer: from buying trends via store cards and online click and buy patterns on PC, tablet, Smartphone and Smart-TV to personal information (zip code, e-mail address) and all kinds of sensor information (how you move around the store, what you look at, what products you pick up or take to the fitting room, etc.). This combination of data can then be used to seduce the customer with targeted special offers or by adapting advertisements on TV, online, in magazines or on billboards in real time as visualised already in a scene in the film Minority Report from 2002.

However, research (Peters & Witte, 2013) shows that only 14% of consumers want a personalised offering, 42% do not and 44% are undecided. Of consumers, 77% also say that they do not wish to be identified when entering a store in order to be presented with a personal shopping experience. One possible explanation for this is fear amongst consumers about what happens with their data. Of those questioned, 67% were willing to share information (with the retailer) in order to be presented with relevant offerings but did not want their details to be shared with other parties. That makes it difficult to build up a overall profile of a person and personalisation therefore remains restricted to a brand, store, social media platform, app or webshop despite the fact that benefits are to be had, including for the customer, by making information available to other suppliers about a person’s preferences. Musical preference (iTunes downloads, Spotify playlists, radio listening pattern) is, for example, not an isolated feature of an individual but is related to all kinds of preferences. The North & Hargreaves (2007) study shows that musical preference is associated with choices of particular newspapers, radio stations, TV channels, TV programmes, magazines, books, the amount of time spent reading and the choice for certain leisure activities. In that sense music preference says something about a person’s lifestyle. It is not unimaginable that a fashion webshop can recommend something relevant to a customer based on that customer’s music preference.

A theme that is just as important as personalisation is the provision of experiences. Piet Zoomers said in an interview: “Those that want to survive in the future will have to pay a great deal of attention to the in-store experience, certainly if one wishes to take on online shopping.” (in Hofste & Teeuw, 2012, p. 6). Veenstra (2012) regards ‘experience’ as an important weapon in combating inner-city vacant properties. Williams (2014) sees Disney’s “Merchantainment’ strategy as the next phase of e-commerce: the retail-store strategy of offering environments where consumers want to spend time – and money (p. 114). Ter Haar (2014) talks about the ‘total retail experience’. And in the PWC trend report (2014) the (digitising of the) shopper experience is referred to as a megatrend: “A digital experience of products and services is achieved by creating a clear experience of his product and/or formula, in which online and offline are integrated. This digital experience is achieved by using and combining technological developments such as mobile devices, augmented reality, video wall holograms.” (p. 12). What is striking is that new technology is often regarded as the bringer of good news: an experience is created ‘automatically’ through holograms, augmented reality, video walls, digital fitting rooms and virtual shopping. Examples are the Burberry store with large screens and magic mirrors (that respond to RFID tags in clothing), interactive floors of Coca Cola in shops and apps that allow you to shop ‘socially’ because you and your friends can all go shopping at the same time via social media (www.bevyup.com). This is at least an answer because all too often experience is seen as a key to success without stating precisely what constitutes that experience.

The fact that there are other views about experience and shopping apart from only the technological aspect can be found in the study undertaken by Erdman (2008). He tried to come up with a number of design principles for adding experience to shopping areas so that their distinctive capacity would increase. He based this on, amongst other things, the well-known Pine & Gilmore theory about the Experience Economy (Pine & Gilmore, 1999). In that theory, Pine & Gilmore derive a number of design principles for creating experiences. In his study, Erdman examined the extent to which these could be used in the context of shopping areas and in so doing allowed himself to be guided by 12 experts. In the end, he came up with four principles. The strength of these is that he attempted to translate these into specific instructions:

  1. Achieve harmony, in other words harmonise all variables within a shopping area with each other. For example a good fit with the environment, logical routing, correct size and scale in the shopping area, correct retail choice (sectoring, price, quality), quantity and quality of catering.
  2. Avoid negative impressions that can affect the experience such as dirty and unsafe environment, poor accessibility, high parking charges, unoccupied property, wind nuisance, etcetera.
  3. Activate the senses to create stimuli that feed the experience: light, smell, sounds, climate control, sight lines and visual aspects.
  4. Create an identity by paying attention to recognizability (landmark, logo, promotion) and by creating a safe and good atmosphere.

One final remark on experiences is necessary. In Van Vliet (2012) it is already stated, as a result of reviewing the Pine & Gilmore theory, that strong doubts can be raised about the unilinear process of economic evolution advocated by Pine & Gilmore, in which ‘experiences’ are a fourth step in the escape from the ‘commodity trap’. The few historical examples that were referred to at that time as counterexample can now be supplemented further by examples from the retail context. In the 1930s, Carl W. Dipman gave a number of future visions on the development of food retail, in which recurring aspects are self-service and “shopping is to be an experience, not just a job to be done” (in Bowlby, 1997, p. 99, italics in the original). Furthermore: “In the late eighteenth century Oxford Street had already been described as a ‘dazzling spectacle’ of ‘splendidly lit shop fronts’ and ‘alluring’ and ‘handsome’ displays.” (Nava, 1997, p. 64). Even more important than a vision and an illustrative example is that particular experiences were ‘produced’ and perceived around the turn of the 19th to the 20th century. The most iconic example of these being department stores. Department stores were more than just a place for doing your shopping; they formed a new public venue for showing off the modernity and were visited as tourist attractions. The department store Selfridges was regarded, like Westminster Abbey and other places, as one of the biggest attractions in London. One of the Selfridges advertising slogans was: “Shopping at Selfridge’s: A Pleasure – A Pastime – A Recreation”. Department stores were ‘fantasy palaces’, luxuriously built from marble, iron ornaments, large open staircases, parquet flooring and silk and leather furniture. They were the first public places that used electric lighting, and not just for illuminating but also for the theatrical effects as well. Everything was configured towards service and having fun whilst shopping, supported by unique spaces for children, restaurants, roof terraces, zoological gardens, ice-skating tracks, libraries, galleries, travel agencies, banks and all manner of service for delivering your purchases to your home. And that wasn’t everything: “In their display of goods and use of colour, they often drew on the convention of theatre and exhibitions, continually innovating to produce new, vivid and seductive environments, with mises-en-scenes which combined, or offered in sequence, modernist, traditional and exotic decors (…) These magnificent stage sets also served as a backdrop to live entertainment, which was provided on a regular basis. There were live orchestras in the restaurants and tearooms – and even, occasionally, in the grocery departments. Dress shows, and pageants were regular occurrences. ‘Spectacular oriental extravaganzas’, which included live tableaux of Turkish harems, Cairo markets or Hindu temples, with live performers, dance, music and of course oriental products, were also frequent events.” (Nava, 1997, p. 66-67; also see Stobart, 2008). Try and find that nowadays!

 

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References

Bowlby, R. 1997. Supermarket futures. In: Falk, P., & Campbell, C. (eds.). The Shopping Experience. London: Sage Publications. (pp. 92- 110)

Erdman, P.H. 2008. Op zoek naar beleving. Onderzoek naar een belevingsconcept voor winkelgebieden. Amsterdam: Amsterdam School of Real Estate.

Hofste, M. & W. Teeuw (ed.). 2012. Winkel van de toekomst, toekomst van de winkel? Enschede: Saxion, Kenniscentrum Design en Technologie.

Nava, M. 1997. Modernity’s disavowal: women, the city and the department store. In: Falk, P., & Campbell, C. (eds.). The Shopping Experience. London: Sage Publications. (pp. 56-92)

North, A.C. & Hargreaves, D.J. 2007. Lifestyle correlates of musical preferences: 2. Media, leisure time and music. Psychology of Music, 35, 2, pp. 179-200.

Peters, S. & E. Witte. 2013. De consument in 2020. Ede: GfK.

Pine, B.J. & Gilmore, J.H. 1999. The Experience Economy. Boston: Harvard Business School Press.

PWC. 2014. Innovate or Die. Download van www.shopping2020.nl

Stobart, J. 2008. Spend, Spend, Spend! A History of Shopping. The History Press.

Ter Haar, J. 2014. The retail roadmap. Navigating a new landscape in which technology fuels tomorrow’s human needs. Studio by Judith ter Haar.

Van Vliet, H. (Red.) 2012. Festivalbeleving. De waarde van publieksevenementen. Utrecht: Hogeschool Utrecht. (Cell Cahier #3)

Veenstra, M. 2012. De toekomst van retail: focus op bezoeker en experience. Gepubliceerd op www.frankwatching.nl (21/02/2012).

Williams, G. E-commerce is history. Maart 2014. Wired, pp. 110-117.

Professor Cross-media at Amsterdam University of Applied Sciences

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