(Welcome to a Brand Experience Brief — insights and analysis from my audit of a new and interesting retail or restaurant concept.)

Walgreens is trying to “transform from a traditional drugstore to a retail health and daily living destination,” according to Joe Magnacca, the company’s president of daily living products and solutions.  Its flagship stores showcase its new approach.  Check out my audit of the new Walgreens in downtown Chicago:

other brand experience briefs:

• LEGO
• REI’s flagship in SOHO
• Walmart.com

(If you’d like your team to re-think your brand experience, sign up for a Brand Experience Day.  We’ll head out into the field to experience concepts like these, and then regroup to identify and apply the new insights to your business.  Learn more.)

brand as business bit: 

“A strong concept that has the potential to evolve into a brand”

is among the five criteria for a successful fast casual restaurant concept, according to Don Fox, CEO of Firehouse Subs.  Speaking at an education session at the National Restaurant Show earlier this week, Don shared his insights about growth.

His point resonated with me, as I had just commented to a colleague that many restaurateurs fail to realize that a successful restaurant brand has to be about more than the food.  Having worked in the restaurant business for over 20 years, I find that too often aspiring restaurateurs develop a new food concept and think they have a viable business.  Certainly the food has to be right.  But a brand is also based on all the other elements of the experience – service, presentation and packaging, pricing, facilities, ambiance, culture, personality, etc.  And restaurateurs need to ensure these elements are as differentiated – and well-executed and continuously innovated upon — as the food.

P.S. Check out my video recap of the show, including popular products, sound bites, and other highlights.

What makes a store more than a store?  What makes a breakthrough brand experience at retail?

These are questions that companies with brick and mortar assets wrestle with as they continue to lose share to online competitors or to those with mobile capabilities (smart phone-enabled mobile commerce as well as IRL roving mobile units and other non-traditional formats).  I’ve been tackling these questions through the last six months as I’ve audited over a dozen new and interesting retail and restaurant concepts.

I’ve been cataloguing my insights from my audits in a series of Brand Experience Briefs.  As I survey my reports so far, I find that the concepts which create memorable brand experiences in their stores have some things in common.  Here are nine criteria of breakthrough brand experiences:

1. a clear and compelling brand story and/or brand promise that’s brought to life. Stores need to embody the essence of the brand and make their differentiation and value clear and compelling.  The brand history and values are conveyed clearly in the design, signage, and lounge area at Patagonia’s Tin Shed store, while The Habit Burger Grill restaurant fails to express a distinctive brand platform or attributes.

brand mural in Patagonia's Tin Shed store

2. target appropriateness.  We’re all attracted to people who are clear about who they are. We respond naturally to their self-confidence. Brands are no different. Brands with integrity and clarity are attractive because they don’t try to be all things to all people or to be something they’re not.  The 77Kids NYC Style Lab is a great example. Everything about the store is targeted squarely to fun-loving kids.  Subway Café, on the other hand, aspires to offer an upscale coffeehouse ambience but that’s not what its customers want, and it doesn’t execute on the concept very well.

3. brand-right assortment.  Some of the strongest concepts are filled with tens of thousands of SKUs, while others offer very tailored assortments.  There’s no single “right” assortment size or scope – it really depends on the brand strategy.  Central Market aims to be a place for foodies, so it makes sense for the store to feature over 700 types of hand-cut cheeses.  Starbucks’s new concept stores use local wines and beers to convey the personal, intimate attributes that the company desires for its brand.

4. interactivity.  Although emerging technology has enabled websites to become more entertaining and engaging, brick and mortar still has the upper hand on interactivity. And the concepts that breakthrough are those that use interactivity to make the shopping experience unique, exciting, and memorable. The LEGO store stands out with features like its Pick-a-Brick wall for kids to dig their hands into cubby holes filled with LEGOs of all different shapes and colors.  However the Walmart.com store misses important interactive opportunities since many products were not available to try or play with.

Pick-a-Brick wall at the LEGO store

5. overt promotion of product quality.  Retailers should stage experiences and use store signage and displays to promote the quality of their products.  The REI store in SOHO sets the standard for this with its areas that enable customers to try products (like an incline walkway in the hiking boot area); Uniqlo uses eye-catching signage to highlight features of its products; and messages about product freshness are sprinkled throughout the Pie-o-logy location.  Steak n’ Shake Signature could learn from these examples, since they have great burgers and shakes but haven’t figured out how best to merchandise and present them.

6. passionate and well-trained employees. Staff who are disengaged (employees at the Walmart.com store seem more interested in figuring out the products themselves than in interacting with customers) or clueless (an order-taker at Subway Café doesn’t know the menu) detract from the experience and damage any hope of brand integrity.

7. distinctive design and décor.  The most memorable brand experiences use design and décor to create a sense of place.  They take a fresh approach to layout and architecture to create a brand world of sorts, they employ interesting materials for surfaces and fixtures to appeal to all the senses, and they use details and decorations to express the brand personality.  REI integrates the historic features of its unique location (the historic Puck building) with digital signage and other contemporary design elements, while Pie-o-logy created its distinctive environment, including mod furnishings and a wall of fun quotes, from the ground up.

Pie-o-logy's distinctive design and decor

8. attention to detail.  The devil is in the details when it comes to retail brand experiences.  Details like Starbucks’s hand-written welcome message incorporating its wi-fi service communicate volumes – so do the plastic utensils at ihop express and the drab dressing rooms at Uniqlo.  Breakthrough retailers sweat the small stuff.

9. extension beyond the four walls.  Retailers that extend their brand experience outside their store make a bigger impact and create longer-lasting relationships with their customers.  A couple of examples:  REI’s active involvement in its community through service projects provides authenticity and personal engagement; the content in Uniqlo’s magalog connects people to its brand attributes and values.

Uniqlo's matalog

I’d love to hear your feedback.  What other criteria contribute to breakthrough brand experiences?  What new and interesting restaurant and retail concepts should we take a look at?  Comments are open!

Also if you and your team need to re-think your brand experience, sign up for a Brand Experience Day.  We’ll head out into the field to experience concepts like these, and then regroup to identify and apply the new insights to your business.  Learn more.

related posts:

• would you like a coffee with that wi-fi
• 12 truths to guide retailing in 2012
• six best practices in retail

(Here’s my newest Brand Experience Brief — insights and analysis from my audits of new and interesting retail or restaurant concepts.)

It’s always interesting to see how product companies create retail experiences for their brands.  That’s why I’m eager to share my download on the LEGO store.  It’s a solid experience for the LEGO brand, but they missed some opportunities to make it even more engaging.  Take a look and let me know if you agree:

other brand experience briefs:

• Pie-o-logy
• uniqlo
• 77kids

Change is good.  It’s more than good – it’s necessary for growth.  Companies need to evolve their offerings in order to keep things fresh and their customers interested.

But what happens when a company changes its business model in a way that strips away a valuable element of its brand equity?  Is it able to recover lost equity and maintain its appeal?  We’ll find out, given the recent announcement that ShoeDazzle is scrapping its monthly subscription model.

background:  Just three years ago ShoeDazzle made a grand entrance to the e-commerce scene.  The company’s innovative approach was based on offering a personalized selection of shoes, handbags, and jewelry curated by Kim Kardashian to members who paid $39.95 a month.

The company was founded by two attorneys (including Robert Shapiro of OJ Simpson trial and LegalZoom fame) and Kardashian.   Backed by Polaris Venture Partners and Lightspeed Venture Partners, the company turned heads in the tech, retail, and fashion sectors.  Last year it secured $40 million in a financing round led by Andreessen Horowitz.

ShoeDazzle now has over 10 million members.  When you join, you fill out a taste profile which enables the site to curate a selection of products and present you each month with a personal “Showroom.”  Over time, the site’s recommendation algorithm gets more sophisticated as it takes into account your actual purchases and so you end up feeling like you’re shopping from a collection of items handpicked just for you.

That, plus the inexpensive price tag, free shipping both ways, and phenomenal in-box presentation (see below), has generated legion of fans who serve as ambassadors for the brand (recent love tweets include “ShoeDazzle is the greatest thing since sliced bread.  No joke.” “OMG, shoe addiction” and “Just got my first pair of shoes from ShoeDazzle.  IM IN LOVE.”) and recruiters of new customers (members get points and discounts for every friend that becomes a member.)

now:  Given how successful ShoeDazzle has been, it’s no surprise it has spawned a throng of copy cats including Kimora Lee Simmons’s Just Fabulous and Rachel Bilson’s ShoeMint.  And as a result, there’s been some buzz about “subscriber saturation” and questions about the viability of the concept.

Enter Bill Strauss.  The cofounder and former CEO of ProFlowers, was recently named CEO at ShoeDazzle “because of his experience retaining high levels of customer satisfaction at a booming consumer Internet company,” reports an analysis in Fast Company.  “He’s very heads-down and focused on operational execution and delighting the customer at a large scale,” Andreessen Horowitz partner John O’Farrell told the magazine.

Strauss has decided to nix the company’s subscription model.  No longer will customers be required to make a selection each month; everything on the site is simply $39.95.

The move is not surprising, given Strauss’ background.  After all he built Proflowers into an e-commerce powerhouse by leveraging sophisticated technology to dominate search engines and build a highly productive customer database.   And at first blush, loosening the requirements and making purchasing easier would be a no-brainer for any website.

But, ShoeDazzle is more than an e-commerce site.  The brand is about more than getting good product to lots of people for a decent price.  In fact, Fast Company reports that Strauss calls the ShoeDazzle experience “akin to one you’d receive at a high-end boutique, where salespeople know your name and your tastes…ShoeDazzle believes consumers are ready for the more intimate shopping experience they get at real-world boutiques.”

This makes his elimination of the subscription model a curious choice.  It’s a move that seems to have stripped the company of important brand equity levers.  No doubt the change will bring some initial growth, but it represents some risky trade-offs:

- trading status for scale – Strauss explains that “what will differentiate ShoeDazzle in the next phase is building the company out to a gigantic scale.“  Scale may be good for your brand if you’re Amazon or Walmart, but not if you’re trying to serve up an experience akin to a “high-end boutique.”  By no longer requiring a subscription, the company has democratized the experience. The monthly commitment had served as a signal of status and brand exclusivity — now there’s little barrier to entry.

- trading connection for choice – “Some people liked the model,” Strauss says, “but a lot of customers told us they’d like to buy two or three times in one month and then maybe not for a few more months.“  So the new model gives customers more choice.  But it also allows for customers to slip away for months at a time, perhaps even forever.  Even though the subscription model had offered customers the option of skipping a month, most customers still visited their showrooms at least once a month.  Without the monthly commitment, there’s no foundation for a regular connection.

- trading urgency for ubiquity – There’s also no reason for a timely customer response.  Opening up the purchasing model will allow the company to “capture as much of that demand as possible,” Strauss says.  But is getting to a large prospect pool that may or may not be interested in buying at some point in the future better than engaging with a smaller customer base that has committed to buying something that month?

Sure the brand still has the cachet of celebrity – and the personalization aspect is a draw.  But as a writer in New York Magazine observed, “It’s probably only a matter of time before all retail websites follow this practice of automatically recommending things to you based on your size, brand preference, and past purchasing history.”

Last year, Andreessen Horowitz’s O’Farrell explained his company’s position with ShoeDazzle saying, “Like their 1920s counterparts, [founder] Brian [Lee] and his team realized the appeal of serendipity and anticipation.  ShoeDazzle members await the first of the month with its new selection with the same avid excitement Book of the Month Club members must have felt as they awaited the mailman with their latest monthly title…The result is a new and genuinely exciting approach to ecommerce that is transforming the way fashion products are marketed and sold.”

Now, it seems, ShoeDazzle is just another website with inexpensive products.

related posts:

• radical differentiation at lululemon
• retail tensions

(Here’s the latest Brand Experience Brief — insights and analysis from my audits of a new or interesting retail or restaurant concept.)

Pie-ology, a new pizzeria concept inspired by Chipotle, delivers a remarkable brand experience — check it out:

other brand experience briefs:

• The Habit Burger Grill
• uniqlo
• ihop express

Last week, the Wall Street Journal featured a piece about Lululemon Athletica’s “secret sauce.”   Although many stories have been written about the retailer of yoga-inspired athletic apparel, this one succinctly relayed the elements that distinguish Lululemon from other brands.

The article talked about the “mystery” of the chain’s strategy, which has propelled it to become a $10BB retailer in less than 15 years.  It’s clear Lululemon practices what designer Marty Neumeier preaches in his book, Zag –  The #1 Strategy of High-Performance Brands.  Marty explains, “Differentiation, the art of standing out from the competition, is not front-page news. What is front-page news, in a world of extreme clutter, is that you need more than differentiation.  You need RADICAL differentiation…When everybody zigs, zag.” [emphasis mine]

Here are three ways Lululemon zags:

1. It doesn’t do formal market research or customer relationship management.  “Instead,” the WSJ piece reports, “[CEO Christine Day] spends hours each week in Lulu stores observing how customers shop, listening to their complaints, and then using the feedback to tweak product and stores.”

It also trains its employees to be customer advocates (a role I recently wrote about in “The Sales Associate of Tomorrow.”)  Salespeople eavesdrop on customers as they fold clothes near the fitting rooms, so they can overhear complaints and pass them along.  And, customers themselves are invited to give input to the company by writing suggestions on a chalkboard that are sent back to headquarters.

Of course research and CRM are valuable tools for most companies – but, sometimes there is no better way to understand your customers than to simply listen.

2. It uses scarcity instead of discounts to generate demand. 

“The goal is to sell gear at full price and to condition customers to buy when they see an item rather than wait.  ‘Our guest knows that there’s a limited supply, and it creates these fanatical shoppers,’ says Ms. Day.”

Lululemon has trained its customers to “buy now” instead of waiting for promotions or looking for redlines.  In fact, the WSJ reports that it sells 95% of its gear at full price and it never puts its core items on sale.  Scarcity is a much more sustainable and brand-building approach to stimulating purchase conversion.

3. It doesn’t offer top-notch customer service. 

The piece quotes CEO Day as saying, “We aren’t Nordstrom.  We aren’t your personal shopper.” Lululemon’s return policy is “very strict,” according to the WSJ:  no products accepted after 14 days, and all must be unwashed and unworn, with original tags.

This is not to say that the company isn’t friendly or doesn’t care about its customers. A quick spin through its blog, tweets, and Facebook page and visits to its stores prove otherwise.  But it’s clear it’s not trying to be something it isn’t.

Zag-ing is really at the core of Lululemon.  The company was started by a guy, a surf, skate and snowboard business veteran.  He created an underground yoga clothing movement by selling products made from performance athletic materials out of a design-studio-cum-yoga-studio.

The company has enjoyed extraordinary success every since.  I’m sure Marty Neumeier isn’t surprised.  In Zag, he writes, “Traditional differentiation is an uphill battle in which companies lavish too much effort on too few competitive advantages:  the latest feature, a new color, a lower price, a higher speed. Radical differentiation, on the other hand, is about finding a whole new market space you can own and defend, thereby delivering profits over years instead of months.”

related posts:

• differentiation through specialization
• differentiate your way to success
• companies to keep an eye on in 2011

(Check out my latest “brand experience brief” — a report with insights and analysis of new and interesting restaurant and retail concepts.)

Fast fashion retailer Uniqlo is on a roll.  I visited the company’s Herald Square location, one of three stores it has in New York City.  Here’s what I thought of the brand experience there:

more brand experience briefs:

• REI in SOHO
• The Habit Burger Grill
• Patagonia’s Tin Shed

On the eve of a special Apple event, it seems the allure of the Apple brand is as strong as ever.  “We have something you really have to see. And touch,” declares the invitation to the March 7^th media event.  Quite a buzz has been building up!

I don’t know if tomorrow’s announcement will impress or disappoint – nor do I know how long Apple will continue to rock our world.  But I remain fascinated by what I can only describe as the magical appeal of the Apple brand.  To try to understand the magic, I looked for clues in Walter Isaacson’s biography, Steve Jobs, and put together this slide show of what the book teaches about brand-building:

Once upon a time, Wi-Fi was a novelty in coffee shops.  It was an unexpected bonus that we encountered when patronizing certain Starbucks or some other forward-looking establishments.

But what was once a delight if found has become a disappointment if not found, or not working, or not free.  Now any self-respecting coffee shop wouldn’t be caught without free Wi-Fi.

And now hundreds of thousands of people flock to coffeehouses to settle into comfy chairs, sip lattes, and use the Wi-Fi, without questioning whether or not Wi-Fi will be available there (of course it will) and whether or not there will be a charge to use it (of course there won’t.)

So lately I’ve been thinking about how much of the $4 that people typically spend during a trip to a coffee shop is paying for the coffee and how much is paying to use the Wi-Fi.  Meaning, how much of the value derived from a coffee shop visit is from the coffee and how much is from the Wi-Fi? – or for that matter, from the comfy chairs or the music selection or even the electrical outlets needed to recharge a phone or computer (one of which is invariably about to run out of juice)?

What I’m really asking about is the value of the entire customer experience compared to the specific product purchased — and, which aspects of the experience deliver the most value.

These are relevant questions to any company that’s trying to navigate all the new opportunities in retail.  It may seem there are so many new ways to enhance the customer experience – whether through “magic mirrors,” interactive displays, or salespeople who know my entire purchase history and social profile when I walk in the door.

My coffee/Wi-Fi meditation has led to a few conclusions:

• Companies must deliver on the basics.  In the customer experience, there are need-to-haves and nice-to-haves.  It’s important to know the difference and ensure flawless execution on the essentials.  Case in point:  I was tickled the other day when I discovered the following sign on the door at Macy’s:

Wi-Fi would certainly help in doing research on products and brands, finding items and special offers, and yes, comparing prices.   But then I realized I hadn’t made a purchase at Macy’s that day because they didn’t have the item I was looking for in-stock.  Easy returns, in-stock inventory, and good customer service are basics that are still more highly valued than Wi-Fi.

• But the basics change, so agility is essential.  What customers value changes quickly and so companies must be able to anticipate — or at least respond – to those changes.  They must be able to institute new policies and pricing strategies and adopt new processes and technologies quickly – and not make the customer suffer for it.  Tablets may seem like a great way to help salespeople deliver better customer service, but not if they struggle to use them expertly.

• And the basics differ from customer to customer.  So, companies need to be clear on who their target customer is – and to focus on what their target customers value.   To me, good coffee and free Wi-Fi are the basics I expect and value at a coffee shop.  I couldn’t care less that I can use a mobile payment application at Starbucks because I’m not interested in using my smartphone as a wallet (yet).

But one of colleagues says that mobile app is the primary reason he chooses Starbucks over other options and he expects to be able to use it whenever he visits a Starbucks.  Which one of us is the chain’s target customer? I don’t know, but Starbucks should.  And the company should design its customer experience with one of us in mind.

We’ve all heard – I in fact have said – that consumers want more than products, they want experiences.  But in a way, perhaps we shouldn’t delineate the two.  It would be helpful for companies to think of experiences as products and to be as diligent in trying to understand what customers want in their experiences as they are in understanding product requirements and expectations.

related posts:

• build your brand with a cohesive customer experience
• it’s not about the coffee
• note to ceo:  take a crap