If, as they say imitation is the sincerest form of flattery, fast casual restaurants should be flattered by the recent efforts of McDonald’s and other quick-serve restaurants.  Many fast feeders are trying to emulate chains like Chipotle, Smashburger, and Panera, since fast casual players have stolen share from them for the last couple of years and outrank them in customer studies.

So these companies should be flattered – but not worried.  Because despite QSRs’ best attempts to mimic their more upscale competitors, their efforts haven’t been successful to date.

Take McDonald’s Metro for example.  I had read about the opening of this new concept on the famed Las Vegas strip.  Billed as the world’s first and only Metro, the store opened a couple of weeks ago with a flashy party replete with red carpet and live DJ.   McDonald’s official Josephine Wee was quoted by several sources saying “The restaurant…creates a unique experience for diners.”

So I made a point to visit the location while on business in Sin City last week and was all set to do a Brand Experience Brief to relay the findings of my audit of this “unique experience.” But upon visiting the store, I realized I would have very little to say.

Sure the site was very cool-looking.  The wood and metallic building materials gave the place a contemporary feel – as did the digital menu boards and crisp black employee uniforms.  And I was pleasantly surprised by the fun furniture, graffiti-like murals, and mod lighting fixtures.  The place used all the cues of a fast-casual restaurant.

The disconnect came at the menu board, though.  It offered the same food and the same drinks as any other McDonald’s.  I ordered a breakfast burrito to see if there would be anything “fast casual” about it, but the tray it was served on, the packaging it came in, and the ingredients it was made of all were “fast food.”

I walked away from the store feeling as if McDonald’s had simply put lipstick on a pig and called it “Metro.”  If the company intended to provide a fast casual experience, it fell far short.  And McDonald’s is not alone.  I’ve encountered the same phenomenon at other fast food chains.  An upgraded restaurant experience is about more than a cool environment – it’s about the food.  It’s a restaurant, after all.

And therein lies the broader point.  A brand experience is comprised of everything the customer experiences.  Improvements in only one area are not enough to compensate for shortcomings in others.

And the core of the business is where the focus of evolution should be.  Upgrading the ancillary aspects of the experience is far less important than optimizing the core.  For McDonald’s and other quick serves, that means the food.  For retailers, that means the product.  For banks, that means the service.  For products, that means the core functionality.

It’s common knowledge that customers aren’t fooled by entertaining or flashy advertising.  The same can now be said about design.  A veneer of style or higher quality will only get you so far.  Customers won’t pay more or go out of their way for something that only looks better.  It has to be better.

And that’s why, at least for now, fast casual restaurants have nothing to worry about.

brand experiences that are better:

• Pie-o-logy
• Walgreens
• Starbucks

(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.)

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

BurgerKing, Volvo, Coke, LEGO, and ShoeDazzle were some of the brands in my recent conversations.  Peruse this recap of my content this month to see what you might have missed:

brand-building:

• What a Strong Brand Does for a Small Business — my OPEN Forum column on why small businesses should invest in brand-building from the start
• Has ShoeDazzle Lost Its Dazzle?  — a POV on ShoeDazzle’s move away from its subscription model
• Basketball Teams and Brands – a bit on what brand-builders can learn from Josh Harris’s moves to rejuvenate the 76ers

business and innovation:

• Once Upon a Company – a guest post of mine on the upMover blog about the internal power of storytelling
• Storytelling Strategies – a follow-up bit on storytelling best practices
• Could ‘Pink Slime’ Be Rebranded? – a comment from me on what “slimed” companies should do
• From Values to Action – a post relaying what I learned about values-based leadership from Kellogg professor Harry Kreamer
• Hip Help – a bit about how Help Remedies is turning drug marketing on its head
• Mary-Ann Somers on Coca-Cola’s New Ventures  — an interview about the work of Coke’s Venturing and Emerging Brands business unit

brand communications:

• Burger King Enlists Celebs to Call Attention To New Menu That McD’s Already Has — a quote of mine about how Burger King seems to be copying others, instead of leapfrogging them
• McCabe on Advertising – a bit about how Ed McCabe used an iconoclastic approach to etch into our brains Volvo’s brand identity

restaurants and retail:

• Make Your Ethnic Concept a Familiar Favorite – my latest QSR Magazine column about introducing an unfamiliar concept
• Five P’s to a Priceless CE Retail Experience – a guest post on CEA’s Digital Dialogue about how to combat the showrooming effect
• Fast Food Line-Up – a bit comparing brand perceptions and tagline recall for Burger King, Wendy’s, and Taco Bell
• Brand Experience Briefs:  video briefings of my insights and analysis of a Chipotle-inspired pizza concept, Pie-ology, and the LEGO store

Now…onward to May!

(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

Between spring break, March Madness, and primary season, there’s been a lot going on outside the brand world this month.  But there’s also been a flurry of new brand-building content going around.  Here’s a handy recap of what I contributed to the conversation:

brand-building:

• Steve Jobs on Brand-Building – a slide show of what Walter Isaacson’s biography of Steve Jobs teaches about brand-building
• 5 Lessons from NBC’s ‘The Voice’ on How to Differentiate Your Brand – my OPEN Forum column on increasing brand differentiation with approaches used by the contenders on NBC’s The Voice
• Start Strong, Stay Strong, Finish Strong – more important lessons for marketers from The Voice
• Marketing As Product and Profit – a bit about how Red Bull has transformed content from a marketing tactic into a business unit and from a loss leader into a profit-center
• Apple Brand Magic – my “brand as business brief” on how everything Apple does its magic

restaurants and retail:

• Radical Differentiation at Lululemon – a blogpost on the “mystery” behind Lululemon’s phenomenal growth
• How to Succeed in the Restaurant Business – wise advice and juicy tidbits from restaurant leaders at the California Restaurant Association Orange County Chapter’s CEO/President’s Panel
• Brand Experience Briefs – videos of insights, analysis, and images of the brand experiences at Uniqlo‘s Herald Square megastore, and The Habit Burger Grill, a 50-unit quick serve burger chain
• The Sales Associate of Tomorrow – a post about the evolving role of the retail sales associate role
• Retail Tensions – a post based on Interbrand’s Best Retail Brands 2012 report about the tensions that now define retail

business and strategy:

• Professor Peter Fader on Customer Centricity – my interview with Wharton Professor Peter S. Fader about the myths about customer centricity
• Best Brands and Companies Lists – a comparison of popular best lists including Interbrand’s Best Global Brands, Fortune 500, Most Admired Companies, Best Companies to Work For, and Most Innovative Companies
• The Challenge of Companies and Rock Bands – a bit from Switchfoot band leader John Foreman about the bellcurve of a song which mirrors that of a company’s lifecycle

marketing tactics:

• 3 Ways to Improve Local Marketing – my QSR Magazine column on the three P’s of effective local marketing
• Taco Bell Wins in Co-Brand with Doritos – data from ePoll that shows Taco Bell brand stands to gain significantly from its new Doritos Loco Taco — but what’s in it for Doritos?
• Why Would Anyone Buy Naming Rights to a Highway? – insights quoted in BBC News about how companies would consider highway naming rights just to be different

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

The folks at Deloitte recently released, The Next Evolution: Store 3.0,  a report on the readiness of retailers for the store of tomorrow.  Although the report offers a somewhat limited and biased perspective since it is based on a survey of only 39 current retail executives, it raises some important questions about the requirements of the future store.

One point caught my attention: the role of the sales associate.  “As customers’ purchasing behaviors evolve, the sales associate role must evolve with them,” the report rightly stated. It laid out primary salesperson tasks/skill sets:

• POS assistance
• Purchase selection assistance
• Specialized product knowledge
• Technology savvy
• Brand ambassadorship

“Today the top three most important responsibilities and skills of the sales associate are POS assistance, purchase selection assistance, and specialized product knowledge,” reported the survey respondents.  “As we look to the next three to five years, survey respondents pushed specialized product knowledge and brand ambassadorship to the top of the list, ahead of POS assistance, as a store employee’s most important roles.”  And the report predicted that, “Five or more years from now, the sales associate is expected to become a technologically-savvy brand ambassador with specialized product knowledge.”

While this direction is absolutely on-target, there are some key tasks/skills missing from the report’s list of qualifications of the sales associate of tomorrow:

salesmanship – Retail salespeople need to be skilled in the art of selling, i.e., establishing rapport, explaining value, overcoming objections, etc. This may seem like a no-brainer, but with the current trends like reductions in training and moves away from commissioned sales, salesmanship at retail is becoming a lost art (see another post of mine on this subject.)

customer relationship building – In retail, salespeople are a critical piece of a company’s customer relationship management program.   A robust customer database is only valuable when it’s used, and not only by corporate folks.  Salespeople on the floor need to understand who their customers are, what their specific needs/wants/preferences are, how to provide personalized service, how to foster continued loyalty, etc.

customer ambassadors – Salespeople glean valuable insights about customers since they’re interacting face-to-face with them every day.  As such, they can serve as customer ambassadors to the company.  Fast fashion retailers like Zara use input from salespeople to inform product design.  Store layout, service policies, product quality, and assortment are other areas where salespeople’s perspectives are invaluable.  Companies need to train salespeople so they know how to integrate customer insights with company priorities when giving input, and they need to develop processes for incorporating salespeople insights into the company’s strategies and plans.

Rising labor costs are squeezing already thin margins and so retailers may feel a need to scale back on sales floor coverage, salesperson training, and infrastructure enhancements that help salespeople do their jobs effectively.  And with shiny new objects like mobile devices, augmented reality, and social shopping apps, retailers may be tempted to favor technology investments over people ones.

But it would be shortsighted to discount the importance of sales associates in the store of tomorrow.  The Deloitte report closes with a strong exhortation for retailers to revive their talent management strategies:

“As customers increasingly demand a more personalized experience, your sales associates become even more critical in achieving that goal. That means investing in your employees by providing the necessary skills, training, education, compensation, and career-development options to increase product and technical knowledge, among other skills. It also means equipping them with the right technology so they can easily and conveniently provide customers with instant product information, purchase history, or customer preferences. The renewed investment in the sales associate as a brand ambassador will bring back the confidence in retail as a profession, and convert browsers to buyers.”

In other words, a skilled salesperson could quite possibly be the final bastion against the showrooming trend that looms large over brick-and-mortar retailers.

related posts:

• retail tensions
• 12 truths to guide retailing in 2012
• retail evolution

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: