Welcome To The Experience-Economy!
Come with me now as we journey into the next Millennium. Sounds a little scary? Yes. Scary, exciting, and exploding with opportunities! I'm asking you to join me as we analyze what's going on, and how we're going to meet the new, and exciting challenges that are taking place very quickly ~ too quickly. Stop twitching! We're going to examine how to make your operation take off and take flight! We're fast-forwarding into a whole new "experience!" ~ A whole new era! I want the consumer to visit your store in person ~ and not by pushing another .com" on the World Wide Web!
If all you are selling is a commodity then there is no way for your customers to differentiate your store from the competition. As we discussed in the last issue of FURNITURE WORLD, without differentiation the consumer will base their selection on price and price alone. Stan Davis and Christopher Myer state in their book Blur: The Speed of Change in the Connected Economy, "In today's world of time-starved consumers and speed-obsessed businesses, the Internet increasingly turns transactions for goods and services into a virtual commodity pit!"
Goods and services are no longer enough. We're heading for a new economy, a different way of doing business. Welcome to the OTHER "e-economy!"
THE "EXPERIENCE ECONOMY!"
Why do we spend $3-$5.00 for a cup of coffee at Starbuck's? Is the coffee that good? No way! We're paying for the Starbuck's Experience! We want to be there. We're willing to pay admission to be a part of the experience.
At Border's we spend $6.00 for a cup of coffee and a dried out muffin. Why? It's the experience. We become engaged. We enjoy the experience. Price has nothing to do with it. Price does not fit into the equation at all.
Sure, I've used Amazon.com, once! Back I went to my local Border's. They know the sound of my car in the lot! (I'm in the "friendly skies" all the time, and do a lot of reading) The people in there are great! They want to see the latest books I've ordered. They want to know how I've been, where I've gone and what I've seen. It's like old home week. I can't wait to get there. I pick up what I ordered and see what else is new. By the time my shopping bag is full, I've touched base with everyone and had my "caffeine fix. The experience is complete. Do I have the time to do this? No way! But . . . I make sure that I make the time!In this arena the goods become the "props," the stage becomes the "service" and the "experience" is the perceived value to the consumer. When the consumer becomes engaged in a personal way in the experience, they own it!
Nathan S. Ancell, founder of Ethan Allen, passed away on May 31st. He taught so much to many of us in the industry. These are his words; "The commodity we need to sell is 'home decoration.' This is what customers are desperately seeking and the products themselves are only the medium for such expression. Customers come to the store to buy an atmosphere, just as much as furniture... What the customer really wants is direction in achieving a livable, lovely home environment."
Is that where this industry should be focusing today? You bet! Make your store an experience! "We're in the helping people create beautiful home environments business." So said Nat, and rightly so!
As long as we keep focusing on price and monetary gimmicks (No financing till the year 3002!). We're going to outprice and outsmart ourselves right out of business! Consumers know who is the "cheapest" in town. Guess what? There can't be two "cheaps"!
The stampede you will hear will not just be from the sound of their feet on the pavement -- down the street to the competition. The sound you will hear will be your customers as they log on, tune in, and gear up their modems! Not all Internet home furnishings e-tailers will pursue a low price strategy (see the June/July issue of FURNITURE WORLD). The fact remains that your customers will be able to find the lowest price somewhere in cyberspace.
We're sky rocketing into the "e-commerce," the "e-economy!" Studies conducted by the Gartner Group show that by the year 2000, "online consumer sales will reach $20 billion, an increase of 233% over this year's estimated $6.1 billion."
This thing is becoming a monster! Right now e-commerce is only 1% of the $8.5 trillion U.S. economy according to Stephen Roach, chief global economist at Morgan Stanley Dean Witter. But it's picking up momentum on a daily basis and we can't be trampled in the stampede by having our battle cry still be "price." After all, they're the ones selling just a "commodity!"
Our new motto must be a "People ~ Up Close & Personal!" We must focus on people. Your employees and the people who are looking to you for a shopping experience. We must meet them human to human - eyeball to eyeball. Look them in the eye and help them. It's their home! They want help creating their environment. They want an experience. Engage them in the process as you're helping them. That's what they really want.
"Too many of us do not understand what home means to a woman and her family and the extent of her great frustrations in trying to decorate it." More words of wisdom from Mr. Ancell.
Furniture.com is planning to spend $5M for an ad campaign to entice the apprehensive furniture buyer to "browse" for her new home without ever leaving her old one! They're offering Consultants who make suggestions based on what styles the customer says that they want. But, as we've been discussing, in past articles, does the customer know what style they want! What they say they want and what they really want can be very different.
In the new e-economy there are no restrictions in time and space. There are lots of changes. We must look at these changes as challenges, not obstacles. We have some exciting new opportunities here and that's what we need to examine.
That's right, we're talking change; real change here. Conventional retailers need to step out of their comfort zones. There's a funny thing about comfort zones. Business people can be extremely miserable in their own personal zone. But, even misery can seem better than changing business practices that have worked in past years.
Or to put it another way "To a worm in horseradish, the whole world is horseradish. You can't get out of horseradish unless you know you're in it!" Well, if you are in it, you need to get out!
"The BEST Way To Predict the Future ~ Is to create it!" - Peter Drucker
One of my favorite sayings is "When you get really successful, that's when you really get going! Because if you're not part of the steamroller, you're part of the cement!" Helen Keller agreed, "Life is either a daring adventure or it is nothing."
Most of us haven't realized that, or don't want to think about it. Instead we live in a box that keeps us where we are. The walls in the box are decorated with the status quo. It's time to move! It's time to redecorate our own homes!
The first thing we have to do is go find those crayons that are hidden, buried - somewhere. Yes, that's right. We're taking one gigantic leap out of the proverbial box and coloring outside - way outside - the lines! If we don't make this move, we end up shouldering too many "shoulds!"
To quote Faith Popcorn, President of BrainReserve, "all of us who work together try hard to remember that "should" is one of those words we should try hard to forget. "Should" is about other people's expectations. "Should" is about being static, resisting change." If we keep resisting, if we stay passive, it will be bland leading the bland!
What worked yesterday, won't necessarily work today, and it certainly will not apply to tomorrow. When you're dealing with humans, the only thing constant is change.
IT'S A REVOLUTION OUT THERE!
- The Technological Revolution - digital, wireless, fearless! If we're not careful the Internet will become the best location in town! We'll "visit" this topic some more, later.
- Time Revolution - I used to say "your time - your money." Wrong! Today time is not money - it is life!
- Psychology Revolution - There is a new sense of self-awareness. We're striving for self-improvement. Alternative medicine, organic health stores, yoga, aromatherapy, healing mind, body, & soul are making us take at a NEW look at who we are and where we are going. Is it where we want to go?
- Information Revolution - We want to be educated, informed, and kept up to date on what exactly is happening. We want to know now and what's in it for us!
- Love Revolution - We're caring more about other people. We're donating more to charities, we're mentoring to children, we're "giving back." At the same time we want to be cared about.
- Consciousness Revolution - Instead of operating our lives on "autopilot," we're becoming more aware of who we are. Where we want to go. Which direction we want to take our lives!
- Job Revolution - Job security today has become an oxymoron. More of us are taking charge of our own destinies. Women are starting home-based businesses at a ratio of 2-1 over men. Workers are moving from their "cubicles" to their own space in their own homes. People are realizing that someday is not a day of the week. It's now!
- Education Revolution - People of all ages are going back to school. They want to become more informed, more self-sufficient. They want to become more! They're re-careering and multi-careering!
- Connectivity Revolution - With all the new infrastructure for communication we are connecting and communicating all over the planet in a nanosecond! But, we also want to connect with people like us. People who share the same interests and concerns.
- The Moving - out Moving-on Revolution -With security systems and burglar alarms doing record business, people are moving out of the cities. They are even going out of the suburbs to what some researchers are calling the "exurbs." They are changing their definition of home and going back home!
Cathy Finney is President of Ancell Affiliates \"T 'N T." She is a noted motivational speaker, sales trainer, and management consultant. Questions can be addressed to her care of FURNITURE WORLD Magazine at firstname.lastname@example.org.
Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada. In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact email@example.com.