Retail is a lot like dating.

© 2011 Liquid Agency, Inc. CONFIDENTIAL. DO NOT DISTRIBUTE.

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Retailing is a lot like dating.

How to win your way to a consumer’s heart.

I LOVE IT!!!

How to win your way to a consumer’s heart.

I LOVE IT!!!

And then their wallet.

I’M BUYING IT!!!

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Let’s face it. Retail is not what it used to be.

“The convergence of a new consumer paradigm and an overcrowded marketplace has finally brought the (retail) industry to the brink of fundamental change.”

Robin Lewis CEO, The Robin Report

Let’s take a closer look at what’s happening.

And how we can leverage it.

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OLD MODEL

RETAILERS/BRANDS HAD THE POWER

ONE SHOPPING PLATFORM

“I NEED STUFF”

FOCUS ON ACTUAL CURRENCY

STORE = PLACE

CONSUMER HAS THE POWER

MULTIPLE SHOPPING PLATFORMS

“I WANT AN EXPERIENCE”

FOCUS ON SOCIAL CURRENCY

STORE = INTEGRATED BRAND EXPERIENCE

NEW MODEL

“Welcome to a new era of marketing and service in which your brand is defined by those who experience it”

Brian Solis Digital Futurist The Altimeter Group

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What are the key insights?

Engaging experiences help build relationships.

1 Relationships lead to more and better transactions.

2

A couple of facts and figures:

Create a negative

experience 89% Percentage of

customers who tend to switch

to a competitor’s brand

SOURCE: 2011 RightNow Customer Experience Impact Report.

Average cost of losing a customer:

SOURCE: KissMetrics – The Price of Bad Customer Service

$300

Let’s put this in perspective:

JC Penney lost 1,000,000 customers in 3 months.

SOURCE: Forrester / The Business Impact Of Customer Experience, 2012

Which means they lost this much revenue in that period.

$300,000,000

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In today’s world consumers expect more from retailers and brands.

They want to feel: • Understood and engaged. • Entertained and amused. • Surprised and delighted. • Flattered and appreciated. • Special and unique

They want to be courted.

I told you, it’s a lot like dating!

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Consumers want engaging and rewarding experiences.

By embracing this “want” we have an opportunity to build stronger and more meaningful relationships.

“Consumers today seek reciprocal relationships with partners who ‘get’ them—who are into the same things, who speak their language, who want similar outcomes in life and who are willing to be invested in the relationship. Retailers and brands should seek meaningful encounters, rather than just incenting cold, one-time transactions.”

Dee Warmath UoW Center for Retailing Excellence And fierce Hockey Player.

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Get it?

Not just “cold one time transactions” “Meaningful encounters”

Let us tell you about STORY.

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STORY is 2000 square foot retail concept in NYC that takes the point of view of a magazine, changes like a gallery and sells things like a store.

Every four to eight weeks, STORY completely reinvents itself and features a new theme, trend, or issue – through merchandise selection and retail design.

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The idea was to create a retail concept that could serve as a matchmaker between brands and consumers, integrating strategies of marketing, merchandising, and business development.

Sounds like “dating” again.

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STORY introduces innovative ideas about creating engaging experiences – from pasta making classes to talks from TED luminaries, inspiring brand partnerships with start-ups and Fortune 500 companies like HP and Pepsi – and consistent creative collaboration.

“Don’t think of sales per square foot but experience per square foot”

Rachel Schechtman Founder STORY / Retail Store

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RESULTS:

On average, most new retail concepts take about three years to turn a profit. STORY was profitable in year 1 – and it has become a media-darling, attracting new customers, much bigger or much cooler brands, and is continuing to evolve and grow.

More facts and figures:

SOURCE 1: Harbor Industries: Industry Trends and Insights SOURCE 2: Forbes Magazine / Customer experience: Is it the chicken or egg?

Percentage of consumers who will pay

more for a better experience

Consumers who are emotionally

connected with a retailer are more likely

to shop with them

4X 86%

Anthropologie sure knows how to romance.

“We spend the money that other companies spend on marketing to create a store experience that exceeds people's expectations. We don't spend money on messages—we invest in execution.”

Glen Senk President of Anthropologie

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Umpqua reimagined the banking experience. Then did it again.

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Banks are boring.

So, Umpqua Bank decided to completely change the experience.

Technology has been depersonalizing the banking process. The banking industry is mostly focused on efficiency and transaction.

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They started with a brand perspective.

BRAND DNA AUDIENCE

Community Prosperity Localists

Slow Movement

-- Localism

TRENDS

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Umpqua built an environment where their customers like to be.

Umpqua delivered a banking experience that provided a sense of community – inviting customers to linger, sip coffee and shop for services.

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Umpqua 2.0

Later, Umpqua applied social networking ideas to a physical community bank and altered the community experience. -  A community table allows groups to meet -  An interactive mosaic showcases community events/activities; -  Offerings were made more accessible to reflect the increasing

desire for transparency; -  And, in its dedication to small business, conference rooms

were offered as a service.

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Umpqua 3.0

Recently, Umpqua rolled out yet another iteration of its bank experience to include a “Discovery Wall” -  An interactive touchscreen showcasing financial tools and info. -  “Return on Responsibility”, featuring real-time information about

how Umpqua supports the community (hours volunteered by bank associates, youth financial literacy initiatives, charitable contributions made by Umpqua, etc.)

-  “LocalSpotlight” - featuring local merchants and their products. -  There’s even a hotline phone so customers call the bank’s

president directly.

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RESULTS:

A better experience helped Umpqua grow from $120M to $8B and has meant substantially more deposits, more loan purchases, better recruits and a community of happier customers.


SOURCE: Forrester / The Business Impact Of Customer Experience, 2012

Loyal customers spend more than new customers.

Retailers that invested in

relationships saw their sales increase

by this much. (Without increasing

their marketing budget)

33% 50%

The customer journey has changed.

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Consumers expect better experiences.

They want to be courted not to be sold.

Instead of thinking about the path to purchase think about the journey to a relationship.

Sounds like dating again!

The path to purchase has changed.

A B

The old path

The journey to relationship.

A B

The new path

The old path

A B

Introduce yourself.

Get to know her.

Invite her in.

Learn what she likes.

Surprise her.

Understand her.

Entertain her.

Help her discover something new. Anticipate

her needs.

Thank her.

Inspire her to share.

Keep in touch.

The path to purchase.

The journey to relationships.

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Relationships lead to transactions.

To go after the single sale and skimp on the relationship is to miss out on an entire community of customers and future transactions.

“We are evolving into a KINSHIP ECONOMY in which the job of the brand is to facilitate and foster relationships and connections among consumers.”

“Brands need to offer social currency that consumers can spend with other consumers.”

J. Walker Smith The Futures Company

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Create experiences that add value.

In this kinship economy, along this new path, communications should focus on courting the customer, not selling to her. Brands need to add value, not solely “sell.”

And to add value they must create meaningful, relevant, interesting experiences.

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And here’s why it matters:

A B

Introduce yourself.

Get to know her.

Invite her in.

Learn what she likes.

Surprise her.

Understand her.

Entertain her.

Help her discover something new. Anticipate

her needs.

Thank her.

Inspire her to share.

Keep in touch.

B

ACTUAL CURRENCY:

More customers More transactions More margin

SOCIAL CURRENCY:

Positive conversations Positive reputation Social network

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It may sound crazy.

It is bold to tell retailers and brands to make the purchase secondary and invest in relationships first. But it also makes good business sense. Because those relationships will build social currency. And that social currency will pay off in actual currency now, and down the road.


SOURCE: Dr4Ward / What Is Social Currency And How Does It Effect Social Commerce? Infographic

Percentage of brand marketers saw an increase in website traffic after investing just 6 hours per week on social media.

74% Percentage of shoppers who share their purchases on social networks.

55% Percentage of consumers that rely on social networks to guide their purchasing decisions.

74% Percentage of revenue that brands are expected to generate through social media by 2015.

50%

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Conclusion:

Engaging experiences help build relationships.

1 Relationships lead to more and better transactions.

2

Here are a few dating tips.

Want to do better at retail?

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Get noticed. 1 You can’t start a relationship if you’re a wallflower. Go from bland to brand. Stand out from the rest.

Be honest. 2 Stay true to your brand personality. If it feels forced to you, odds are it feels forced to your customer too.

Get to know her. 3

Sophisticated digital tools mean you don’t have to assume what she wants. Use them the right way to ensure you understand her needs and wants.

Give her something special. 4

Give her something she can’t get somewhere else. Resist the temptation to follow the crowd. What’s right for one brand, may not be right for you. Find what makes you unique and use it.

Surprise her. 5 Keep her engaged with something unexpected–something that invites her back again and again.

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Stay connected. 6 Thoughtful notes, updates and conversations let her know you’re thinking of her, even when she isn’t buying something.

Don’t over do it. 7 Yes, technology is great. But just because you can, doesn’t mean

you should.

Be nice to her friends. 8 The opinion of her community goes a long way–and can make

or break your success in the end.

Remember: It’s not all about you. 9 In this new era of retailing, the consumer has the power.

And it’s all about her.

Good luck.

Thank you.

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We’re a brand experience agency.

From the very beginning, we set out with a clear purpose — help our clients create value for their businesses through smart and effective branding programs. Over time it became evident that the biggest opportunity for this to happen rested in our ability to transform the way brands engage with their audiences. So, we decided to focus on creating unique, relevant and interesting experiences across the touchpoints that really matter. Thankfully, we had the chance to be exposed to the way that things are done in Silicon Valley — which taught us to embrace innovativon and inspired us to develop new methodologies and new tools. We're now considered the No. 1 agency in Silicon Valley. We love what we do. And like to work with clients that challenge us to create amazing experiences.

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USA SAN JOSE, CA SAN FRANCISCO, CA PORTLAND, OR NEW YORK, NY

EU NOTTINGHAM, UK

LATAM SANTIAGO, CHILE

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Retail is a lot like dating.

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