For too long there was a polarised view of physical versus digital retail; reports of the death of physical were greatly exaggerated. Thankfully, a new, more nuanced view has revealed itself. Clearly digital channels are accounting for increased sales, but physical shopping will continue to reign, evidenced by the fact that the likes of Amazon are opening their own stores. Physical retail allows Amazon to provide a more personalised shopping experience and to integrate the online and offline world.
Rather than shifting entirely from the store to the web, consumers are driven by a seamless interplay of both with mobile facilitating the blurring of channels. We need a means of defining how and where to focus investment in both physical and digital channels.
Creating magic from logic
Businesses can’t help but be logical; the same applies to retailers — too often logic wins out. Retailers and brands need to focus on incremental gains across all touchpoints of the customer journey; the aim is to be a bit better than the competition.
By definition, this leads to me-too retail schemes and experiences where spotting and feeling real differentiation becomes incredibly subjective. With this type of thinking, it is no surprise that retailers pay as much attention to supposed ‘category rules’ as they do to their own brand. By contrast, the peak-end rule is a psychological theory. It challenges the way we judge past experiences. The theory proposes that we judge an experience largely on our feelings at the peak (the most emotionally intense point) and the end.
Undoubtedly, this theory is based on logic but when applied to retail, it can unlock magic. Retailers should refocus on creating an emotional peak and towards the final part of an experience, begin to have more in common with film directors to evoke a customer’s emotions and memories.
To stand out from the competition and category norms, retailers need to think like film directors and invest a disproportionate amount of their budget in an emotional spike and finale. Imagine a peak scene from Rocky. For most of us, it will be the moment he runs up the steps and holds his arms up in victory. Directors use the emotional response in signature scenes to drive the overall opinion of the movie; they have the ability to suspend disbelief, immersing the viewer in a new world for the duration of the entire experience.
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Trigger big emotions in-store
The key to creating a memorable peak is to trigger an intense emotion through surprise and delight, because it activates the brain for memory encoding and recall. This means mildly positive emotions such as contentment or relaxation are less likely to make an event memorable than intensely positive emotions such as surprise.
Online shopping is popular as it removes cost, time and effort from the shopping experience. By contrast, in-store shopping adds to the experience by harnessing the sensory and social nature of physical retail. This is where retailers should be focussing — emphasis should be placed on defining your type of movie and establishing what you want to be remembered for. Once identified, these moments need to be elevated to intense and potent experience signatures. German retailer Globetrotter knows a thing or two about creating epic peaks of emotion. Its stores are an epitome of an adventure film with huge canoe pools, climbing tunnels, rain and high altitude cold chambers. Customers are able to test equipment in real life conditions to prepare themselves for upcoming expeditions. Another brand that consistently creates peaks is McDonald’s. For years, its Happy Meal has left kids with a single and strong anchoring memory. That memory isn’t about product or service but the delight of receiving a toy.
Rounding off the experience
The final step of the customer journey is payment and it has a significant role to play in the end-to-end experience. Yet payment has largely been neglected or forgotten about as an area where retailers can add a positive end ‘emotion’.
We can all relate to the pain and frustration of waiting in a long queue or searching for a staffed check-out. Why end a positive experience on such a low? Calcified retail thinking has led to a belief that there is only one way to handle payment. However, this is no longer the case with the advent of self-service and paying via smartphones. Payment at check-out needs to be rethought and improved.
A positive peak and ending will drive perceptions of the customer experience as a whole. Adopting the peak-end theory is a more efficient means of keeping brands top of mind, driving repeat visits both online and offline. So what is the learning? Retailers need to start thinking like film directors — logic is just th e starting point to enhance the shopping experience to create magic.
The author, Dominic Twyford is client services director, Fitch