Consumers, particularly millennials and members of Generation Z, have transitioned from valuing things to valuing experiences, and businesses are explicitly designing for that purpose. StubHub President Sukhinder Singh Cassidy sees three motivations behind the transition: a perception that there is more happiness in experiences, the quest for social media “likes” — which are often linked to experiences — and “FOMO,” or the fear of missing out.
Companies that successfully stand out in today’s experiential retail market have one thing in common: Superfans — loyal customers who amplify a brand’s voice, especially on social media. At a discussion onstage at NRF 2019: Retail’s Big Show, Cassidy spoke to three leaders at companies that have successfully attracted large audiences — CaaStle, Poshmark and TaskRabbit — about creating environments that nurture superfans.
Business model innovation
New and exciting innovations capture attention and deliver ”surprise and delight” moments to customers. Digital marketplaces and subscription models are two concepts in this category that are gaining popularity.
CaaStle allows fashion brands to offer subscription-based rental services to casual customers who purchase occasionally and convert them to loyal fans who wear over 100 items from the same brand in a year. “By the very nature of the business model being new and interesting,” CEO Christine Hunsicker said, “it’s bringing new, younger people into the brand.”
Poshmark’s marketplace helps “seller-stylists” sell previously worn clothing or develop full-fledged fashion brands while allowing buyers to rate stylists. CEO Manish Chandra said 5 million sellers post 18 million items each day on the platform and over 70 percent of buyers purchase more than 20 items a year, even though no returns are allowed. “We are changing and challenging many of the norms that are part of traditional retail,” he said.
“Experiencify” your product
“More and more retailers are moving toward services in-store,” TaskRabbit CEO Stacy Brown-Philpot said about IKEA’s acquisition of the service marketplace. “We’re just an extension [of IKEA].” TaskRabbit’s presence at the furniture retailer helps both companies attract new customers and enhance existing relationships. When customers visit IKEA, they may now buy five items instead of one, because the shopping experience is that much better. “You’re not the one who has to [build] it anymore,” Brown-Philpot said.
Cassidy said retailers don’t even need a tangible product to be able to offer an experience. StubHub unveiled a new artificial intelligence-powered model of Atlanta’s Mercedes-Benz Stadium in time for Super Bowl LIII, where customers could explore stadium views from different seats and buy tickets directly on the app.
Poshmark has a simple rating system of “likes” that empowers sellers to build their own brands, while creating diverse and engaging content. Many users on both the buy and sell sides embrace the marketplace’s social aspects and engage frequently with each other — activity that enhances the shopping experience on both sides.
At TaskRabbit, “taskers” create profiles showcasing their work, especially with IKEA furniture, which elevates both the platform and the retailer and “brings in a whole new superfan to TaskRabbit,” Brown-Philpot said.
Providing seamless convenience is key to success in today’s highly competitive retail environment. “Think about where the modern consumer is,” Hunsicker said, “and try and meet her there.”