Michael Fox reflects on the changing nature of consumer demand, no longer satisfied with mass production, it’s all about the experience and differentiation.
I recently read an article by Jon Bird, entitled ‘The End of Stuff‘ – in it he discusses how consumers are moving away from conspicuous consumption and instead are spending more on digital experiences, both digital and physical. He cites as evidence the explosive growth of Apple’s App Store and Flight Centre’s impressive 24.5% expected profit increase in the most recent financial year.
We’re also firm believers in this trend. The growth of experience sites like RedBalloon (of which we’re part) highlight this.
Traditional retailers are also capitalising on this trend. Woolworths’ new grocer chain Thomas Dux is a simple and fantastic example of experiential retailing. Rather than walking into Woolworths to buy a packet of corn chips off a standard store shelf, walk into Thomas Dux and you’ll see a beautiful centre aisle display of corn chips where you can taste them, try them with salsa and also where the supporting marketing material is displayed. When I popped in to take the above featured photo they were serving slices of smoked salmon pizza using ingredients all available in store.
This consumer trend towards ‘experiential retailing’ also lends itself quite well to the online mass customisation space. Why would you want to buy a normal pair of shoes when you can have the experience of designing your own shoes and having them made for you? Why settle for off the rack shirts and suits when you can design these too? There are a number of great companies providing this service, such as Joe Button, Blank Label, YouTailor and Indochino, that are all doing well. And why settle for a standard chocolate bar when you can select your own ingredients?
Mass customisation is no longer just a small business – NikeID turned over $100M in revenue in the niche category of custom sneakers last year (I love their product)!
What other examples of experiential retailing have you seen?