Experience Manifesto

Rethinking the Mall - Allison Arieff Blog - NYTimes.com

If you haven’t seen this piece by Allison Arieff and you're in the mall business, you should certainly be taking a look. Many of the things we’ve been talking about for years are things that people are just now exploring. The key take away is that the business model of the big mall needs to change, both from a back-end and a front end.

I think that back in 2005, iTunes became the 7th or 8th largest music store in the United States. Think about that. They have no real estate, at least none dedicated specifically to iTunes, and carry no inventory. They don't have to pay for sales staff or worry about returns. And if you look at the typical Apple store, a great deal of its space is dedicated to social functions, not traditional retail functions. Now, if you're a large record store chain, this has got to be a huge challenge. You've got all of this real estate dedicated primarily of the inventory management of music and yet more and more people are buying their music online.

What's always interesting to me is that people in one industry can look at another and say "How can they not see that every thing's changed and they need to change" without looking internally at their own industry. We think that mall developers need to look at their business model in addition to the redesign on the physical space. Many work on a rent + a percentage of sales model, but will that still play in a world where people do more window shopping in the mall and more actual buying online? And, as we ask retail clients all the time, what happens to your retail space if you take away inventory management? Look what I said back in 2006:

So, if the retail space might become more of a showroom and if people don’t mind shopping and having their purchases drop shipped, then what’s the impact on the real estate itself? We see it becoming a much more vibrant and alive social space. A place for people to gather and share their experiences through the brand, rather then sharing their experiences of the brand. Look at the Apple store. Lots of people talking to one another. The theatres where you can learn together as a community. Even the Genius Bar. It’s much more of a social space.

So, what is the value of real estate for retailers today? Does a record store really need to exist as it's been for the past 40+ years? Or banks, grocery stores, fashion retailers? If, thanks to the internet, people are much more comfortable getting their purchases sent to them, rather then getting them right away, do we need that much space dedicated to merchandise? So, if we can do away with the inventory portion of most retail spaces today, what else would you do with the space? How could you make it a much more social environment, rather then being a retail environment? After all, this is exactly why places like Starbuck's or the Apple stores have boomed -- they created a social space, rather then a retail space.

Had a conversation recently with some friends a few weeks ago and we were talking about the economy and everything happening. A couple of us thought that if this was a really hot summer, people would be looking to places like malls to stay cool and keep their own a/c costs down. If I can walk around the local mall for a few hours on a weekend, I won't have to run my own a/c and that will save me money. We're already seeing people go to the movies more, it's a pretty good entertainment value these days.

Here's what Allison thought was the best entry:

Malls will not only generate sales, they will “grow food, create crafts, manufacture products, generate energy, and provide education.” As an antidote to time spent online, argue the CommArts folks, the mall becomes a social center, a “spectacle of hands-on demos, lectures, performances, classes, tastings, parties, and shows.” Further, the national sameness we now experience (Gap? Check. Victoria’s Secret? Check.) will morph into something more one-off, more local, more cause-oriented.

Utopic? Perhaps, but with dried-up financing, minimal consumer demand and the Chapter 11 filing last month by the second largest mall-operator in the country, it’s time to think differently. So bravo to ICSC for holding this competition in the first place. We’ve seen tremendous shopping innovation with online retailers specializing in uniqueness and craft like etsy, sustainable materials and business practices like Nau or customer service like Zappo’s; now it’s time for that innovation to hit the strip. And not just the Vegas one.

In fact, I’ve already seen something akin to Crossroads City implemented on a neighborhood scale. The Ainsworth Collective, a group of some 50 households in Portland, Oregon’s Cully neighborhood that came together out of a mutual interest in sustainability and community, have created a micro-economy within their few square blocks. They’ve published a directory of services provided by neighbors (from tax preparation to massage services to cat-sitting), encouraging local transactions. They’ve instituted tool-sharing, car-sharing, bulk food-purchasing and even own a farmer’s market that sells produce, baked goods and other items made by its members. There may always be mega-malls, but developers and architects would be remiss in not exploring grassroots solutions like this.

But, while people look at Starbuck's or the Apple stores and say "Yea, that's great for them, but it doesn't apply to me," they're missing a huge opportunity today. I think there's a coming trend to socialize the retail environment instead of just merchandising the real estate space. And the more we try to use the space for our purposes rather then our guests, the more they'll stay away...

CommArts Entry

Hobbs + Black Entry

Colman Architects

Rethinking the Mall - Allison Arieff Blog - NYTimes.com.

Toys 'R' Us Expanding Kids Convenience Concept - Retail News.

An interesting debate over at Retail Wire about this attempt by Toys R Us to increase the visitations by shoppers, who in this economy, may be cutting back on their toy purchases. Comments are mixed, with some people supporting the brand extensions and other people concerned that they are moving into low margin territories that are well covered by other retailers. I know that they tried a store concept in the past called Geoffrey's (see Geoffrey opens retailtainment door - Toys "R" Us | DSN Retailing Today | Find Articles at BNET for some info on that concept), but I don't think they ever went anywhere with them. Is grocery's the right area for them to be in or would they be better off creating an environment that was all about kids & fun? Would they be better off creating spaces that can be rented for birthday parties and things like that?

I have mixed feelings as I thought that the Geoffrey concept was really an interesting positioning for them. When they were opening them in 2003, Joel Anderson, vp of new ventures for Toys "R" Us said:

"It's really about capturing the childhood experience and the rituals of growing up," said Anderson. "And it's about making the stores a destination for parents and a fun place for kids 365 days a year."

For a store like Toys R Us, I like that kind of thinking. Creating a destination for fun. Yep, that's what I think Toys R Us should be. And maybe back in 2003, when the economy was doing well and people had money to spend, it would've been a more "upscale" kind of place. But I think today, it could play an even better role, by creating that one, elusive environment that parents & children both want -- a place that each other likes! As parents, we've all had to endure the Chuck E. Cheese visit and places like that. Places where the kids have a great time, but us parents really don't want to go in the first place & we certainly don't want to stay long once we're there.

Years ago, when we lived in the city and didn't have a child, we would walk past a place in the East Village that was a converted brownstone coffee shop/kids play room. The upstairs was Starbuck's like, with coffee, pastries, etc., and then downstairs they had the children's play space, that was always staffed. So, you would frequently see families on a Sunday morning with parents upstairs reading the Times and the kids playing downstairs. It was a good environment for both sides. So, my questions is:

Should Toys R Us Become a Third Place for Children & families?

So maybe TRU has an opportunity to figure out how to become that fun destination, especially in this tight economy. Maybe create more spaces for children to actually play together. Heck, the main reason we go to the Burger King in West Orange is because it has a playground, which becomes a third place for Sydney to meet and play with other kids. Should TRU become a third place for children & families? Should they maybe add restaurants and things like that instead of groceries? Any thoughts?

Toys "R" Us is looking to give shoppers a reason to visit its stores more frequently with the rollout of the "R" Market store-within-a-store concept that provides a wide range of kid-focused products including diapers, infant formula, baby food, lunchbox items, paper goods, health and beauty items, household cleaners and more.

Each "R" Market will feature roughly 1,300 items in a convenient shopping format located at the front of Toys "R" Us stores. The chain currently has "R" Markets in 260 stores with plans to roll the concept out to all of its 585 locations in the U.S. this year.

"As part of our business strategy, we are continually focused on improving the shopping experience for customers in our stores. This includes looking for new ways to provide busy parents with the convenience of finding everything they need for their kids under one roof," said Jerry Storch, chairman and CEO, Toys "R" Us, Inc., in a press release. "The introduction of 'R' Market offers customers a uniquely edited presentation of differentiated, kid-focused products from well-known manufacturers, as well as newer brands."

Toys 'R' Us Expanding Kids Convenience Concept - Retail News.. (Registration may be required.)

MassivelyNetworked: What happens as marketing gets truly interactive?

Some good coverage of several SXSW sessions about the future of marketing, and, yours truly gets some press! Liked what Pamela had to say was her key takeaway:

My takeaway is these trends are likely to dramatically alter where, how, what and to whom we market products and services in the near future - and, most importantly, why we do it.

We've been trying to get this message to our clients for a number of years. And when you start seeing things like the Sixth Sense work from MIT (see video below for some damn cool video of this project), you can't help but wonder how all of this technology will impact what we do in the advertising industry. And you add ubiquitous computing, and you're talking about some game changing experiences.

Read the whole piece to get Pamela's take on how all of these technologies will create great opportunities for us folks in the advertising industry in the future.

As Polinchock said of traditional retail, "Physical retail experience has to deliver more than price and product." If retailers don't evolve to compete with applications such as Amazon's iPhone app that allows you to enter a brick and mortar, take a picture, price compare and purchase online, they will become "stupidly expensive websites." To survive, physical stores will have to provide some valuable service or experience that can't easily be found online. In Polinchock's view, it's a matter not of creating just brand awareness, but "brand utility."

MassivelyNetworked: What happens as marketing gets truly interactive? .

Experience Manifesto: TED: MIT Students Turn Internet Into a Sixth Human Sense -- Video | Epicenter from Wired.com.

TED: MIT Students Turn Internet Into a Sixth Human Sense -- Video | Epicenter from Wired.com

Clilly Castiglia, our Chief Discovery Officer (and also a PhD candidate at ::: SMARTlab Digital Media Institute ::: in London) just sent me over this article that is just darn cool! And, it points out the largest challenge that traditional advertising industry will have in the future. In a world where the consumer can completely control all of the information they want to see, traditional advertising just doesn't work. In the demo below, I don't think people would wait to have an ad played before they got the information they were look for. However, when they needed information, then it's going to be a great place for a brand to speak to the consumer. It won't be about the big screen any more, it'll be about the personal screen.

Students at the MIT Media Lab have developed a wearable computing system that turns any surface into an interactive display screen. The wearer can summon virtual gadgets and internet data at will, then dispel them like smoke when they're done. Pattie Maes of the lab's Fluid Interfaces group said the research is aimed at creating a new digital "sixth sense" for humans.

In the tactile world, we use our five senses to take in information about our environment and respond to it, Maes explained. But a lot of the information that helps us understand and respond to the world doesn't come from these senses. Instead, it comes from computers and the internet. Maes' goal is to harness  computers to feed us information in an organic fashion, like our existing senses.

The prototype was built from an ordinary webcam and a battery-powered 3M projector, with an attached mirror -- all connected to an internet-enabled mobile phone. The setup, which costs less than $350, allows the user to project information from the phone onto any surface -- walls, the body of another person or even your hand.

Maes showed a video of her student Pranav Mistry who she describes as the brains behind the project. Mistry wore the device on a lanyard around his neck, and colored Magic Marker caps on four fingers (red, blue, green and yellow) helped the camera distinguish the four fingers and recognize his hand gestures with software that Mistry created. The gestures can be as simple as using his fingers and thumbs to create a picture frame that tells the camera to snap a photo, which is saved to his mobile phone. When he gets back to an office, he projects the images onto a wall and begins to size them.

When he encounters someone at a party, the system projects a cloud of words on the person's body to provide more information about him -- his blog URL, the name of his company, his likes and interests. "This is a more controversial [feature]," Maes said over the audience's laughter.

In another frame, Mistry picks up a boarding pass while he's sitting in a car. He projects the current status of his flight and gate number he's retrieved from the flight-status page of the airline onto the card.

"If you need to know what time it is, it's as simple as drawing a watch on your arm," Maes said, while Mistry used his right finger to draw a circle on his left wrist. The face of a watch popped up on his hand, which the audience liked.

When Mistry folds his hands in "namaste" fashion, the system opens a menu to allow him to choose an application. If he wants to read e-mail on his phone, he draws an @ symbol in the air with his finger. He can project a phone pad onto his palm and dial a number without removing the phone from his pocket. As he reads the newspaper on the subway he can project a video onto the page that provides more information about the topic he's reading.

Maes and Mistry told Wired they've been working on the project for four months, day and night, and have filed a patent for it.

Maes' MIT group, which includes seven graduate students, were thinking about how a person could be more integrated into the world around them and access information without having to do something like take out a phone. They initially produced a wristband that would read an RFID tag to know, for example, which book a user is holding in a store.

TED: MIT Students Turn Internet Into a Sixth Human Sense -- Video | Epicenter from Wired.com

Amazon Frustration-Free Packaging Letter

Saw this when I was traveling in Poland and forgot to post it, but I really think that they've hit 

Amazon Frustration-Free Packaging, a multi-year initiative designed to alleviate "wrap rage," features recyclable boxes that are easy to open and free of excess materials such as hard plastic clamshell cases, plastic bindings, and wire ties. The product itself is exactly the same—we’ve just streamlined the packaging.

Amazon Frustration-Free Packaging Letter.

Products with Frustration-Free Packaging.

SmartyPig: Simple. Smart. Savings.

Was reading Influx tonight and came across an article about the social network meets the bank :: Influxinsights. So I went on over to SmartyPig and thought it was kinda' interesting. I know a lot of companies have tried online wish lists before, but none of them have been all that successful if I remember correctly. So it'll be interesting to see how this model plays out.

One thing I'll say is this -- banks are one of those industries that seems damned determined to put themselves out of business by continuing down paths that they know rather then exploring ways they can do something new. That's why a bank like Chase will just increase ATM fees. In fact, on Thursday I walked 10 blocks to go to my Commerce bank rather then pay $3 to use the Chase ATM machine across the street. But rather then look at creating new services that are valuable to today's consumer, they'll just keep raising their fees and nickel & diming their customers to another bank. And companies like SmartyPig will experiment with new services and new ways to engage the audience.

And that's why companies like Kiva are changing the ways loans can be made and banks like Chase put their efforts into looking for new ways to charge their customers more. That's not innovation folks. Companies like SmartyPig and Kiva are.

SmartyPig is a simple, smart, fun way to save for a specific goal. Using groundbreaking technology and the latest in security standards, SmartyPig allows you to invite family and friends to contribute to your account, gives you additional incentive boosts from top retailers who sell exactly what you’re saving for AND *4.30% (APY) interest on the money you’re saving. Simple, Smart, Savings. SmartyPig!

Here's more from their site:

So we searched for something like a 529 Plan that would enable an individual or families to set specific savings goals and let them make distributions for particular items and events on a recurring basis. But what we envisioned did not exist. In fact, there was nothing even close. So we set out to create an innovative, on-line resource that would help us, and others, save for specific items and events. A safe and secure site where savings accounts are goal oriented.

But we didn’t stop there. We thought, what if we could give our customers the opportunity to make their accounts public (or not), so that their mom, dad, grandma, grandpa, friends and other family members could help them save up, creating an opportunity to reach their savings goals even faster? We also knew it was important to give customers a competitive interest rate just like the big online banks (which we do), but what about delivering our customers’ savings plus interest on a flexible MasterCard® debit card (which can be used for cash, or anywhere MasterCard® is accepted), or giving them the option of realizing even bigger savings by having their money put on a best-in-class retail gift card that includes extra incentives when they reached their goal?

And so the concept of SmartyPig.com and its one-of-a-kind, patent-pending technology was born... and Saving Will Never be the Same.® You dream. You save. We do the rest, and make it worth your while like you’ve never thought possible.

Link: SmartyPig: Simple. Smart. Savings..

Ian Yolles, Nau

Arrived at the Retail Advertising Conference and listening to Ian Yolles from Nau (I'll add links later) and he's talking about how they're combining online and offline retail. In fact, if you choose, you can shop at their stores and then have the items shipped to you at no costs and with a 10% savings. Great combination of the online/offline experience. You can shop in-store just like you shop online.

Additionally, 5% of all purchases go to interesting non-profit organizations. They invite every customer to participate in the giving process. Combination of local and national charities. So, as you go through check out, you can decide where your donation goes.

Now talking about how traditional, authentic storytelling just doesn't exist today. They've been co-opted. They launched the Nau brand through a blog called Thought Kitchen. Very central venue to their storytelling. They also have a section on their web site called the collective, where they share stories about positive change.

I had to scoot out, but I'll try to find out more and I plan on visiting their Chicago location while I'm here. You can visit their web site at www.nau.com

Link: Welcome To Nau - the collective.

Radiohead tells fans to pay what they want for album - Yahoo! News

Radiohead, one of the world's most influential rock bands, plans to sell its new album from its Web site as a digital download and let fans choose what they want to pay.

With music sales in decline globally for seven successive years, the industry is engaged in a debate over how best to reverse the trend.

Radiohead said its seventh studio album "In Rainbows" would be available from Radiohead.com from October 10 in MP3 format, meaning it can be played on all digital devices. In the latest twist in the move to digital music, fans can choose how much to pay, or can pay nothing if they prefer.

Link: Radiohead tells fans to pay what they want for album - Yahoo! News.

Business: Malls going to online service

New technology that is an interesting twist on our thoughts about e-tailing your retail. NearbyNow enables consumers to search all products, brands, and sales available at local shopping centers using the Internet or mobile phones. As they say on their web site: We turn online shoppers into in-store buyers. Kind of a reverse SCANBUY Shopper. No doubt that we'll see more of this kind of technology in the future.

Most shoppers today read up on products and check prices on the Internet before buying. Now mall stores have a new tool to get in shoppers' faces online before they make up their mind.Westfield Group is launching a service that enables buyers to do product searches and compare prices in their local mall stores before leaving home. Shoppers can get coupons, spot sales and find out if their nearest mall store has their size of a specific item that can be reserved for pickup. Or bargain hunters can ask to have sale price alerts for stuff they want text-messaged to wireless gadgets during a shopping trip."We're bringing together the store experience and the online world, " said Scott Dunlap, chief executive of NearbyNow Inc.

Link: Business: Malls going to online service.

Link: NearbyNow: Turn Online Browsing into In-Store Buying.

Marketing at Retail

Marketing at Retail is now posting our articles online, so click on the links below to read them. And while you're there, make sure you look around. There's lots of great content there!

The New Face of Retail

In many retailers today you'll have a hard time finding staff that can tell you where things are. But recently I've been visiting stores in our SoHo neighborhood where the employees can not only tell you where things are, but they can also tell you where they came from, how they were made, and anything else you could think to ask. Is this the new face of retail?

For years retail pundits have discussed the impact of online shopping on the physical retail space. And while many have debated the "will we shop online or in-store" issue, what they've often missed is how the online shopping experience impacts the offline shopping experience, not how it eliminates it. One thing that it really changes is the information available to us as consumers.

The result: there's nothing worse then going into a store and knowing more about the products than the people working there. The online shopping experience impacts the retail experience by tipping the balance of what we know as shoppers vs. the sophistication of the retail sales staff.

Link: The New Face of Retail.

The Brand as Experience

When you look at the profound changes occurring in both the retail and media spaces it's only logical to explore how they are going to impact each other. The first place to look is the technology that it is driving much of the change on both fronts. And the key to success in harnessing technology for marketing or sales is to realize that technology has to be focused on creating a better experience for the consumer, not for the retailer.

Audiences have come to expect dynamic environments in everything that they do. They watch content when they want to. They receive information when they want it. The have bought into just-in-time marketing. When they are bored with our content, they make their own. So as you look at the technologies on the retail horizon, think about how you could use them to create something more unique for the consumer. Dan Pink, writing for Yahoo Finance, recently had this to say:

"Today, utility is abundant. We have more products and services than we can handle, and most function just fine. To stand out in a crowded marketplace, sellers must make a dramatic leap in utility-or stand out in some other way. They can try to compete on price, but that usually ends in a downward death spiral. So the alternative is to compete not on left-brain attributes like price and functionality, but on right-brain qualities such as emotion, meaning, and look and feel. Case in point: Target sells toilet brushes and vegetable scrubbers designed by superstar architect Michael Graves. Even the most mundane, utilitarian objects in our lives have been turned into objects of desire."

Link: The Brand as Experience.