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.

Economy isn't slowing Apple's building plans - USATODAY.com

Even thought their sales were down 3%, Apple is still investing in it's retail strategy. Why, because they know it's the way to really connect with their customers. Got to any more where there's an Apple store and more often then not, that Apple store will be the most crowded store in the mall. Not only are the usually pretty full of customers, but they also have more staff per square foot then any other retailer out there. Well, it looks that way.

We think they've created a social shopping experience and said this back in 2006:

Here's what we think the Apple store is all about: They took the barriers to entry to buying an Apple product and answered those barriers with the store. Again, this is only our take, nothing official from Apple here! And how does that work?

• First barrier to entry has been price in the past, although that has certainly changed. But with a higher priced product, what did Apple do? Create a store environment that's as beautiful to look at as their product. Give people the comfort that they're buying something of value.
• Number two barrier to entry? People don't want to learn a new operating system. Now, us Apple folks say Hey, Microsoft stole the operating system from Mac years ago, but the store takes away that concern. Afraid of learning a new system? No problem, we'll teach you. Come to our classroom (the theatre) or visit the Genius Bar and we'll help you. Learning something new is a big hassle for most people and this is a way cool way to make it less of a hassle. Sure, there are things that I can't figure out how to do, so I just make an appointment and get their help. I don't have the time to figure it out myself, so why not let them teach me or just take care of it quickly.
• Make it a social experience. Although I haven't been to the new store here in NYC at 3 AM, I can bet that a good number of other people have. No matter when you go to the Apple store here in Soho, it's always crowded and it's got an almost club-like vibe.

They're also investing in the downturn. So, while many (if not lost) retail companies are scaling back, closing stores and letting people go, Apple is growing theirs. They understand that in a down economy, it's even more important to find ways to create the right experience to connect with your audience. And, the Apple stores have been a great connection point. I still don't understand why more retailers are not looking for ways to create their own genius bars! Are you listening Whole Foods? Because, I still Need a Whole Foods Genius Bar!

Apple (AAPL) isn't letting the recession slow its retail ambitions.

The company said Wednesday that it plans to remodel 100 of its stores this year, to make more room for customer training and displayed products. Additionally, it will open 25 new stores, including a fourth location in New York City, and new ones in Paris, Italy and Germany.

"We know that a lot of people are cutting back, but we're doing the opposite," says Ron Johnson, Apple's senior vice president of retail. "We're investing in the downturn." (Emphasis mine)

The company, which saw a 3% decline in sales of Apple computers in the most recent quarter, plans face-lifts for older stores to emphasize customer-service programs.

Some 170 million folks visit Apple Stores yearly. (Emphasis mine)

Economy isn't slowing Apple's building plans - USATODAY.com.

Experience Manifesto: The Role of Design in an Economic Downturn | The Customer Experience Labs.

Experience Manifesto: Retail Design Diva -- Has Shopping Lost Its Charm?.

Experience Manifesto: Is AudienceGames a Social Media?.

Photo by Ed Uthman, MD

A Look into the Future from Microsoft

Thanks to Greg Verdino for the tip-off to this video from Microsoft. Some cool ideas here as to how we might interact in the future. I've had the chance to visit their house of the future, where they also show some very cool ways to engage information. I think that one of the key take-away's is that content/info needs to follow us where ever we go and that's the next big jump in this new, high-tech world. Of course, that also brings up a ton more questions, like: 

1. Who has the responsibility for all of this information?
2. Who updates it & decides what gets updated?  
3. Does the role of the curator (or editor) increase in this new world?
4. Will consumer accept brands as curators and, if so, what do brands need to be doing today  to prepare for the curator role?

We're only seeing the tip of the iceberg here, but I think as more & more people start to look at this brave new world from the consumers POV instead of constant looking at this new world from the brand POV, we'll start seeing some very exciting innovations that the consumer will embrace.

Full Schedule of SXSW Interactive Sessions | SXSW.com

Stopped in the hallway to speak with Mads Thimmer from the Innovation Lab in Denmark, so got to this panel a little late. I'll post the stream to this discussion when I find it later. Interestingly, the biggest concerns that people have about all of this are privacy and, not surprisingly, it's a big concern in this session too.

BC -- pervasive computation + mutable infrastructures manes cities becoming operating systems for living. Because of MMG, we're now getting more massively multiparticipant models that we can use in the real world.

AFK:Wovenspace. Creating tools initially in use at a theme park in Dubai. It's a real time model for urban scale space. Amusement parks are a lab for spatial mediation. Also, amusement parks are opt-in, so it makes it easier to test some of the issues that will arrive in the future. There are applications that follow the guest throughout the park. Guests can pick an animal as their "mirror reflection" that follows them as they move through the park. Also creating dynamic context for collaboration & play. MWS -- different definitions of being tangible? What are the elements of tangible in public spaces? It's not fully reactive one way. It wasn't about just delivering information, like advertising. This is a really key point as most people in our industry think this is all it's about. Being tangible is more then just sight & sound. Being tangible is not just about touching it with your hand. Instead of just delivering information in one direction, it allows users to also interact with each other.

Tangible Interactions in Urban Spaces

The transition from physical to virtual spaces means that there is less opportunity to physically interact in public spaces. Historically public spaces were used for celebration, today they are used for anonymous mobile calls. We would like to explore the ways in which the tangible aspect of physical space might be re-introduced into our virtual interactions through an exploration and discussion of - among other things - responsive architecture.

1st question from audiences is about how augmented reality will impact the tangibility of these urban spaces. AR impowers the users, not the designer.

Mouna Andraos  Electronic Crafts

Francesca Birks   Foresight Sr Analyst, Arup

Molly Wright Steenson   Girlwonder,   Princeton University School of Architecture

Ben [neb] Cerveny   Strategist & Advisor,   AFK Stamen Gamelayers etc

Full Schedule of SXSW Interactive Sessions | SXSW.com.

active social plastic.

Retail Design Diva -- Has Shopping Lost Its Charm?

This was at the heart of our discussion about the socialization of place and now there seems to be some numbers to support the theory. His what we think. As more & more people do their actual purchases online, what's to become of the physical real estate of retail? We first wrote about this back in 2005 and then again in early '06 at Retail Design Diva -- Socialization of Real Estate and we think it's going to be even more important in the future. Here's what we said back then:

It made us ask the question, 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.

And these numbers seem to support the thought that people just aren't going to the stores like they used to. Now, the economy is also having real challenges today and people are not shopping as much as they were, say a year ago, but this was about traffic, not shopping and I think we'd be seeing some declines no matter what the economy was doing. Yes, there was also a decline in online shopping of 1%, but you can't compare shopping data with traffic date. With gas being up (although now we can get it for about $3.55 by our house, so it's dropped about $0.80 recently) and retail experiences tending to be so bad, it's creating a huge reason not to go to stores.

When you combine that with the consolidation that's hitting the retail industry and you're coming to a perfect storm of reasons not to go to the local mall.

So, if you're a retailer and you're not looking to significantly increase your retail experience, then understand that you're going to be losing more & more money on your real estate holdings. It's just not worth the hassle for people any more. Back in its time, if I went to a place like Spag's, I was cool with it being such a difficult retail experience for the bargains I got. Or look at the annual wrestling match more commonly known as the Filene’s Basement World Famous Bridal Event. But, if we're going to Macy's or Old Navy or Target or any one of a thousand of look-alike retail experiences, with many of the same items at very similar prices, you'd better start thinking about what that real estate is worth to you and how much you're going to need to spend to create a compelling, relevant and authentic retail experience.

We also wrote in early 2006:

Raise your hand if you’ve ever gone to a store, taken up a great deal of the sales persons time, only to go home and buy online because you could find it cheaper? Come on, you know you have. Everyone does it. And this helps to turn the retail space into a showroom, rather then a place to actually purchase. Worse, technologies like SCANBUY Shopper let you check the price on something by using your camera phone to take a picture of the bar code and then finding the best price. And that’s before we start talking about AI shopping bots!

So, you make the retail experience worse and worse and we use it less & less causing you to make it worse & worse, causing us to use it less & less....see where I'm going with this?

The truth is too many retail experiences are either neutral or they plain suck, so we find other ways to buy. Sam Ewen from Interference recently commented on a post about brand ambassadors and said "Would you spend $250,000 on a tv spot placement and then hire a high school film student to direct?" Yet we have no problem spending billions on the actual real estate while paying your employees as little as you can get away with. In a recent blog post entitled Shouldn't Every Employee be a Brand Ambassador?, I posed this quesiton -- "Do you hire to save money or to find the best people possible to represent your brand? The consumer will know the difference."

So, if your physical retail real estate has real value to you, then you need to treat it likes it that important. You need to:

Staff it like us being there is really important to you. Ever go to a house where you're not quite welcome? Well that's sometimes how we feel at your stores. And it doesn't make us want to come back!

Although it's not a retail experience directly, take a look at Coca-Cola 'rewards' may have cost longtime employees their jobs - Vallejo Times Herald. So frequently the employees are treated like they're not welcome either and that feeling ends up deposited at the consumers feet. They work for you damn it, treat them like a guest! They're your front line in the war to be successful, why do you spend so much time hobbling them? If you treat them well, I can guarantee you they'll treat me well. If they feel unwelcome, so will I.

Look for better ways to combine your offline & online retail. You need to E-tail Your Retail. If i can do it online, I should be able to do it in-store.

Ask yourself what your space would be if it wasn't about inventory management. What would make me, the consumer, come in?

Are you experimenting with social media, whatever that is? Well, bully for you! No really, that's good. But are you doing anything social in your space? After all, every day, thousands of people walk through your doors and you've probably never thought of the social media power of your own space. Walk over to the Apple store and see the results of retail as social media.

There's a lot more to think about, but this is probably enough for one post. I'd love your feedback. What stores are doing a great job retaining guests despite this drop in traffic? I'll be they'll be the ones still standing when the economy gets back on its feet!

According to research by TNS Retail Forward, most shopping venues are losing audience at a steady pace, year-by-year [has shopping lost its charm?]. The TNS Retail Forward ShopperScape survey found that shares of monthly shoppers are declining the most at shopping centers, including both traditional malls and lifestyle centers. Regional mall traffic of monthly shoppers declined from 34 percent in 2006 to 30 percent in 2008; while lifestyle centers showed a decline in monthly shoppers from 24 percent in 2006 to 20 percent in 2008. According to the report, both formats need to do more to attract shoppers.

Power centers held firm at 59 percent of monthly shoppers in 2006, and 60 percent [slight increase] in 2008 [no surprise, with price driving more purchases in this economy]. And factory outlets increased from 10 percent to 13 percent, while strip centers with grocery anchors decreased from 55 percent to 49 percent. Online sales lost 1 percentage point, falling from 43 percent to 42 percent, over the period. That’s not much of a difference, but it seems at odds with analysts who speculate that the downturn is driving [no pun intended] more shoppers online, seeking to save money on gasoline.

Link: Retail Design Diva.

Link: Retail Design Diva -- Socialization of Real Estate

Link: Experience Manifesto: Socialization of Place.

Link: Experience Manifesto: Brand Autopsy: Designing Retail Experiences – The Apple Way.

Link: Experience Manifesto: Luring MP3ers Back to the Mall - January 01, 2006.

Link: Experience Manifesto: The Socialization of Real Estate.

Is AudienceGames a Social Media?

We were having a conversation at the office today about whether or not we could call AudienceGames (you can click here if you're not sure what I'm talking about) a social media. I know it probably doesn't fit the current definition of social media, but I had some good reasons for thinking it should be included in the social media discussion.

For one thing, it is a media, right? It usually falls under the advergaming category, sometimes the OOH grouping, but it's always media. Right there up on the big screen.

And it's certainly social. Hell, the game doesn't really play if there's only one person in the theater. Well, technically it does, but it sure isn't fun. If you've played AudienceGames or seen some of the video, you know what I mean. A group of people, in a social setting (the movie theater) playing a game. And let me tell you, when the audience is really into playing the game, you can feel the social energy in the room. In fact, I played AudienceGames at a conference in Amsterdam and someone come up to me that night at dinner to tell me how much the room changed, with a new energy and socialness in the room after we played the game.

Look at how AgencySpy talked about it:

It incorporates so many of the trends we babble on about here at AS. Let's see, there's gaming. Check. There's community. Check. There's new technology. Check.

So, if I'm right, when we complete the initial AudienceGames installation of 750 screens later this summer, we will have one damn big, social media network. And here's the cool thing. That network will be in front of the 33 million people who buy tickets in those theaters.

And this is where it got interesting to me. Most social networks tell you how many people sign up, but not how many people drop out or just stop using it. There's no figure for "churn." I haven't really been to my Facebook or myspace page since I set it up, but I'm still a registered user. But I'm far from an engaged user. So, do I really have value to advertisers? I'd say no.

But, when people come into the movie theater and experience AudienceGames, they're an engaged audience. Actively engaged. In fact, during the two month msnbc.com test, over 90% of the people we surveyed played the game and we had a 71% unaided recall rate. That's engagement, not just membership. And as we expand, our active, engaged user base goes up a lot! I mean, if we end up on just 5,000 (out of NCM's 17,000+ total) screens, that would give us an estimated audience of over 200 million. Active users.

Now, I'm not suggesting that AudienceGames can have as deep of an experience as a Facebook, myspace or whatever's next might deliver, but it'll sure deliver happy, social, engaged people.

So, could this be the start of an entirely new, social media experience? And what else could happen in this social media space that would deliver for the audience? Lastly, how could we connect the location based social media experience with the online social media experience? That's where I'm really excited to play!

So, I'm sending this to my social network and asking for your input. Is this a new form of social media? What else can we bring to the experience? How do we bring the online & offline elements together into a seamless social experience?

Looking forward to your thoughts!

The Socialization of Space -- Beyond Madison Avenue

We spoke about this topic last week during Retail Advertising Conference in Chicago and believe that it will be even more important in 2008. The more technologies allow us to connect remotely, the more we want to meet in person. In addition to the retail issues that we look at with our retail clients, we believe that we'll start to see some early tests of our social networking tools (i.e. -- Myspace, Facebook) leaving the internet and entering the real world. And we’re going to want our facebook, myspace, etc., pages leave the internet and be a part of our real world. I go to a conference and maybe my phone alerts me that I have myspace friends there.

So as we look at all of these cool social marketing tools out there, remember to think about The Third Place and how you can use the physical spaces you have to help connect people face to face. In our rush to create social networks in cyberspace, we often forget that we already have a start (at least) of our social network in our physical spaces that just need some cultivation.

And don't forget to help create a third place for your employees as well. I think this is one of the biggest mistakes companies make is not figuring out how to engage their employees first. Take a look at my memories of working the WDW Electric Light Parade and see if you are creating that kind of connection with your employees before you run around trying to create social networks for your guests!

Over the course of doing some research for an upcoming project, I’ve come across some interesting reading that’s been changing how I look at things. With the direction internet and the home are moving, the social space is all but gone. We have very few public markets left where people congregate, very few gathering places and points for socialization. While we rapidly adapt to changing environments and personal space, there is still that desire for socialization that runs through us, and when we get a chance partake in sanctioned socialization, we jump at it.

The modern Starbucks (or any local coffee shop, at that) and the Apple store are perfect examples – public spaces that are not so much a retail environment as a social environment. The way in which we embrace public spaces is fascinating. Brand Experience Lab has an interesting read on The Socialization of Real Estate here.

Link: The Socialization of Space -- Beyond Madison Avenue.

AudienceGames at Heineken

Had a great time visiting Heineken last week and what of the things I did was to let them play AudienceGames. As you can see by the picture, people were having lots of fun! Always makes me feel good to know that our presentations really let people have so much fun!

Advertainment greets moviegoers - USATODAY.com

Moviegoers at 12 U.K. cinemas on Saturday became human joysticks.

They were shown an ad for the Volvo XC70 before the movie Ratatouille, and were asked to put their hands in the air and wave them left or right — as a group. A single camera at the front of the theater translated the audience's collective leanings, and the onscreen animated car drove in that direction.

That participatory commercial represents a growing trend in movie theater advertising, with on-screen ads and lobby displays becoming more interactive, more entertainment-oriented and frequently offbeat — such as a tongue-in-cheek promotion where an oral-care company stuck dental picks to the popcorn bags.
The idea is that more fun makes advertising go down better with a theater's captive audience.

"If you are going to use cinema advertising, the bar is higher in terms of the engagement and the entertainment that you have to bring to the table," says Jay Waters, chief strategy officer at marketing agency Luckie and Co. "Consumers think, 'I get free programming at home in exchange for watching advertising, but I paid to come in here, so why should I have to watch an ad?' "

The innovations come as marketers continue to ramp up spending on movie theater promotions.
On Monday, the Cinema Advertising Council will report that spending in 2006 hit $456 million — a 15% rise over the prior year. That total includes revenue from on-screen commercials — ads that run before the movie previews — as well as off-screen promotions, such as lobby displays, sample handouts and ads on popcorn bags. CAC members represent about 81% of the movie screens in the USA.

As cinema ads become a regular part of the movie-going experience, marketers continue to try new techniques to test their potential for amusing, rather than alienating, the paying customers.

"If you let people have fun, they don't feel like they've been intruded upon," says David Polinchock, chief experience officer at Brand Experience Lab, which was responsible for the interactive technology behind the Volvo ad. "They don't walk away upset."

Link: Advertainment greets moviegoers - USATODAY.com.

AudienceGames for Volvo - New Video

The folks at Carlton Screen Advertising have put together some video from our media presentation on Monday. It was a small audience, but, as you can see by some of the press coverage we received, they enjoyed the experience a greta deal! You can also click on Carlton Screen Advertising: Volvo in British cinema first to see a complete list of the theaters where the game will play. We'll post additional video of the actual audiences sometime over the weekend.