The Brand Boutique Completes the (Entertainment) Experience
By Mahin Samadani
I must have walked by hundreds of mall kiosks this past holiday season. You know, those carts set up in the aisle-ways, designed to maximize rental revenues. Although I generally walk right by, this year my wife stopped in her tracks and exclaimed, "Look at the cute TVs!"
TVs? I thought to myself. On a kiosk? Sure enough, right in front of us was a colorful kiosk full of flat-panel LCD TVs from Hannspree. Hannspree is a new division of an established Taiwanese company seeking to extend its product and brand presence with a lineup of highly stylized TVs. What s really neat about these products isn't necessarily the design, however, but rather the fact that Hannspree has decided to eschew traditional retail channels.
As we have increasingly become an experience-driven culture, smart brands are responding to this shift with branded retail locations, pop-up (i.e. temporary) stores, and kiosks. These outlets can be thought of as "brand boutiques," places that sell a brand by creating an experience designed to engage, inform, and entertain the consumer. Far more than a traditional end-cap or store-within-a-store, the brand boutique allows for unprecedented control of the brand at the most critical customer touch point: the point of sale.
Many of today s consumer electronics and other products roll off the same assembly lines used by their competitors. Huge companies like Flextronics crank out gadgets and gizmos for nearly every top consumer electronics brand. In Taipei, a single factory might make Dells in the morning, and then Macintoshes during the night shift. Similarly, when you boil it down, there is very little service-level differentiation between providers of services like cable and wireless. Companies like Apple know very well that the experience, the suite of products and services offered and how they work with each other, is just as if not more important than technical innovation in order to differentiate from the mass of similar products and services in the market.
The realization that consumers primarily seek experiences, as opposed to specifications of features and benefits, is now extending beyond the creation of products and into the sales channel, impacting how products and services are sold. Packaging, websites, and support are becoming more important; and so is the retail presence.
It wasn t so long ago that boutiques were strictly the realm of luxury retailers like Chanel, Gucci, and Coach. The retail trend for most other products was in the direction of big-box retailers ranging from Wal-Mart to Best Buy. Eventually, brand-centric organizations craving differentiation, like Gap and Nike, started to establish branded stores.
As companies have become more concerned about brand, they see a need to control how their products are sold and how the brand is perceived. Third shelf down in aisle four at Circuit City is no longer sufficient. Through direct one-on-one contact with buyers, manufacturers can also learn about consumer preferences very quickly, and finely tune their products and experience in response.
There has been a recent surge in brand boutiques, both temporary and permanent, for an incredible array of products and services, including Song Airlines, MTV, Sharp, Suave, Purina, and Palm. While Apple was not the first technology-centric brand to open brand boutiques (Sony and Gateway were faster out of the gate), it was arguably the first successful one due to the complete experience its stores offer. More than a sales channel, brand boutiques provide a brand identity for consumers to associate with.
So, do they work? Yes, but only if handled the right way. My friend Nish Nadaraja, a San Francisco-based marketing executive, helped Method Home with their brand boutique strategy in 2004. Method Home sells a line of home cleaning products mainly through Target Stores. While sales were good, Method felt it didn t have enough exposure. Being a new brand and a startup on a tight budget presented quite a challenge. In an effort to gain maximum exposure while still controlling the brand experience, Nish suggested that Method dip into the marketing budget and open a Union Square pop-up store; that is, a branded, interactive retail store that pops-up for a limited time and then goes away. The results were better than anyone could have imagined. Aside from creating buzz and sales, Method was also able to gain valuable customer feedback and even rotate employees through the store to get them more in touch with their customer base. For the budget of a decent print-marketing campaign, Method generated buzz, gained new customers, and even earned a profit. Nish says one of the secrets to a successful brand boutique is having the right evangelists out there supporting it, and planning exclusive fun events like wine tastings targeting specific demographics and engaging seminars in the space.
These efforts can clearly result in a better consumer experience. Boutiques are obviously more pleasant, approachable, and visually diverse than big box retailers. This adds to the fabric of neighborhoods that have been increasingly trying to keep big-boxes out. Aside from being nice places to shop, brand boutiques generally have salespeople that are incredibly knowledgeable about the products they are selling, and how they compare to those offered by competitors. As consumer electronics and services grow increasingly complex, boutiques may very well be the only way these products can be sold. Obvious drawbacks are that it s not as easy to compare competitive products when they aren t located in the same store, and of course it s not in the brand boutiques salespersons interest to have you buy anything elsewhere even if it is a better match for you.
Companies that establish successful brand boutiques will be able to use them to introduce new and complementary products and services. Just watch over the coming year as Apple takes advantage of its brand boutiques by launching a cellular phone and service.
Brand boutiques are catering to the notion that people want to be entertained, engaged, and informed. As consumers, we can just sit back and enjoy the show!
Mahin Samadani is a Business Development Director for frog design.
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