Have you ever wondered why young Chinese men and women will spend several months salary on a scarf or handbag from Gucci when they could buy an exact replica for a few dollars, just down the street (the replicas are uncanny and I defy anybody to tell the difference)?
 

Have you ever wondered why otherwise perfectly sane people willingly line up for a Tim Horton’s cup of coffee, when there are three other alternatives within ten feet?

And have you ever wondered why some stores have to discount their merchandise just to get customers to cross the lease line?
 

The answer in is that some brands are experiential brands and others remain retail brands.
 

Many retail brands deliver experiences, or focus time and attention on delivering “consistent, excellent customer experiences.” However, they still see themselves primarily in the business of selling merchandise or serving meals or coffee – the experience is an added value or attractive come-on, designed to increase sales of merchandise, meals or coffee.
 

Managers of Experiential brands, on the other hand, see themselves as selling experiences, where the merchandise is seen as a way of delivering the experience – in a way, the merchandise is an added value or come-on to increase sales of experiences. Which makes imminent sense for two reasons: authentic experiences are unique, and the margin on experiences is much higher than the margins on merchandise.
 

Specifically, experiential brands are focused on the way the brand makes the customer feel, not just in the store, but also throughout the process of thinking about, buying, using and remembering the product. This is a deeper, more relevant experience than is generally discussed when talking about “in-store experience delivery”
 

In an era where there is pretty much nothing that cannot be replicated and sold for less, or improved on and sold for the same, success depends on being unique and different in ways that transcend the product or service you are selling. As a retailer, competitors can replicate pretty much everything you do – the way the store looks, the merchandise you sell, the words your sales associates use, even the way they look. The only thing that cannot be replicated is the way your customers feel when they leave your store or relive the experience when they us the merchandise they bought from you. This is what we call the differentiated brand experience and it is the essence of great retail and transactional brands.
 

Getting back to the young people in China. Clearly, the payoff for them is not in the pure prestige of the brand – if that were the case they would buy the replica. Similarly, the $200 scarf does not perform or function any better than an $8 copy. What is in play here is the intrinsic experience of the purchase continuum: what it means to buy a scarf for a girlfriend at Gucci. There is a feeling of hope, a feeling of wellbeing, experienced in anticipation of the purchase; there is the physical and emotional thrill of the actual visit to the store. There is the feeling of satisfaction and pride when the girlfriend opens the bag and sees the scarf. And finally, there is the feeling that recurs for years every time the scarf is worn.
 

How does this relate to a cup of Tim Horton’s coffee? Again, it cannot be because of the convenience, and there is absolutely no prestige; and, to be honest, the coffee doesn’t really taste any different from any other double double. People would rather line up at Tim Horton’s because of the way the entire experience makes them feel about themselves and their lives – the many things that that have nothing to do with the coffee, but have everything to do with the overall experience of wellbeing, community and fitting in.

Stores that find themselves chasing their prices downward and discounting their merchandise are those that focus on selling the merchandise, not the experience. While it is true that many of these banners focus on “delivering a great customer experience every time,” these experiences are theatrical, temporary, and designed to provoke a specific response such as “stay in the store longer and browse more,” or “be surprised and seduced to buy on impulse.” This form of experience delivery falls into the sphere of “Experiential Marketing,” which is a tactical approach to building sales and loyalty, by delivering experiences.
 

Experiential branding is the strategic positioning of the brand in such a way that it transcends the store or the product or the service. Experiential branding suggests that the brand is defined by how the experience makes the customer feel, not by what the product or service does for them. It is inherently more customer focused and is, to a much greater degree, about the consumer and not about the company.
 

Stores that focus on delivering a great customer experience every time are not wrong – experiential marketing is the fastest growing sales and communication field. The problem, very often, is that these experiences generally do not aggregate into a single meaningful, differentiated experience that is inseparable from the brand essence. If the experiences delivered in the store or around the product are each strategically designed to support the brand’s fundamental position, then the customer will feel the meaning of the brand. Providing the experience is relevant, he or she will be prepared to pay more for it and develop long term loyalty – not to the store, but to the brand and the experience.

Two great experiential store brands come to mind: Old Navy and Abercrombie & Fitch. Neither of these is particularly original in what they do or what they sell. They are also not particularly original in their sales and communication strategies: Old Navy sells an edited collection of great value clothing that fit a specific life style; Abercrombie and Fitch do the same thing, except the way they define their target lifestyle means that the value be found in the style of the clothes, rather than the price.
 

The question becomes, why is it that no matter how hard other stores and store brands try to replicate the experiences delivered at Old Navy or Abercrombie & Fitch, they just don’t achieve iconic status and they remain vulnerable to competitive discounting?
 

The reason is that both Old Navy and Abercrombie & Fitch understand the experiential need of their customers at a deeper level, and are in business to deliver this deeper experience, as opposed to sell clothes. This approach has resulted in both these stores being equally appealing to boys and girls because, while boys and girls need and want different clothing, these stores have understood that boys and girls are looking for the same experience in the realm of dreaming about, buying and using clothes. What these kids are looking for is so far removed from the physicality of the clothes, or even the look of the clothes, that there is no reason to market boys clothing to boys and girls clothing to girls. They market the experience and, as we have seen, the experience is the same for boys and girls.
 

In effect, Abercrombie and Fitch understand that the way being an Abercrombie and Fitch customer feels to boys is the same as it is for girls. The tactical support – the merchandise, the store design, the in-store experience, the pricing and so on – may, by necessity, be slightly different. But the end-game experience, the essence of the brand, is the same.
 

The Chinese kids buy scarves to complete an experience they crave, and Hermes and Gucci neatly wrap the experience in a scarf and sell it in a box. Men and women, old and young line up not to buy a cup of Tim Horton’s coffee, but to buy an experience – and it’s great that Tim Horton’s includes a cup of coffee at no extra charge.
 

The difference between visionary retail brands and brands that have to fight for every dollar of margin lies in the fundamental understanding of the business they are in – great retailers don’t deliver experiences in order to sell stuff. They sell stuff to amplify experiences.
 

Laurence Bernstein has been fine tuning the art of converting features, attributes and benefits into dynamic, experiential brands for 20 years. He is an acknowledged thought leader on understanding customers and presents an e-seminar on this subject on Businessexpertwebinars.com. He is the founder and managing partner of BC3 Strategies in Toronto. He can be reached by email at bernstein@bc3strategies.com. www.bc3strategies.com