Customer centricity used to be a triad of price, service, and convenience, according to David Minster, chief operating officer of American designer jewelry company David Yurman. Now, a new model has emerged that emphasizes the experience, status, and value. And you’d better be darned good at all three.
Minster talked of a “huge erosion of trust” during Aberdeen Group’s Retail and Consumer Markets Summit in New York City last week, as he reminded a theatre full of retail execs that the notion is now “reflected in (consumer) purchasing decisions.
“If I can walk into your store with a smart phone and price you out, you’ll fail,” he added. There must be an experience. It’s “how will I feel about myself after I spend the money on it? Entertainment is critical.”
Listening is even more critical.
“Social is very personal – we cannot lose sight of that,” Minster reiterated. “Try going to your 1,900 friends and asking for $20. You’re in trouble. These people are not your friends. You must be a brand that people can relate to” in order to gain trust, respect, and ultimately – support or sales – whatever your mission.
Beyond the earpiece that social allots, it’s also a benefactor to product development. You have to “integrate empathy into the experience side,” Minster went on.
Take American fashion designer Tory Burch, who used a social network to identify with her consumer. At close to 150,000 followers on Twitter, it’s safe to say she has a sizeable audience keeping tabs on her brand. During her travels, Burch tweeted about how going barefoot through airport security grossed her out and asked her followers whether or not she should start a line of airport-attuned travel socks. And, of course, the answer was a resounding, “Yes!!” So was born a “stylish antidote for when you have to brave those endless security lines.” Burch asked, listened, and took action – the hallmark of integrating empathy into customer experience.
But it’s also important to “drive a sense of value to the consumer,” Minster added. Beyond David Yurman’s signature cable, the brand has got a whole host of original designs fueled by its desire to be a cut above the rest in quality and uniqueness.
But the company widened its available price points in order to create a perception of value; iconic pieces are priced from a couple hundred on up to the $60,000 price range to avail an aesthetically same piece to high-end and value shoppers.
There’s always the built-in risk that you’ll never sell the high-end piece if it’s offered for less, but Minster said “the discriminating buyer will buy it anyway.” What was more important than playing it safe and cutting costs was taking a risk and going for variables in pricing. And David Yurman has seen its online revenue grow ten times in the last five years.
“The customer needs to feel some ownership of what’s going on with your brand,” he concluded. “Merchandising must play an active role in customer engagement.”