When we audit luxury brand spaces, their managers often brag about expensive architecture, fine leather fixtures, complimentary drinks from high-end espresso machines, and private rooms. They swoon over these “ultimate” features — even after we have reviewed their statistics and shown them that their flagship stores produce numbers deep in the red. I have repeatedly seen some of the most iconic luxury brands struggle to fill their stores, and now, COVID-19 has dramatically accelerated this trend.
Maybe because the idea of personal interaction as the ultimate luxury experience is so ubiquitous, most brands fail to deliver on this count. They open a store location, invest a lot of money in its decoration, and declare what they’ve built to be a luxury experience. But later, when this strategy inevitably fails, managers have no idea what went wrong.
Above all, luxury is about extreme value creation, and service delivery is a big part of that. If brand service is not creating significant customer value, then that customer interaction will decrease a brand’s equity. Design and a luxurious ambiance don’t make the luxury experience; they are simply expected in a luxury setting. They cannot substitute for crucial aspects like brand storytelling. Those are much deeper issues.
In many of our service audits, the store staff does not convey the brand story at all. They often assume a customer entering their store is familiar with the brand. When this happens, they miss an opportunity to give customers a reason to buy. Our research has shown that a significant portion of overall value perception is created by branding. So when a store visit does not bring the brand story across, no value is created. Consequently, there will be no sale, and consumers will perceive their visit as a waste of time — and they probably won’t return.
Every aspect of every detail must emit brand storytelling. Nothing can be random. When we design service experiences, we sometimes spend weeks strategizing about one-hour customer interactions and meticulously define how the brand story should be perceived. That needs to include the feelings a brand wants to evoke. If the branded experience isn’t clearly defined and delivered by store staff, then there won’t be an experience. If there’s no experience, there won’t be a memory, and, without a significant memory, no value is created — only destroyed when we invite a customer to spend time with us and then waste their precious moments.
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