Consumers will never trade up unless they experience it themselves
Launch of Windows 8 – A case study in power of consumer experience
In case you missed it, Microsoft has launched Windows 8, the latest version of its operating system. The moniker "8" would imply iterative upgrade to the ubiquitous operating system that makes all computers run. Windows 8 is NOT a simple upgrade. It represents a whole new way of interacting with your computer. It has been designed from the ground up to be touch enabled for tablets. Win 8 has "tiles," which make your screen infinitely customizable to fit your needs and how you work.
Not surprisingly, Microsoft has spent a lot of time and money in creating demos that will engage consumers to try out Windows 8. They have also spent a lot of time with key retailers on training for retail floor staff. In fact it was reported that Best Buy invested 50,000 hours of training in getting ready for Windows 8 launch. In short, if there is ever a time for tech retailers to differentiate it be right now in changing the consumer experience with Windows 8 tablets and PCs. The stage is set. Differentiated products are available. Retailers can load demos on machines that the consumer can touch and do. Are the retailers ready to execute?
Retailers are creatures of habit … and old habits die hard
Almost all of today's bricks and mortar tech retailers were founded before the explosive growth of online retailers. As little as a decade ago, product margins were much fatter. The consumer choice of products range was much less. As a result, the retailers fell into a habit of announcing new products, promoting their arrival, and featuring them in ads and waiting for you to come in and buy.
The hard reality is that most retailers are comfortable in a product centric world. In technology retailing, this results in advertising key features and a price. In store merchandising of technology emphasizes range of the assortment, and key distinguishing features like screen size, weight, or other physical attributes. The bottom line is that tech retailers are stuck in the rut of "product presentation", with the notable exception being Apple. The growing challenge is that if consumers simply want to compare product features and price, online is faster, more convenient and usually cheaper.
The critical differences between Demonstrations vs. Presentations
On the surface it might seem that a "demonstration" is the same thing as a product presentation. However, from the eye of the consumer they are entirely different things. By its nature, a demonstration should be focused on the benefits for the consumer and how they will use a product or service. A good demonstration in fact lets consumer actually "test drive" and experience the product for themselves.
In contrast, a "presentation" is very product centric and typically driven by the sales person. The sales person decides which features/benefits are important and then "pitches" them to the consumer. A presentation by its nature is very "pitch" driven emphasizing the key "selling points". A presentation tends to be very sales person driven, with the RSP "telling and showing", and the consumer passively watching … if they stick around.
The differences seem small on the surface, but are huge in the eyes of the consumer:
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Demonstration
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Presentation
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Tech retailers are struggling … Why is it so hard to change habits?
Initial previews of holiday sales indicate that online will be up at least 15% again this year. As we and others have posted, the number one strategy of bricks and mortar retailers this holiday is price matching with online retailers, especially Amazon. Does anyone else see a death spiral here? Why is it so hard for retailers to engage consumer and use demos?
As a behavioral psychologist, I can cite numerous studies of how hard it is to change any ingrained behavioral habit. Retailers have decades of product centric experience. Manufacturers have perpetuated product centric marketing and even push their scripts for product presentations highlighting what they believe to be the most significant features.
The bottom line: A true demo focused on the consumer is a lot of work involving new behaviors! You have to ask consumers questions about what they value and how they might use the products. You then need to engage them in the product demo so that they can experience that and more. The simple reality is that it is easier and faster to tell and show, than to be engage consumers personally in a way to create experiences that are relevant for them.
Consumers won't trade up without experiencing what good is!
All of us have bought products purely on price. With today's race to the bottom and online capable of pricing of a superior range of products, it is a death spiral few store based retailers will survive. The reality is that most consumers evaluate their needs, and if it is an important product like a tablet or computer, they will focus on the "middle". Experiential demonstrations are so critical for bricks and mortar retailers, because they "move up the middle" to higher functionality and price … IF the consumer experiences what is best FOR THEM!
Presentations are designed to tell you what good is for the "average consumer". Demos let you discover what best can be for you in your lifestyle. As the personal experience value goes up, consumers upgrade their expectations … they BUY what they value vs. being sold what the sales person presents.
Microsoft's Windows 8 creates a whole new world of opportunities for tech retailers to differentiate value by engaging consumers in personal touch and do demos. It will be very interesting to see which bricks and mortar stores step up to engage consumers through experience, and which fall back on old product centric habits of presentation. At this point it becomes a critical case study of execution, and the ball is clearly in the retailers' court!
Consumers vote with their credit. Results Count … everything else is conversation until we see how online holiday sales stack up against retail stores.
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Posted by: Mia | October 13, 2013 at 10:45 AM