The Industry Insider

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Talk Show
UNIQUE AND AHEAD
THE NEW CUSTOMER
EXPERIENCE
We tapped into experts from a cross-section of experiential retail to find out about
emerging trends, new definitions of service, and the paradigm shift brought about by
digitisation. Read on for insightful musings and predictions from industry leaders at the
rn. 3wma
VICE PRESIDENT MARKETING,
MERCEDES-BENZ CARS
top of their game.
- HOSTED BY LIGANOVA -
CLAUS SENDLINGER
CEO, DESIGNHOTELS
WHICH TRENDS WlLL
SHAPE THE INDUSTRY
SECTORS IN THE
COMING YEARS?
WHAT ROLE DOES
BRAND, PRODUCT AND
CUSTOMER EXPERIENCE
PLAY HERE?
we know it today, will soon no longer e ~st
in its current form. Customer traBc $11
decrease. One can either choose to accept
this or not. Those who accept it, which is
unavoidable in my eyes, will create space
for new retail models: new models where
the personal approach, haptic, spatial a d
furthennore connected brand, product
and service experiences receive the right
to exist. This development will accelerate
"pure digital players", who slowly begin to
spatially present themselves.
)) CUSTOM
WlLL DE
VINCENT BODO ANDRIN
~ccodkg to Nikold KondratiePs
."long waves theory", which describes the
economic history of the past 200 pars
in cycles, we are currently in the sixth
Kondratieff with health care being the
&ving force. In this theory., biotecbnology,
enviro-ent and psychosocial hwlth are
the dfiwers of innovation for our futtue and
will significantly influence all areas of life,
and thus the majority of our purchasing
decisions. Health today is a precious
resource, whicb neads to be catered for
holistically.
Furthermore, brands and their products
must have a distinct positioning designed
for the long term. In today% fast-paced
world, luxury is continuously redefined
and reinterpreted. The "Five Stages of
Luxmy" offer a good structural barometer
for brand positioning. They were defined
by the British trend forecasting company
The Future Laboratory and are based on
the subjective perception of luxury and the
R TRAFFIC
:REASE. ((
"Five Stags of Luxury' by The Fwtvre Laboratory.
st* 2: ~yred~ St-New York
SAID NAFID
SENIOR DIRECTOR RETAIL BRAND. NlKE
VlNCENT BODO ANDRIN
MANAGING DIRECTOR,
LIGANOVA.THE BRANDRETAIL COMPANY
= Digitisation and individualisation
will occupy us more than ever in the
future. Yet advancing globalisation and
further growth of the cities will also bring
a number of changes which we must
anticipate in our marketing. As a futureoriented
brand, Mercedes-Benz wishes to
offer its customers far more than "only"
technically mature, high-quality products
with an appealing design. It is aIl about
addressing the customer individually,
and in the end about personal lifestyle.
Our products and services must be
tailor-made, and make the customer's
way through the jungle of everyday life
easier. Whenever they encounter our
brand, customers must have the feeling
that no one takes better care of them
than Mercedes-Benz. We call this holistic
approach, which goes well beyond the
vehicle itself, a Best Customer Experience.
future purchasing behavior of consumers.
Stage one is classified by ostentation,
bling and pomp, whereas the 6fth stage
describes the search for the meaning
of life. The laher is about emotions,
connection to nature and the deeper
meaning of happiness and health. Brands,
products, as well as service providers
must know their customers and position
themselves within this matrix in order to
be sustainable:
Five Stages of Luxury
Stage 1: Acquisition &Value
Stage 2: Discernment &W6alth
Stage 3: Emotion &Experience
&age 4: Responsible &Austere
Stage 5: Intellectual & Poetic
The connection of the physical,
digital and emotional consumer experience
will shape the industry in the coming years.
This is already starting to happen today,
though a full, integrated and connected
experience remains rare. Some brands
are doing well in one of these fields, for
example, they do physical really well but the
emotional connection or digital experience
is lacking. At the end of the day, product
is king. In order to deliver a premium
consumer experience, the core of your
storytelling should be around the product.
If the goods aren't right, they won't sell.
The customer journey should begin with
the product, and the product should be the
protagonist. Brands today understand the
importance of storytelling, so you have to
make sure that both your product and the
story you build around it are authentic,
qualitative, and bound in innovation.

-= -
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COMPANIES ARE
PLACING EXPERIENCES
AT THE CORE OF THEIR
MARKETING STRATEGY.
DO YOU AGREE THAT
THIS FOCUS IS MORE
EFFECTIVE AT CONNEC-
TING CUSTOMERS
EMOTIONALLY TO
THE BRAND?
(II) Naturally customers must experience
what it means to be a Mercedes-
Benz customer. This applies both
figuratively and literally. Emotions have
always played a major role in this, and
are part of our brand identity and brand
philosophy. Examples include iconic
vehicles such as the Pagoda, the famous
Gullwing models of the past and present,
or the CLS. Ever since the invention
of the automobile, combining these
emotions with intelligent mobility has
been our constant motivation. Thanks to
an unrivalled combination of appeals to
the heart and mind in equal measure, our
brand embodies modern luxury like no
other automobile brand. We take this to
mean an innovative lifestyle that allows
freedom of action, and this also has a
great deal to do with time and space. What
does my car say about me, what values
does it convey, how innovative is it, and
how does it support my needs for safety,
comfort and sportiness. These are the
questions that are uppermost in people's
minds all around the world today. Plus
there are megatrends such as efficiency
and connectivity. It is our task to give
convincing answers with all our activities
and in all these areas. This makes our
brand a life companion, and therefore
relevant and desirable.
Communicating with consumers
has been replaced by providing a full
consumer experience. If you look at maditional
marketing, it is usually a message
that is being delivered to customers, a
launch of something new or a unique
angle. When it comes to the full consumer
experience, it's really about engaging
the consumer's five selises. The product
may not be any different to others on
the market, but the art of storytelling
makes the consumer feel like they can't
live without it. Brands should be asking
themselves, how do we drive people to
our point of sale? How do we inspire and
engage them? And how do we convert
them to loyal, repeat customers?
The product or service should
always be paramount. If that doesn't work,
even the best storytelling will be useless.
' INNOVATION
AND
TECHNOLOGY
ARE ESSENTIAL
INGREDIENTS
FOR A SUCCESS-
FUL BRAND
AND CUSTOMER
EXPERIENCE.

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I
Des~gn Hotel - carved into the Jahl Akhdar's rugged landscape
IN A DlGlTlSED MARKET-
PLACE, WHAT ROLE
DOES CONTENT AND
STORYTELLING PLAY?
Content and storytelling go hand in
hand. Content educates while storytelling
excites and inspires.
Storytelling has an enormously
important role to play. Mercedes-Benz
has an internal Digital Media House
which generates relevant content for our
own digital platforms, the Mercedes me
stores and social media channels. All this
content is produced across the various
types of media (text, images, video). We
have been successfully using this meshed
form of storytelling for many years. But
content is not only produced in-house, as
we have already gone a step further in the
digital world: we allow guest authors to
publish arGcles and blogs on our portals,
for example. We are in close contact with
digital opinion-leaders to whom we give
exclusive insights into our brand, our
products and our history.
Storytelling and content
essential and will remain
so for the time being. What will change
is the brutal increase in the complexity
and speed. It is no longer enough to tell a
story or to only use several synchronised
channels. The development of content
within each customer-speciiic context and
in an increasingly fragmented target group
world, the bundling and harmonisation
of all communication channels and experience
platforms, multidimensional, simultaneously
and at unprecedented speed is
the great challenge of the future.
D i g i t a l means global.Technology
has no barriers and purchasing decisions
have no boundaries. On the one hand
this is a big advantage to the consumer,
but on the other hand, the immense
variety of products becomes a challenge
for the consumer. This is what ultimately
leads to the increase in brand disloyalty.
Technology shifted the balance of power
away from the companies and toward the
consumers; now companies must react
and they must do so by providing high
quality products and services. Digital
storytelling should back up the product
as consumers are increasingly questioning
the product cycle.
I
I
HOW IMPORTANT IS THE
EMPLOYEE EXPERIENCE
IN ENSURING HIGH
STANDARDS OF
CUSTOMER EXPERIENCE?
Only employees that
are part of their companies' brand world,
are integrated and identify with the brand
can be convincing brand ambassadors,
creating authentic and unique "brand,
product and service experiences". In
relation to their employees, companies
will soon have to rethink and say goodbye
to the traditional employer / employee
way of thinking. The old way of thinking
will make way for a new symbolic working
model. Companies will be seen more and
more as a platform, on which employees
can develop in order to be successful
together.
In order to produce outstanding
products and to offer unique services,
we need the best employees. Former
Google CEO, Eric Schmidt, and SVP of
Products, Jonathan Rosenberg, call them
"smart creatives". We need to encourage
these employees who are always pushing
for change and bringing new ideas to
the table. They are set on turning entire
industries upside down.
An increased employee experience
results in an elevated consumer experience.
Empowering and exciting
employees in physical stores drives conversion.
The same can be said for service
desk assistants in digital stores. The moment
the consumer comes face to face
with an employee is a crucial one. As a
brand representative, the staff should
possess product knowledge and the confidence
and ability to complete the brand
story that you've put so much effort into
constructing and conveying.
= With our growth strategy and the
accompanying "Best Customer Experience"
marketing and sales initiative, we
give our employees additional orientation
and motivation. Moreover, there is the
attitude that comes from our brand claim
"The best or nothing". If we live out this
attitude and are guided by it in everything
we do, we will succeed in achieving our
goals. For what is now 129 years our
employees have been among the most
important ambassadors for our brand, and
they make a major contribution to ensuring
that Mercedes-Benz stands for top-class
automotive engineering. Their motivation
and desire is to search for the best possible
solution. Personal commitment and the
impulse not to be satisfied with what has
already been achieved are attributes that
are highly appreciated by customers all
over the world.
))AN INCREASED EMPLOYEE
EXPERIENCE RESULTS IN AN
ELEVATED CONSUMER EXPERIENCE.
EMPOWERING AND EXCITING
EMPLOYEES IN PHYSICAL STORES
DRIVES CONVERSION. ((
SAID NAFlD
Google Headquarters

Talk Show
EXCEPTIONAL SERVICE
HAS TRADITIONALLY
BEEN RESERVED FOR
PREMIUM CUSTOMERS.
YET THE IDEA OF
CUSTOMER EXPERIENCE
IS GOING MAINSTREAM.
WHAT DO YOU THINK
IS DRIVING THIS SHIFT?
= Customers nowadays have a
completely different set of expectations
of the brand and its products than just a
few years ago. They want an intelligent,
individual and comprehensive service, and
the opportunity to establish contact with
a brand when and wherever they like, on
demand. Extraordinary brand experiences
are not just reserved for VIPs, they must
apply to all customers and we are working
towards this with, e.g., Mercedes me.
-1 The approach and
range offered by online shops is becoming
ever better - thus making it easier for
consumers to gather information and
form an overall picture, e.g., where the
desired product is available and who offers
it at the best price. A few clicks later and
the product is on its way to the customer
who can then try it on, test it out, and
choose simply to either send it back or
keep it. This convenience, efficiency, speed
and transparency of online shopping
have become the dimensions of service
that today's customer expects to receive
"through-the-line". The online store
knows its customers much better - despite
having shorter customer relationships,
and is therefore often superior in terms
of service when compared to the retail
store. This digitally-maximised availability
means there is less and less reason to
go into the city centre, to search for
a parking space and to track down a
store in order to try out a product. The
disappointments inflicted by stationary
shopping have burned deep into the
memory of consumers over recent years.
The opportunities of being able to reorder
a product that has sold out or to have it
remanufactured do not even exist today.
There are hardly any service concepts
that consider stationary retail as an
interface for digital and analogue, and
thus promote the solidarity between the
digital and stationary worlds. Why the hell
should customers go stationary shopping
in future, if they cannot expect to find
something really special, unique and
which fulfils their individual needs?
Great products are everywhere;
great experiences are hard to find. Traditionally,
brands have focused on a very
segmented consumer group, using all
their marketing resources to access that
group alone. These days, there is less
segmentation because digitisation has
democratised access to information. For
example, premium consumer experience
that used to target the VIP sector is now
available for the entire world to see,
and share. Generally, a less segmented
approach has led to increased sales. So in
a sense, the luxury experience is no longer
easy to deliver to an exclusive group, and,
moreover, it makes business sense to open
it up to a wider audience. That said, if
you have repeat customers that spend a
lot of money each time, you can maintain
exclusivity with personalised invitations
and the like.
It's the combination of different
factors: globalisation, technological progress,
education and product variety. In
addition, more people can afford more.
We-see a rising middle class in emerging
markets, who are travebg more and
expect special service.
Ernhates flying @q.wWt@* '-
)) EXTRAORDINARY
BRAND
EXPERIENCES
ARE NOT JUST
RESERVED FOR
VIPs, THEY MUST
APPLY TO ALL
CUSTOMERS. ((
DR. JENS THIEMER
WHICH BRANDS BEYOND
YOURS DO YOU LOOK
TO FOR INSPIRATION IN
BRAND AND CUSTOMER
EXPERIENCE?
.
w h -
1 E-:.- -4:-
-would say &e fm retail3-
for air travel, aad tbe Luxury Colleerion
and W Hotels, for accommadation. In
general, it's the emotional effect these
brands have that makes them stand out.
Apple is able to deliver what they're
promising: technology that makes" life
easier, that you can*t live wihout anymore.
And their entire journey - whether online
or ih-store - provides context.
From a travel perspective, Emirates is
among the best. A 10-hour fli$ht with
them doesn't feel that long, because
you2ne dways lbeing taken cafe of. They
provide an intuitive service that feeIs
natural; there's a lack of awkwardness that
makes it feel comfortable. When it come3
to hospitality, such experiences a still
stuprising. The same goes for W Resorts:
their remote locations mean they're
not quite mainstream2 and one tends
to be surptised by the experience of an
unexpected lifestyle.
- - ' . U ~ ~ ~ .
With the "Meaningful Brands
Index" Havas Media has identified 20
brands &ats according to eonsumer perceprion,
have a significant impact on
our lives. Google, Nike and Volkswagen
- to name a few. Artisanship is playing a
greater role in the luxury segment and is
evidence of consumers' growing need for
individualitp, authenticity and sustainability.
It is aIso our credo at Design
Hotels; we see ourselves as curators of
artisans in the hotel industry and choose
the fight produets &om the right hotel
operator from a v~riety of 'design-led"
hotels.
Berlin, . for example, has a fresh and
interesting collection and product presentation,
and MP. Porter is ~trong in storytelling
- however, in the areas of service,
networking or new ways of interaction
and ezperience, there is much room for
improvement.
I
Apple Stere l New York City
There are many examples of outs~anding
produet, brand and service experiences.
Mercedes me will do for us what
iTunes does foi Apple. The added value
provided by Nespresso Club &er the
purchase af a ceffee machine will also be
provided for our customers by Mercedes
me. It's all about comprehensive digitd
and physical brand experiences
.
that go
beyond the purchase of he product and
exceed customer expectations