Over the past 20 years, technology has transformed retail. Mobile phones have become conduits for communication, entertainment, and commerce.
Once a novelty, technologies such as augmented reality have become commonplace in digital merchandising and selling tools. E-commerce, which in 2003 amounted to a rounding error on most retailers’ profit and loss statements, has become table stakes for any business wishing to survive.
This shift is more significant than consumer-facing innovations. Amazon, once a profitless aggravation for traditional retailers, has become one of the most valuable companies in history by leaning into the behind-the-scenes science of retail: the physics, math, engineering, and data of moving goods from production to consumption.
Today, we sit on the edge of another technology revolution in retail, with investment by retailers in Artificial Intelligence (AI) and machine learning projected to increase up to eight-fold by 2032.
Yet, despite all the investment in technological progress, many retailers today need help to stay afloat, grinding it out each day, one promotion at a time.
While technology has advanced the mechanics of retail, it’s also opened the door to something else: a historic explosion in new competitors to traditional retailers.
Among them are third-party marketplaces and direct sellers to discounters and social media influencers—all battling it out for finite, fleeting, and increasingly fragmented slivers of consumer attention.
Indeed, the existential challenge facing most retailers today is how to command disproportionate attention.
How do they do this when superior selection, convenience, and price have largely become the domain of large international marketplaces and mega-chains, and digital advertising is relentlessly more expensive while declining in its effectiveness?
The answer lies less in deploying new technology and more in something rarely discussed in retail circles: art.
Because, as it turns out, attracting attention and promoting recall are what art does best.
A growing body of scientific evidence suggests that art, regardless of form, has a uniquely stimulating effect on our brains.
According to Daniel J. Levitin, author of This is Your Brain on Music: The Science of Human Obsession, listening to a favourite song or a familiar style of music lights up almost every region of our brain, including areas linked to memory.
Experiencing art has been proven to boost blood supply to the brain, producing rushes of dopamine and activating both cognitive and emotional activity.
Most importantly, consumers look to retail to play a more artistic role in their lives. For young consumers, shopping and entertainment are merging.
If retailers want to generate disproportionate attention and recall while giving shoppers the ‘entertainment’ they want, they need to begin thinking less like retailers and more like artists.
It starts with a story
So, what is it about art that our brains love so much, and how can retailers tap into this to garner increased levels of attention? Research suggests two key factors.
The first is understanding that art is a vehicle for storytelling. A study by the London School of Business found that when dry factual data is expressed through a story, readers are likely to remember almost 60 percent more than if the same set of facts were simply listed.
Retail can serve the same important human needs, and there are worthy emulators to follow. Patagonia, for example, puts a story of environmental activism at its core, inciting its values-based community of consumers to act against climate change.
US toy store chain Camp builds themed stories into beautifully crafted entertainment experiences for families while selling toys.
New York based B&H Photo and Video has spent more than 50 years telling a story of superior expertise, informing and enlightening customers about photography and film, becoming world-renowned in the process.
When we buy from these kinds of brands, we’re not just buying a product.
We’re also buying into the story. Four areas — culture, entertainment, expertise, and design — offer strong, own-able footholds from which brands and retailers can successfully compete without attempting to out-compete Amazon and others on price, convenience, or selection.
From products to productions
A brand story cannot simply be a platitude or vague idea buried in the company’s mission statement. Like a production, it must come to life for consumers across their experience.
For Patagonia, this means telling the story of environmental activism every day, in varied ways, at every touchpoint along the consumer journey, from its website content and ad media through to the recycled materials used to build stores and offices, from the fibres used in garments to the character and values of the people they hire.
It’s the only story the company tells. Through its commitment to telling the story, Patagonia has developed a loyal, global community of customers who come to the brand not simply for a product but also for a sense of shared values and community.
Brands such as Patagonia have become the cognitive defaults in the category and have done so by maintaining an obsessive focus on telling its unique stories, stories that link directly to tangible human needs. The company has set itself apart from the sea of commodity competition in its categories.
Becoming unforgettable
A brand’s job is to be experienced and remembered, offering more reason for retailers to turn to art. Art has been proven to create more profound, longer-term memories than other data forms.
Perhaps this explains why decades-old song lyrics or movie lines are retained in our cognitive filing cabinets. Art tends to lodge itself deeply into our memories.
The key to unlocking this power comes from first understanding that human memory is not unidimensional. In fact, we have at least six unique memory inputs.
First, roughly 20 percent of our memory of an experience is generated from visual inputs or our iconic memory, which processes what we see.
The remaining 80 percent is divided between our echoic or sound memory, our olfactory memory, our gustatory or taste memory, our haptic memory to process what we feel and our cerebellum, which processes the emotions conjured by the experience.
Most retailers focus almost exclusively on the visual elements of their customer experience, ignoring the other, arguably more powerful sensory inputs. In doing so, they negate 80 percent of a business opportunity to be remembered.
Studies have established the inordinate power that scent has on our physiology. That smelling a rose, for example, activates exponentially more brain activity than simply looking at a photo of a rose.
Other research has shown that playing French and German music in a wine store, on alternating days, for example, results in a disproportionate percentage of sales swinging in lockstep to French or German wines, even when shoppers are oblivious to the music played during their visit.
The influence of involving motor skills to boost memory cannot be underestimated. Students asked to draw a listed series of words, remembered 175 percent more of them than a control group asked simply to memorise the list. The more memory pathways a retailer unlocks within a given experience, the more unforgettable the experience becomes.
Regrettably, most retailers focus exclusively on the visual elements of their customer experience, ignoring the other, arguably more powerful, sensory inputs. In doing so, they negate 80 percent of their opportunity to be remembered.
To remedy this, retailers would be wise to ask themselves what a blindfolded shopper would take away from the experience in their stores. What, if anything, would they hear, smell, feel and taste? And how each of these sensory inputs should support the business’ story.
These two things in concert — a meaningful overarching story connected to core human needs, underpinned with sensory and emotional involvement — produce disproportionately more information about the experience, forge deeper neural pathways, and, thus, create deeper recall.
This explains why, according to our research, such retailers also enjoy better-than-average revenue increases, profit margins, customer loyalty and earned media values.
Rehumanising retail
As for technology investments, retailers would be astute to consider these costly choices the way any great film, music, or stage director might: prioritising those technologies that help to tell the unique story more clearly and impactfully.
Regrettably, in our pursuit of the science of retail, we’ve lost much of its humanity!
The psychology, physiology, and sociology that sit at the centre of why we shop and how it serves our deeper needs as human beings, the stories and experiences that make a brand worthy of attention and recall.
In a world rife with competition, commodity sellers and consumers are in search of meaningful experiences, so a return to the art of retail may be just what the industry needs.
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