I reckon that if you and I were to visit ten local stores together today, the experiences that we’d have in at least eight of them would be largely accidental. What I mean is that whether the experience was positive or negative, it would largely depend on circumstance, coincidence and chance and not on any deliberate or carefully planned experiential design. Whoever happened to be working that day, what mood they were in, what they happened to say to us when we arrived and ultimately how they met our needs would, more often than not, be entirely unplanned.

I’ve always found this curious. After all, most companies will agonize over the smallest details when it comes to things such as the taglines, logo colors and typefaces used in ads, yet exceptionally few apply as much concern or discipline to their customer experience. In fact, in a world where businesses monitor, measure and micromanage just about every other aspect of their enterprises, the degree to which we allow customer experience to manage itself is simply unfathomable to me.

Like a stage play without a script, many businesses simply throw the curtain open each day and let the actors ad-lib as best they can. Most satisfy themselves with only a vague notion of the quality of experience being delivered to their customers.

What is abundantly clear from my research, however, is that the best, most successful and future-facing companies obsess about their customer experience above all else. They go to extraordinary lengths to ensure that it’s remarkable. And, like the team at Rolex when it’s crafting a fine watch, they design, engineer and fine-tune every aspect of it.


Most businesses attempt to improve things by 10 percent. They work on existing assumptions, build on existing models and extend existing resources. And most often these attempts get bogged down and lose energy. If the prize is only 10 percent better than the current reality, it’s easy to see why people might lose interest; but if the goal is to be ten times better than the status quo, that’s an entirely more engaging prospect.

Improving something by ten times, Teller argues, is actually easier than improving it by 10 percent: “When you aim for a 10x gain, you lean instead on bravery and creativity - the kind that, literally and metaphorically, can put a man on the moon. That’s what 10x does that 10% could never do. 10x can light a fire in hearts, and it’s hard not to get excited and think that other, seemingly impossible things might also be possible. And that, counter-intuitively, makes the hardest things much easier to accomplish than you might think.”


There are no rules of retail, so to speak. That said, there are clear commonalities among those brands, retailers and technology companies that dare to push the envelope of what’s possible.

The most important of these is that they accept the harsh yet oddly liberating reality that no one really needs what they sell. They recognize that in a pre-digital world, a consumer’s biggest challenge was scarcity. The search for alternative products, brands and retailers would be difficult. Mediocre brands relied on this fact to survive. In a post-digital world, however, scarcity will cease to be an issue. Consumers will not only have infinite choice at their fingertips but also ever-present technology to help sift through it all instantly to find what’s best for them.

The good news is that the world desperately needs how you sell what you sell - the unique, remarkable and ownable experience you design around your o\product. How you sell what you sell is what will ultimately set you apart from competitors and win the hearts of consumers.


We try to rationalize why innovations from other sectors don’t apply to us, rather than focusing on why they do.


20 years ago, major recording artists made most of their revenue from record sales. In fact, musicians used to play live only to sell more records. Today, a mere 6% of the average recording artist’s income is derived from record sales. 94% comes from other activities, not the least of which are live performances and appearances. Experiences will, in essence, become the product and the primary category that great retailers trade in.


A bright new era of retail in which every shopping space is a flagship.


48% of shoppers today believe that they know more about the product they’re looking for than the sales associate helping them, and chances are they’re right.

More startling, though, is that 67% have doubts about whether the sales associate helping them is even telling the truth. We trust Google infinitely more than we trust salespeople.


We think of this [the store] as our largest product.


While only 36% of us trust an ad we see on a social network, 92% of us trust a recommendation we see there from someone we know. Even more remarkable, 70% of us trust the opinions of complete and utter strangers!


As all forms of media continue their evolution to becoming “the store,” the actual places we call stores today will begin a corresponding transition toward becoming a powerful form of media. In fact, physical shopping spaces will ultimately prove to be the most powerful, immediate and measurable form of media available to a retailer or brand.

First, because physical spaces will allow consumers to have retailer- or brand-related experiences that cannot be fully replicated online, making them extremely special. Second, because in a world of fleeing and fragmented attention, shopping spaces are an opportunity for shoppers to be fully (cognitively, emotionally and physically) engaged in a branded media experience that no other media format can consistently promise. Moreover, these physical media experiences carry a high level of measurability because the consumer’s engagement isn’t implied or estimated, as it is with most forms of advertising media. Instead, with physically media we know for certain that the consumer is present inside the experience itself - their body is physically there!

The bottom line is that physical experiences are more powerful, more memorable and more measurable than any other form or media.


According to Tim Cook, Apple stores were visited by at least 1 million shoppers each day in 2015, or 365 million visitors that year. Each of those visits is not only a potential sale, but also an important consumer brand impression.

I suspect that Apple has done the math on the impacts to the brand of 365 million potentially positive consumer impressions generated by its stores and what those impressions would cost if they were sought through conventional media on the open market. But here’s the thing: unlike a fleeing ad or commercial, a store experience is a tremendously more engaged impression. And best of all, the costs associated with creating remarkable shopper impressions aren’t incremental to the business like an ad campaign would be - they’re already paid for! The store, the people and the products are already there.

There’s also the compounding effect of consumers sharing those experiences with others. And those experiences are not simply beings shared conversationally, as they have been in the past. They’re reaching a much wider audience through a variety of social media channels.


As Angela Ahrendts, Apple’s SVP of retail, recently put it while describing the Apple store of the future, “We don’t really need to open more stores, but we need to open incredible places that almost behave like a town square, like a gathering place.”


Legendary Disney theme park designer John Hench once said, “Story is the essential organizing principle behind the design of they Disney theme parks.” For Hench and his team, a successful theme park was a zeitgeist of cast, costumes, set design, technology and attractions centered on a compelling narrative. “We transform a space into a story space,” he said. “Every element must work together to create an identity that supports the story of that place.”

What Hench recognized all those years ago - and what smart retailers are coming to recognize now - is that no amount of store design, technology, product or merchandising can replace the essential bedrock of a powerful brand story. It’s not that these other things don’t matter; of course they do. But without a cohesive and powerful story that people care about, these other elements will be largely ineffective. All icing… no cake.


Other retailers have attempted to make their store environments relevant by jumping - often without any sort of cohesive plan - into technology. The battle cry has been to create “digital experiences,” which in itself is problematic for a few reasons:

  • Too many retailers are simply bolting technology onto what is most often a mediocre customer experience instead of reimagining the customer experience entirely and then, where it makes sense, using technology to enable or enhance it.
  • They’re making a huge assumption that consumers are craving more engagement with technology than they already have each day. In a world where we’re looking at our phones 220 times a day, a physical store shouldn’t simply be a place to go and look at it for the 221st time. A store needs to be a place where magic happens and, sometimes, that magic might involve technology but it needn’t have to.
  • Many assume that the way to a millennial’s heart is through a smartphone or some other technology, but as we now know, this isn’t necessarily the case. Yes, millennials are mobile and connected, but they’re also extremely physical beings. In fact, they are more experientially oriented than older generations.

Make no mistake. Millennials are big fans of physical experiences. And if you need any more evidence of this affinity for the physical, look no further than the music industry, where live events have reached unprecedented popularity. For example, in 2015 the Coachella music festival’s sales exceeded $84M.

In an age when nearly free music is as ubiquitous as running water, why do 200,000 people camp at a three-day music festival in a desert valley in southern California? There may be many reasons, but at the heart is the promise of a kinetic experience. They go not only to hear music but to feel it and, in a way, become one with it. They go to be part of a living social thing - to soak up its energy. In a world where almost every aspect of our lives has been somehow digitalized, experiences that engage our bodies, our senses and our souls are at a premium.

Digital is what we’ve become and yet visceral is what we are… it’s what we crave. Our need to detach from the Internet and escape to reality, if only for a while, is powerful and will continue to grow as we become increasingly chained to technology.


So, if we’re honest about it, the problem isn’t that millennials dislike physical stores; it’s that most store experiences suck. I’m not saying this lightly or for effect. I mean it sincerely. Most stores we visit are devoid of any theater, excitement or aesthetic delight, much less any sort of engaging physical experience. The vast majority of retail stores are havens of humdrum and bastions of boredom!

Don’t take my word for it; think of your own experiences. When was the last time you had a jaw-dropping experience in a mall, department store or shop? Honestly, when was the last time you walked right out of a retail store and told a friend about it because you were so excited about what you’d just experienced?


They’ve been called lazy, self-absorbed and entitled. They’re largely disenfranchised with respect to the political system and feel that Establishment leaders are out of touch. They shun consumerism, home ownership and traditional values such as marriage and favor handmade things over mass-manufactured goods. They are idealists who believe their work should serve a higher purpose beyond financial gain and make many of their consumer decisions based on concern for the environment.

Who would you say I’ve just described? If you said millennials, or Gen Y, you’d be wrong.

In fact, I was talking about their parents: the baby boomer generation. Forty years ago, these were the very words being used to sum up what at the time were a bunch of pot-smoking, peace-loving hippies. Yet, who would ever have imagined then that this same generation would go on to poke a hole in the ozone layer, turn Wall Street into a weapon of mass financial destruction and preside over more global conflict than any other generation in the planet’s history?

If there’s a lesson in this, it’s that in seeking to sum up an entire generation in a few neat, tidy catchphrases and generalized behaviors, we not only risk getting them wrong, we risk losing them as customers. Yet many retailers today are doing both.


It was not the reward itself, but the anticipation of the reward that prompted the greatest release of dopamine to the brain.

By the time the odds of success changed to 50/50, their dopamine levels went through the roof! The guarantee of getting what we crave produces less dopamine than is the case when there’s some risk of coming up empty-handed.

This explains many things. It explains gambling, dating, religion, drug addiction and employee incentive programs. It also tells us something important about shopping. A shopper’s dopamine levels will be at their highest in anticipation of acquiring the thing they seek, and those levels will be even higher if there’s a known risk of not getting it. This outcome also goes a long way toward explaining the enduring appeal of off-price stores, outlet malls and even rummage sales, where shoppers have to treasure-hunt for bargains in their size, color or style. The mere fact that they may or may not find what they like produces enhanced dopamine levels.


Some would argue that, despite their imperfections, these sorts of algorithmic recommendations are a welcome alternative to the nauseating levels of mass advertising that have plagued us for the better part of a century. While I agree that no one needs more mass marketing, it’s also true that an overly data-centric approach to retail has an almost anesthetizing effects on our shopping experiences, increasingly sapping them of the exhilaration that accidental discovery can provide.

The true joy of shopping lies in the delicate balance of relevance and randomness. While it’s true that as shoppers we appreciate being exposed to things that appeal to our conscious needs and preferences, we also crave the surprise and delight of encountering shops we have no idea we’d love, products we didn’t know existed and experiences that come out of nowhere to surprise and enchant us. Physical stores can and should be these enchanted places. And data, no matter how good it is, can never replicate the experience of genuine discovery.


We may complain about the crowds of people we encounter when we go shopping, but our innate human response to crowds is quite the opposite. We subconsciously seek them out.

Have you ever noticed that a store can sit empty for several minutes but as soon as a few shoppers enter, more people seem immediately drawn to the space? In fact, given an equal choice between two shops - one empty and one with people in it - we will almost always go where others are gathered. This is the social essence of shopping in a nutshell. Crowds are the clearest and most immediate form of social proof, a reality that hasn’t changed since we climbed down from the trees tens of thousands of years ago. The presence of others in a space remains our best primal indicator that something of value is going on there.


Shopping appeals to our deepest subconscious needs and go deep within our psyche. We saw this profoundly after the 9/11 attacks in the US. While many economists anticipated a significant drop in consumer activity, which would have been understandable, the exact opposite happened. Consumers bought more, much more. It’s a phenomenon psychologists call mortality salience - the realization of one’s own impermanence - and it drives an increased desire for goods and services that “provide people with a sense of comfort and stability.”


Online shopping today comes with absolutely unsustainable levels of product returns. In the UK alone, online returns are estimated to cost retailers approximately 20B pounds annually. And in 2014, total returns in the US were 8.89% of all retail sales, totaling more than $280B in lost sales - a number that continues to grow along with ecommerce. It’s these returns, more than anything else, that bombard the bottom lines of pure-play online retailers and call into question their long-term viability.


Amazon understood that the vast majority of our purchases are purely replenishing items that we’d rather not have to remember to buy or drag home from the store. If Amazon could get straight to the shelf in the consumer’s home and make it easy to fill that shelf when it was empty, it also understood that it could negate the influence of all competitive marketing. It could essentially shut the door on its competitors.


“Every time advertisers build a better mousetrap, they learn the same things: consumers don’t like mousetraps.” The elephant in the room here is that advertising doesn’t have a channel problem. It has an advertising problem. Consumers just generally hate advertising, and with precious few exceptions, we always have. The difference is that now we have the power and the technology to do something about it.


“Social media is for people. It’s not for brands.” To his point, if you look at the top 100 user accounts on Twitter, there’s not a single retailers or consumer brand to be found. Zero. Rather, it’s a “who’s who” of media networks and celebrities.


Today we have more advertising than ever. In 2015, advertising spending was $552B worldwide, up nearly 4% from the year prior. In the US, the figure reached $187B, of which $79 (a full 42%) is still being spent on the granddaddy of all media - television.

Despite what you might hear in the press, TV as a medium is hardly dead. Americans still watch an amazing 4.3 hours of TV per day. Moreover, a recent UK-based study suggests that 90% of consumers rate TV ads as being far and away the most memorable advertising format. The problem is not that we’re not watching TV; it’s that we’re not watching TV advertising. At least not nearly the way we used to.

What people typically do when they’re watching breaks for commercials? Some check emails; others check their FB page. Some upload photos to Instagram and other shop online, watch a video or engage in some other distraction. What is absolutely consistent across the board is that almost no one is watching the commercials - not deliberately anyway. Why would you? You have a supercomputer filled with fun and entertaining content in the palm of your hand. Why on earth would you want to watch dull commercials?


The retail industry is largely being led by people who grew up believing in two immutable laws governing business strategy:

  • Mass media was dependably effective.
  • The consumer’s path to purchase was linear and largely predictable.

While Amazon may not be the sole culprit in all these closures, its impact on retailers cannot be underestimated. And it’s not just retailers that are feeling pressured by Amazon. Collateral damage has affected less likely players in the market too, including the company many of us have come to view as being synonymous with the Internet itself: Google.

One of the urgent underlying motivations for Google Express was that Google was bleeding search traffic to Amazon. Increasingly, Amazon was not simply the top organic result in a Google search; Amazon was becoming the default search engine itself, with customers bypassing Google entirely when looking for products. One study suggested that up to 55% of product-related searches are now being performed on Amazon instead of Google.


In the 1st quarter of 2016, Amazon grew its topline sales by 28%, a figure most retail CEOs would ransom their entire families to deliver. What’s even more incredible is that of each incremental dollar spent online in the US, Amazon alone now captures 60 cents. Think about that for a moment. 60% of every new dollar spent online is going directly to one company. If that’s not a sufficient show of dominance, consider this: for each incremental dollar spend in the North American retail market as a whole, Amazon takes nearly a quarter, leaving the rest of the industry to fight over the remnants.