Creating a Third Place

01.26.05 / David Lemley

In the business of retail brand design, one phrase is so over-used, it’s been rendered almost meaningless. And that phrase should be the most meaningful one in the business. In fact, it employs the word meaningful.

“Creating meaningful customer experiences.” Like anything else, this concept is being bandied about because it’s what retailers really want to hear from design consultancies, since it goes to the heart of what they want to accomplish. “Creating meaningful customer experiences” is the one determinant in branding that retailers, large and small, know makes the difference between commoditization and unique positioning in the marketplace. But this begs the question: “How can we effectively go about accomplishing this objective?”

The pat answer, of course, is research. The consultancy begins by launching into research before the retail brand can be developed or revitalized, and proper positioning can occur. Research is intensive and exhaustive, encompassing many factors; the retailers’ desired demographic groups, current customer base, store locations and the competition among them. Yet, from our perspective, the real work begins after that. By digging deeper and deeper into the retail core, a clear picture begins to emerge of who a particular retailer is and what they offer. The retail operation’s core assets generally offer some kind of differentiating factor that enables the consultancy to give it a unique brand identity and positioning. From that, an entire visual brand communications system can be developed and put into place with a comprehensive brand standards guide.

While all of this is a textbook, pragmatic, and very professional approach to retail brand design, will it get the retailer to that magical point of real connection with the customer? Probably not. All of the best branding efforts: identity and positioning, internal/external brand initiatives, optimal store design, high tech components, glitzy internal/external signage, catalog programs and P-O-P are missing the point if they fail to touch the customer. If the retail brand is unable to touch the customer intellectually, emotionally—even spiritually—the branding work has been nothing more than a fruitless exercise; done for naught. Yet, this is the key component that is missing from so many retail operations. So how did we arrive at this holistic view of retail branding from the “customer experiences” cue?

Retail Evolutions

During our two decades in the retail brand design business, it’s been interesting to witness the evolution of retailing. While there have been substantial gains in the product sourcing, purchasing, technology and distribution areas of the business—which are all meant to translate to better service, more customer friendly environments (and greater profits)—there have been significant losses as well. The strongly individual retail brands of the past have given way to a new generation of much more generic retailers. Human contact between retailer and customer has become more and more minimal. An excursion into any major shopping mall proves these points.

When the customer walks into store after store, what differentiates one from another? The store layouts all look the same, the merchandise mix looks the same, the high tech environment is just as coldly modern from one store to the next, from the fixtures to the blaring Plasma TV screens and music. But where is the human contact? Where are there any human elements at all? What is the customer’s experience? Is it meaningful? Memorable? Are any ties being forged with the customer?

Experiential marketing theorizes that the customer’s experiences with corporate (read: retail) brands go well beyond tangible product offerings to the intangibles around those product offerings that form customer perception, attitudes and emotions based on their interactive experiences with the brand. These intangibles transcend product mixes—all of which can be purchased from a number of competitors. Retail marketers who still think they can sell to the customer based on the perceived unique features and benefits of their brands, had better think again. It is the intangibles—the way the customer’s intellectual and emotional needs are met, in their perception, that truly build their preferences and loyalty for specific retail brands.

Again: how do we go about accomplishing this?

Starbucks: A Case Study

When Starbucks came to our consultancy a few years ago, management knew that their stores were in imminent danger of becoming generic. Customers needed to have a fully branded experience in order to be engaged by Starbucks’ coffee shops—a world of premium, distinctive coffees embodied in one place. Otherwise, customers might as well buy their coffee at the corner convenience store. It was Starbucks’ management’s objective to make Starbucks a memorable and connecting brand experience for coffee lovers—so they would make Starbucks their chosen, ultimate destination for great coffee. In fact, Starbucks management specifically desired to become the global leader in coffee. Their stated objective from the beginning was to “open a store per day forever”!

For Starbucks, future growth, brand and corporate valuation and “getting its brand positioning right” were key; long before the idea of specialty coffee brands and coffee shops caught on and proliferated. Starbucks felt that if they got it “right”, every new specialty coffee brand that emerged would be either viewed as a Starbucks “knock-off” or a poor second to a superstar brand.

Research showed that Starbucks lacked the right retail brand platform and environment to create a premium “coffee culture”. In order to become relevant to coffee aficionados, the Starbucks brand would have to embody the culture, magic, romance and cult surrounding the exotic offerings in its shops. Those shops, too, would have to be inviting, warm environments where customers—human beings—would want to come and linger for a while, enjoying their coffee with a newspaper, just sitting and relaxing away from daily rushed routines, or experiencing the camaraderie of visiting with their friends.

By creating that “Third Place”—not home and not work—but a unique environment where people are welcome to come in and linger, a deep connection was—and still is—being made, between Starbucks and its customers all over the globe. The concept of “third place” was conceived by CEO Howard Schultz and his marketing team and implemented by Lemley Design.

Starbucks has a unique culture, and it was brought out in a special way. Starbucks’ culture is centered on the “Siren”—an alluring, fluid and human figure that gave rise to a unique iconography in its stores, signifying the natural elements involved in the roasting, brewing and aroma of great coffee. Earth grows the coffee beans, fire roasts them, water brews them, and the air carries their aroma. These icons are deeply rooted in human consciousness and artistically depict modern representations of music, mythology and ceremony; the sea, navigation, the sun, the moon and the stars. Customers connect to these images in a profound way. They speak of the human story. When retailing is put into such strong cultural context, human connections are made. When retailing creates a warm, human environment, one that the customer can relate to, that magical “meaningful customer experience” is finally a reality. Neither home nor work, but a refuge and haven from life’s routine schedules and places, the goal of making Starbucks “The Third Place” has been achieved. Countless customers—who have become both fans and devotees—attest to this daily. The Starbucks brand instantaneously delivered culture, hipness and sophistication with a $3.00 cup of coffee.

By extending Starbucks’ new brand platform to include positioning language, a voice was given to its visual brand communications. A packaging system for the coffees sold in the stores was developed, connecting each to its cultural roots. Each coffee bag is unique and its packaging and distinctive coffee stamps tell the story of each brew. When customers purchase Starbucks coffee and take it home, they bring the Starbucks culture right into their homes. Starbucks becomes part of their lifestyles.

Crucially important to the positioning and branding of a retail operation, is the establishment of employee training and internal branding initiatives. After all, every employee is a brand evangelist, or should be. The onus is on management to make certain employees who interface with the customer and are the “brand” to that customer, embody that brand in alignment with its values… and deliver on its promise. Retail specialty stores like Starbucks are service intensive. Direct interaction with the customer is the last and most critical brand touch point that determines the quality of customer experience with the brand. This last brand element brings all of our cultural cues, warm environments and shared humanity into sharp focus.

Bottom line: there is a positive thirst among consumers for a unique branded experience (read: a deeply human experience) in the retail marketplace. Those retailers who give the customer satisfaction at all levels, who serve the intellectual, emotional and even spiritual needs of the customer, will develop cult followings. It’s obvious that retailing is about far more than selling products the customer needs and wants. It is far more than offering better service. It really is about going back to our roots—the human, cultural ties that bring us all together.

Understandably, not every retailer is a Starbucks. Every retail operation is unique, and each has to be approached and branded according to their unique brand identity. This is the common thread that binds all retailers to their customers. 

ROI

My perspective, as the Principal of a seasoned retail brand design business, is that all of our creative capabilities and core services are subservient to the business needs of the retailer. We are in the design business, and I always say that: “The business comes first and the design comes second.” Our firm’s first directive is to really listen to the retailers’ needs and to address their problems with the most viable brand identity and brand communications solutions. Being conversant with retailers’ financials and delivering results—a solid ROI—is crucially important. In fact, this is the first order of business. Sharing a big picture view with the retailer, as well as seamless brand strategies that will carry them solidly into the future, is always the plan.

In the case of Starbucks, when Wright Massey and Scott Bedbury shared our brand vision for the specialty retailer with a Wall Street analyst at Starbucks’ corporate HQ in Seattle, the stock rose by $3.00 per share that very day. Over the next decade of using the toolbox we helped to create Starbucks added $5 billion US in brand value. Is investing in the proper brand positioning, and comprehensive in-store experience, or design strategy a determinant of corporate value? You be the judge.

Our mission, and passion, is to position or revitalize retail brands that drive culture and build loyalty and equity. Cultural cues are personal, relevant and truly connect the customer to the retail brand in the most meaningful way, creating a leader in its sector. And that is where the retailer’s ROI is realized.

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