Experiential Retailing: Now taking over all sectors

On my way back from office today I saw a hoarding by a bank, that said “Loan Lounge” – I thought this was an extremely evocative brand assigned to what, essentially, is pretty much a non differentiated offering in the financial services sector.

This actually led me to think about the evolution of retailing – I am sorely tempted to say in India – but I think this is equally true of all countries at various times in the life cycle of turning from unorganized to organized retailing – from behind the counter mom and pop style; to self service supermarkets; to indulgent departmental stores; to a mix of the two – Sephora style; to “theatre” in retail – to now – completely experiential retailing..

Interestingly, this style is not restricted to the services sector alone – though there (be it financial services; or airlines; or hotel/ hospitality – witness how most upscale bars are now called “lounge” bars, and most upscale restaurants “boutique restaurants”) it is much easier and more natural – this is true of all kinds of products at well – the Malls were the first stab at experiential retailing; the café bookstores followed; shopping while flying is an example of it. “Experience” while retailing could be in the ambience/ the combination of product ideas/ the engagement strategy between store and shopper/ the partnerships seen/ the convergence of categories/ in the way education and interaction with the product categories is built into the store…in a variety of ways!

Bose with their Theatre stores were early pioneers of the idea – but now many electronics manufacturers have taken over – Samsung does this well (their Samsung Experience store in NYC, the m-zone in Seoul); Sony does a good job of interactive education
Gaming/ entertainment as fast growing categories drive experiential retailing as well – Nintendo world and Sony Style stores have some really cool displays and arrangements for customers to interact with the merchandize.

This is really a competitive and evolving space, and the sky is the limit

Top Three Parameters that will influence Indian organizations that are Outsourced entities in the knowledge space in 2008

1. The depreciating dollar (and forecasts of a weak U.S. economy):
Will straightaway impact the bottom line. In addition, has a waterfall effect of leading to lower increases in compensation in the industry – a factor, that, in India, saw considerable inflation in 2006 and 2007 – to the tune of 15 – 20% every half year – in fact, EmPower Research’s benchmarking showed that in some cases, organizations saw salary increases on a quarterly basis! This trend had a further effect of the high attrition rates seen in the industry (stated averages of any where between 25 – 40%. EmPower Research, incidentally, is comparatively in a good position with a rate of 6%)
The flip side of the coin, though, is the fact that U.S. organizations will be under pressure to squeeze costs, and one of the possible ways of doing this is through outsourcing more and more non - core competence work
What this will also result in is a diversification of markets – Europe is already a large playing field for many outsourced organizations, the percentage contribution may go up, and Asia-Pacific may be a new market of interest
2.Consolidation in the Indian market:
2007 was an active year in this space. Many BPOs looking to build scale, and/ or move up the value chain with “knowledge arms” merged with/ acquired other organizations. It is a hot market – many investor eyes are focused on it – all evidence is that this is a short cycle, but 2008 is likely to see more action in this field
3. New Media/ Emerging Technology:
While the year 2007 was actually called the year of the blog (and blogger); 2008 will just expand in this space – from use of all forms of new media in analysis/ product feedback/ knowledge sharing to content writing; it’s all happening here. There are many forms of new media/ and many players in various facets of the space.
Technology will also increasing impact the way knowledge organizations will introduce efficiencies and scale into their businesses – the industry is at the growth phase, and at this phase, it has to really “sweat its assets”.