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THE EXPERIENCE ECONOMY: PARIS HILTON RETAIL SHOP STUDY

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2011/Experience EconomyA Paris Hilton Case Study

THE EXPERIENCE ECONOMY: PARIS HILTON RETAIL SHOP CASE STUDY

Today,andevenmoresointhenearfuture,customers takefunctionalfeatures,qualityandapositivebrand imageforgranted.Assuch,companieswillneedto applymorethanstorytellingtotheirproductscus tomersmustbeemotionallyinvolvedthroughtheir sensesandstimulatedintellectually. Thisarticleisadescriptiveanalysisoftheprofitstrat egyofcombiningtraditionalsalesprincipleswiththe onesofonlinesocialmediaintheParisHiltonretail shopsworldwidebasedonthepremisesoftheexperi enceeconomy. aprofit,amongthereasonsforthischangeinconsumer preferencearetechnologicalbreakthroughsintermsof production,transportanddistribution,whichhavecre atedproductavailabilityoflittleornodifferencemak ingitincreasinglydifficultfortheproducerstodifferenti atethemselvesfromtheircompetitors.

AFourthEconomicOffering

Succeedingintheexperienceeconomyisnotjustabout addingmeaningfulandpresentemotionalstoriesto productsasthewayitisdonemodernconsumersare notnaveastheymighthavebeenyearsback.Today, andmoresointhefuture,consumersexpectpersonal, authenticandmeaningfulexperiencesbeyondtheprod ByJensGregersen uctsandservicesthemselves.Inotherwords,according toPineandGilmore(1998)experiencesareanottobe Sincetheexperienceeconomywaspublishedbackin categorisedasaservice,itisadistinctfourtheconomic 1998theworldhaschangedsignificantly offering,whichisasdiffer especiallytheonlineuniversethrough entfromservicesasser theincreaseduseofsocialmediabut vicesarefromproducts thebasicprinciplesofparticipationand (ProgressionofEconomic connectionstillapply. Value). TheExperienceEconomy Itisthroughtheusageor Asmodernlargescalebrandingstarted consumptionoftheprod uctsandservicesthat inthe1940scompaniesshiftedtheir companiesneedtoen focusfrommarketingproductfeatures gagetheconsumersto (utilitarianconsumption)tobuilding creatememorableevents customerrelationshipandloyalty.But Anexperienceoccurs duringthepastyearsconsumerbehav whenacompanyinten iourisbecomingevenmoreemotional tionallyusesservicesas andlessmaterialisticorientated.What thestage,andgoodsas mattersnowarethestoriesrelatedto theproductsandhowtheserelatetothecustomers.This props,toengageindividualcustomersinawaythatcre isseenintermsofawillingnesstopayapricepremium atesamemorableevent.Commoditiesarefungible, thatspecialexperienceordesign. goodstangible,servicesintangible,andexperiences RolfJensen,DirectoratInstituteforFuturesStudies,ex memorable(ibid). plainsthedevelopment;[]wearemovingawayfrom theglobaltothelocal,theslowovertakesthefast,the Thetwowriterspointoutanimportantfact,thatexperi handmadereplacesmassproduction,coinfluenceand encesareperceiveddifferentlyfrompersontoperson activeparticipationbecomeincreasinglyimportantfac andthatthepersonalexperienceisbasedontheinterac torsfortheconsumers. tionbetweentheeventandtheconsumersattitude,his orhersemotional,physical,intellectual,orevenspiri Intheeraoftheexperienceeconomyitisnolongerjust tuallevel(ibid).Inotherwords,onesolutiondoesnotfit amatterofwrappingupaproductnicelyandsellitwith allasitisapersonalexperience.

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2011/Experience EconomyA Paris Hilton Case Study ratebrands.Thisstrategyisbasedonthebeliefthatthe qualitiesandpublicopinionembeddedincelebritiesare transferable.Also,celebritiescanveryoftenprovidefree advertisementastheyruinouslyareinvitedontoTV shows,picturedinmagazinesetc.suchappearances alsolowertheriskofbrandblindness, whichviewsoftraditionaladsmight experience.Certainproductscategories, whicharesubjecttoregulationssuchas alcohol,tobaccoanddrugs(medicine), canthroughcelebritiesfindtheirwayto otherwiserestrictedcommunication platformse.g.TVandradio. Sincethe1990scelebritybrandinghas changedcharacterasmoreandmore productshavebeenmarketedinthe nameofthecelebrity.Thistrendwas firstseenonamassivescaleinthefra grancesectorbutextendedintoawider productrangethroughoutthe2000s. Forexamplein2007popidolMadonna designedalimitedcollectionforthe SwedishfashionchainH&M.In2009actressPenelope CruzsignedasimilardealwiththeSpanishfashionchain Mango. AmongcelebritybrandedproductsParisHiltonhasintro ducedthewidestrange.Sincelaunchingherfirsttwo fragrancesin2005,ParisHiltonandJustMe,shehascon tinuouslyaddedmorecategoriestoherbrandedproduct universe,makinghertheleadrepresentativeforagrow ingtrendamongcelebritiestomarketproductsintheir ownname.AsofAugust2011ParisHiltonsnameis foundonsunglasses,handbags,fragrances,bedlinen, swimwear,andshoesetc.productswhicharesold worldwide.

ATwoDimensionalDesignProcess
Whenapplyingstorytellingtoaproductorservicethe sender(company)shoulddesigntheprocessacrosstwo dimensions.Thefirstonebeingcustomerparticipation towhatextendcanthecustomersgetinvolvedincreat ingtheexperience,as activeparticipantsor passivelybeingenter tained? Theotherdimension focusesonthelevelof connectionisthe productorservice appealingtothe sensesorarethepar ticipantssimplyby standersfromadis tance? Anexamplewouldbe afootball(soccer) match.Ifyouwantto havethebestpossibleviewofthegameyouarebetterof turningontheTVathome,butthisismerelyafunctional benefitcomparedtoexperiencingalifefootballmatchat astadium. Atthestadiumthecrowdiscontributingtothevisual andauraleventthatothersexperience(ibid);inother words,thereisalevelofparticipation.Further,being partofan80.000peoplefootballcrowdappealstothe sights,sounds,andsmellsassuch,thereisaclosecon nection,whichisnotfoundnorexperiencedwatchingthe samematchonaTVsetathome. Asmentionedearlierinthisarticle,forproductorservice relatedstories(storytelling)tobebelievedoraccepted bythecustomerstheyhavetobelocalised,personal, authenticandmeaningfulexperiences.Designingexperi encesshouldbebasedonanongoingprocessofexplora tion,scripting,andstaging.Inshort,howgoodsandser vicesarestagedandperformedisvitaltohowtheyare consumed(includingretentionandloyalty),thepricepeo plewillpay,andhencethevaluecreated.Coles&Hall (2008).

ParisHiltonTheBrand

BornintoafamousandwealthyfamilyParisHiltonhas beencoveredbythemediaallherlive.Themediasinter estintheblondcelebrityincreasedin2001asshefirst startedmodelling,butfrom2003shebecameahouse holdnamewiththeonlineleakoftheinfamoussextape (OneNightinParis),followedbyherparticipationinthe televisionseriesTheSimpleLife.Sincethenshehasen gagedinarangeofpublicendorsements,TVshows,pub lishedbooksandrecordsetc.AsaresultParisHiltonis CelebrityBrandingasaProfitStrategy todayoneoftheworldsmostphotographedwomen Theexperienceeconomyisacompetitiveadvantage strategy,whichisbasedonappealingtothesenses,emo everandnameandfaceisknownworldwide. tionsandinvolvementofthecustomers.Ofdifferent marketingstrategiesavailabletoinvolvethecustomers CaseStudy:ParisHiltonRetailShops Thefollowingisadescriptiveanalysisofthecustomer emotionally,fewachievethesameeffectastheuseof experiencestrategyintheParisHiltonretailshopsbased celebrityendorsement. onthepremisesinTheProgressionofEconomicValue process:makegoods,deliverservices,andstageexperi Throughoutdecadescelebrityendorsementhavebeen ences. fairlycommonpractisetosupportproductsandcorpo

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2011/Experience EconomyA Paris Hilton Case Study The1990publicationDeliveringQualityService:Balanc ingCustomerPerceptionsandExpectationsbyZeithami etal.definesserviceas[c]ustomerssperceptionofhow wellaservicemeetsorexceedstheirexpectations.From thisdefinitiontwoimportantmattersbecomeclear,the firstonebeingthatserviceisnotafixedvariable,and thataserviceissubjecttoindividualevaluation.Further, thewritersoutlinethatserviceisconstitutedbyfour characteristics,whichiffollowedwillmakeservicean integralpartoftheorganisationalculture. Servicevision:Inordertoprovideauniformlevelof serviceanorganisationfirstneedstomakethisex plicit.Inotherwords,themanagementteammust firstdecideontheservicevisionandthencom municateandimplementthisthroughoutthe organisation.Zeithamietal.articulateservice asbeingthefoundationforcompeting;[q] ualityofserviceasthefoundationforcom peting.further,[t]hatsuperiorservice isawinningstrategy,aprofitstrategy. Highstandards:Acustomerorientated organisationdefinesitsownstan dards.Thusitwillnotbasethison whatthecompetitorsdo,norwill serviceorganisationsseekstandard solutionsandtrytofitthesetoall customers.Acustomerorientated organisationlooksforimprove mentsinareastheircompetitors donotconsiderorfindworththe effort.Serviceleadersareinter estedinthedetailsandnuances ofservice,seeingopportunities insmallactionsthatcompetitors mightconsidertrivial.(ibid). Aserviceorganisationistruly customerorientated,downto theindividualcustomer,and theseorganisationsdonotcon siderserviceawaytosolveproblemsbutstrivetobuild customerloyaltyanddifferentiatefromtheircompetitors bygettingtheservicerightthefirsttime. Inthefieldleadershipstyle:Visionsandstandardsare worthlittleifmanagementdoesnotleadbyexample throughrewardsandacontinuousfocusonprovidingthe definedstandardsofservicetobeacustomerorien tatedorganisationtheservicestandardsmustbecomean integralpartofthecorporateculture.They [management]challengetheorganizationalunittobe excellentinservice,notjusttheindividualemployee [...](ibid). Integrity:Integrityisamatterofsayingwhatonemeans, anddowhatonesays.Nothingistruerinthecustomer

In2008,justtwoyearsafterhavinglaunchedtheParis Hiltonbrandedhandbagsandaccessorieslinethroughout theUSandEurope,preparationsweremadetoenterthe MiddleEasternmarket,amarketknownformono brandedstandaloneretailshopscomparedtomulti branddepartmentstoresinmajorpartsoftherestofthe world.Assuch,theworkondevelopingaParisHilton brandedretailshopconceptbegan(forbackgroundinfor mationonshopconcept:ParisHiltonbrandedretailshop concept).AsofAugust2011atotalof30brandedshops haveopenedthroughouttheMiddleEast andAsia. MakeGoods ThemainproductavailableintheParis Hiltonretailshopsarehandbags(purses), whichconstituteabout70%ofproduct availabilitytherestaresmaller goodssuchaswallets,beauty casesandbelts.Allproductsare clearlybrandedParisHilton. Theuseofhardware(primarily goldandsilvercoloured)and imitatedleatherisprevalent throughoutthecollections.The generalretailpricerangefora handbagis100140euro. AsParisHiltonisahousehold nameandherbrandiscon tinuouslydevelopedinandby themediaanyinconsistencyin theproductdesignsandher imagewouldbeconsidered untrustworthyandacheapcommer cialtrickbytheconsumers,whichcon sequentlywouldleadtoadirectand negativeinfluenceonsales.Assuch, whendesigningthehandbagscollec tionisparamountthatitreflectsthe publicimageofParisHilton;currently thedesignframeworkisbasedonthreemainpillars: fashion,glamour,andsexiness. AsPine&Gilmoreconclude,theproductsaretakenfor grantedandtheyarefundamental.Inotherwords,ina worldclusteredwithproductsandpricesoflittlediffer ence,competingonproductfeatureswillseldomconsti tuteacompetitiveadvantage,whycompaniesmustasa minimumgobeyondfocusingoncommunicatingproduct features. DeliverServices Pine&Gilmoreexplainsthatserviceisdistinctfromprod uctsandthatserviceisthenextstepinachievingacom petitiveadvantageandstagingexperiences.

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2011/Experience EconomyA Paris Hilton Case Study JensGregersenexplainshowpartofhisstrategyforthe customershoppingexperienceincludesapplyingperson alisedstorytellingtoallproducts.Allproductshavea storybasedonParisliveassociatedtothemalongwitha picturethisbringslifetotheproductsandarousesan emotionwiththecustomers. ForexampleonehandbaggroupwasnamedBFFbased onParisHiltonsBFFTVshow(BestFriendForever)and hadthefollowingstoryassociatedtoit: BFFsarealwaysbyyourside.Tobringyoucomfortand carefreefashiontheBFFhandbagsareinspiredbyParis loveforlifeandloyaltytofriends.Thisgroupwillneverlet youdownthankstoitsresistantmaterialsandconstruc tionandwillalwaysmakeyoulookgood. Thewayofapplyingstoriesknownfromtheonlinesocial mediatoactualproductscreatesacompletelydifferent emotionalattachmenttotheactualproductsbythecus tomers,storiesthatreflectandemphasizethevaluesand imageofthecustomersitappealstothesensesofthe customers.Also,thebuyerswillbeabletotalktotheir friendsabouttheproductbeyonditsfunctionalityand designAclearbenefitofcelebritybrandingcompared totraditionalandstaticbrandscreatedbyamarketing department.JensGregersenstresses.

orientatedserviceorganisation.Thebestleadersvalue doingtherightthingevenwheninconvenientor costly.(ibid).Ifthereisnointegrityorconsistencyinthe serviceprovidedthevision,standardsandstyleareun derminedanddeemedirrelevant. ParisHiltonRetailShops:TheServiceStrategy PartoftheParisHiltonretailshopstrategyisbasedon providingindividualandpersonalizedinteractionbe tweentheshopassistantsandcustomersandthereby creatingcustomerloyaltyandclosingmoresales. JensGregersen,DirectorofBrandandSalesStrategyat ParisHiltonHandbags,explains;Visitorstotheshops feeltheyknowParisHiltononapersonallevelinaso cialmediaperspectivesheislikeafriendtothemthere foreitwasparamounttodefineaservicestrategy,which inpractisemaketheconversationbetweenthecustomers andemployeesoneoffriends. Thisisdonebyensuringthatthesalesassistancefeel moreconfidentthroughathoroughunderstandingofnot justtheproductfeaturesbutofhowthedifferentprod uctsarebestsuitedtoe.g.specificbodyshapesbut evenmoreimportantly,allproductsintheshopshave individualstoriesfromParisHiltonslifeappliedtothem makingaquick,familiarandemotionalchatbetweenthe salesassistantandcustomerpossible.Theunderlying premiseistocreateanatmosphereoftrustandhonesty similartotheonefoundbetweenfriends. Besidesfrommoretraditionalsalesstrategiesastheones describedjustabovesocialmediaplaysanincreasingly importantandintegralpartinthecustomerstrategyas thisshapethelevelofcustomerparticipationandcon nectionvitalcomponentsinthecreationofshopping experiences. StageExperiences Customerparticipationandconnectionisaquestionofco creatingandfeelingpartoftheperformance,some thingthathasbeenthefocalpointofJensGregersenin hisstrategicwork,heexplains:Parisisindailycontact withmillionsoffansviaTwitterandFacebooktaking socialmediaasmystartingpointindefiningtheshopping experiencestrategywasobvious,especiallyasherfans andcustomersprimarilyareteenagersandadolescents. Thefundamentalideaisthatcustomersvisitingtheshops canrealtimereadaboutParisHiltonswhereaboutsand opinionsvialargeTVscreensconnectedtoherTwitter profile,butmoreimportantly,theycansendgreetings directlytoheralongthelinesofHiParis.ImMaryvisit ingyourshopinDubai,lovesit!Inotherwords,thecus tomersbecomecocreatorsoftheshoppingstageand performanceintheshopsbymergingsocialmediawith anotherwisetraditionalshoppingenvironment.

SocialMediaasanIntegralSalesStrategy
WithonlinesocialmediasuchasFacebook,Twitteretc. thedistancebetweenthecelebritiesandtheirfansor followershasdecreasedsignificantly.Itisnoweasier thanevertolearnthelatestnews,whereaboutsand opinionsofacelebrityoverarethedayswhenthe printedpresswastheonlysourceofcelebrityinforma tion.OfthedifferentsocialmediaTwitterisprobablythe mostpopularamongcelebritiesandtheirfansforex ampleasofAugust2011,JenniferLopezhadabout2,5 millionfollowersandParisHilton4,5million.Besides frombeingawaycelebritiescanexpresstheiropinions socialmediaalsomakesitpossibleforthefanstocom municatedirectlywiththecelebritywhichalsogives celebritiesthechancetobecomefamiliarwithreactions ofthefanstotheirbehaviourandopinions. Aspeopleincreasinglyidentifythemselvesandbuildtheir personalbrandandimagethroughonlinesocialmedia anyserviceorientatedbusinessoranybusinessforthat mattermustincludethiscommunicationplatformin theirmarketingandbrandstrategy.Also,customersare morethanhappytoexpresstheiropinionsonlinethus makingsocialmediaaparamountsourceofinformation butcompanieswillonlysucceedifdonesorespectingthe premisesofthismedia.