Profiting From Experience

Our parents and grandparents told us (usually after we got into some kind of trouble) that experience is the best teacher. Assuming one actually learns from his or her experiences—or is wise enough to take a lesson from someone else’s experience—the old proverb is true. Today, however, like most of us, good old Experience has a lot more responsibility. It’s not enough just to be a teacher; experience has to be a top-notch salesperson as well.

Much has been said recently about how consumers no longer shop just for the goods, they shop for the experience of shopping for the goods. B. Joseph Pine, one of the authors of The Experience Economy, summed it up neatly in the book’s first chapter: “While commodities are fungible, goods tangible, and services intangible, experiences are memorable.”

Or, as comedian Jerry Seinfeld says about senior citizens and early-bird dinner specials, “They’re smart. They’re not going to pay three dollars more for the same piece of chicken just because it’s dark outside!”

The group of seniors whom Seinfeld usually parodies grew up during the Depression. At the time, America’s economy was a producer economy; it hadn’t even begun its shift toward becoming a service economy, let alone an experience economy. To Seinfeld’s parents (and mine!) it really is about the chicken. Younger generations value the convenience of having someone else buy and cook the chicken and clean up after dinner. And when you’re trying to impress a date or a business colleague, the same piece of chicken is called Cornish game hen or coq au vin (presumably served after dark), and it might cost $30 more.

Of course, you could take a date or colleague out for the early-bird special—it would surely be memorable—but even Seinfeld’s seniors are buying an experience, though they may not realize it. They’re buying the comfort of food they’re familiar with, and, more importantly, they’re buying the company of peers and a reason to get out of the house if they’re not working or otherwise involved in the community.

At the recent JCK Show in Las Vegas, keynote speaker Al Molina, the Phoenix-based jeweler who knows how to package an image as well as any of retailing’s great legends, talked about the importance of selling an experience. When a cup of coffee or a bottle of water leaps from commodity status to premier status through branding and advertising but diamonds and jewelry—which are used to mark some of life’s most significant moments—are viewed as commodities, something’s wrong.

The evening prior to Molina’s address, a group of diamond supplier W.B. David’s top retailers were invited to the launch of its “Leading Jewelers of the World” program, emphasizing the importance of selling the luxury experience along with diamond jewelry. Retail prices of individual pieces to be included in the program were never discussed—but guidelines for creating a luxury shopping experience were.

Why are there so many upscale retailers in Las Vegas? Because visitors want to take home the fantasy. Goods are sold all over the United States, but there is only one Forum Shops at Caesars with its talking statues, one Venetian with its gondolas, or one Madison Avenue, one Rodeo Drive, one Michigan Avenue, and so on. Even if you’ve gone before, you go back whenever you visit the cities where they are.

Jewelers can order product through catalogs or from sales reps, but they go to trade shows to see, touch, try on, and learn what else is new—and also to meet peers, pick up new business ideas, and get a refreshing change of scenery.

That’s why you must bring a little of the Las Vegas fantasy back to your store. You don’t need a “Grand Canal” or even an exhibit hall, but you owe it to your customers—and your balance sheet—to give them an experience worth repeating, again and again.