(BPT) - By Lee Hyang-eun, managing director of the Customer Experience Innovation Division at LG Electronics
We are living in the era of the ‘experience economy’ where the ability to offer customers memorable experiences has become key to brand reputation and indispensable for business growth.
Within this context, companies need to shed the description of ‘manufacturer’ or ‘provider of goods and services’ and, instead, transform their identity into that of ‘partner for a better life.’ This, however, can only be achieved by building solid, sustainable relationships with customers through the realization of differentiated experiences that offer unexpected value and gratification. In today’s environment, producing quality goods is, by itself, no longer enough to guarantee customer loyalty.
Customer loyalty is now viewed by many as an outdated term, especially where the MZ Generation (a widely used term in South Korea that encompasses millennials and Gen Z) is concerned. One of the most powerful consumer groups, MZ Generation take a more case-by-case approach to purchasing, rather than sticking with a particular brand out of any sense of loyalty. They typically seek out solutions that fit with their lifestyle, while also looking at financial cost, environmental impact and whether or not the item in question delivers an element of ‘emotional satisfaction.’ On this last point, companies are now using the power of data to help them quantify and categorize the constituent parts of ‘satisfaction’ and develop seamless, hassle-free experiences that offer practical and ‘emotional’ benefits to customers.
Attached and Connected: A New Standard for Brand Power
To gain a competitive edge in the era of the experience economy, establishing an emotional connection with customers has never been more vital. More and more companies are recognizing this fact, and, to this end, are making every effort to improve the customer experience (CX). Fostering a connection in this way can result in a deep relationship between customer and company that grows stronger over time and runs deeper than those based on the former model of customer loyalty.
Unlike physical goods, experiences don’t depreciate in value. Rather, companies can increase the value of the experiences they offer by constantly refining and evolving them which, in turn, may lead to better company-customer relationships and business outcomes. Ultimately, how expertly a company can develop and innovate in all areas of the CX will be a determining factor in their market performance and brand value — not just in the short-term, but in the medium- and long-term as well.
Transformed Retail Spaces to Attractions
With the ubiquity of online shopping, consumers are less likely to spend time going to offline stores — unless, that is, they offer something genuinely exciting or intriguing. Creating unique, in-store experiences or customer zones that offer a relaxing, inviting atmosphere that one wouldn’t typically associate with a traditional retail space is a necessity for retailers looking to lure the MZ Generation away from their favorite online stores. Such activities also come under the umbrella of CX and represent an important touch point for establishing a greater rapport with and understanding of target customer groups.
Marketing is another arena where brands can connect directly with consumers to actively communicate their values and philosophy, but catching the attention of people who encounter more than 3,000 advertising messages a day is no simple feat. In this climate, spatial marketing — which is conducted through sites such as flagship stores and pop-ups — is an excellent solution for standing out, and a great way of delivering one’s unique identity and messaging. A physical space can ‘embody’ what a brand stands for on multiple levels — from décor and design decisions, to location choice and the way on-site interactions are directed or guided. Add in a curated selection of products and personalized demonstrations tailored to the audience, and a brand can provide a versatile experience that customers will likely remember and resonate with.
‘Retail technology’ — the integration of information and communications technology (ICT) in retail settings — further enhances the ability of spatial marketing to stimulate an emotional response, one that can draw potential customers to a brand, or solidify the affinity that existing customers have for a brand.
Spaces are where our lives unfold. They are where we make memories and form opinions and relationships that can last a lifetime, and this is where the true power of spatial marketing resides. Through cutting-edge technologies, the empathetic consideration of space and a thorough understanding of what consumers value, LG continues to deliver original, unique experiences to millions of customers worldwide. Around 800 of the company’s expert designers are currently hard at work developing customized products based on comprehensive and ongoing analyses of today’s diverse consumer lifestyles.
At Milan Design Week 2022, executives from LG’s Home Entertainment and Home Appliance & Air Solution companies introduced LG’s ‘CX innovation’ management strategy and vision for the future. The company is continuously launching special spaces in Korea and various overseas markets, enabling consumers to see, feel and experience LG’s unique CX for themselves.
To read the full Executive Corner piece and learn more about CX, visit lgnewsroom.com.