How Brands Can Remain Relevant In Today's Service Economy - Forbes

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With the rise of the service economy, many people are forgoing ownership and becoming increasingly reliant on services and intermediaries to get them from point A to point B (sometimes literally). Moreover, the servicification of brands is no longer exclusive to major cities. Having lived in the world of brand building for more than two decades, I have traveled extensively and interacted with brands at every level in myriad cultures and societies. I've observed that whether they're in haute cuisine or fashion, many smart brands today are thinking like service brands. As we enter what appears to be the golden age of service brands, what can we learn from brands that are doing it right?

1. Think Beyond The In-Store Experience

When customers used to enter a store, it was often the first time they experienced a brand's offerings. But today, brands are expanding beyond in-store offerings and providing customers with personalized experiences.

Best Buy is a brand I recently experienced this with. Upon the completion of a home remodeling project, I realized that my home needed to be smart. It wasn't just the countless products offered through Best Buy and its subsidiary Magnolia but also the services added on that brought Best Buy into my home to consult and implement a variety of technologies that many would never expect from a big-box retailer. Best Buy isn't your typical big-box retailer anymore. It has transformed itself from a product-driven business into a service-driven business.

Regardless of sector, the future of retail no longer seems to be restricted to sprawling showrooms. Instead, it lies in omnichannel experiences. Today, the concept of omnichannel retail is to combine various experiences across numerous touchpoints, enabling consumers to toggle seamlessly between a brand's physical and virtual stores. It's not about omnipresence — it's about knowing your customers and providing them with what they want, when and where they want it.

Consider sending customers personalized communications tailored to their distinctive shopping habits, for example. According to McKinsey & Company, "targeted communications that are relevant and useful can create lasting customer loyalty and drive revenue growth of 10 to 30%."

2. Embrace Emerging Technologies

As digital innovation continues to transform products, services and entire sectors, I believe brands must embrace emerging technologies to stay on the cutting edge. For example, chatbots and self-service options are a welcome change for consumers who prefer convenience and connection without having to interact with another human.

Starbucks, one of the leading brands that paved the way for the service economy, makes it incredibly simple to order your morning macchiato with technology. Using the Starbucks app, customers can place their orders using voice commands or chatbot-style messaging. Pizza Hut, another mainstay in the fast food and casual dining space, uses chatbot technology to allow pizza lovers to place orders through various social media platforms, such as Facebook Messenger and Twitter.

Whether you're peddling pizza or java or you're a digital behemoth like Amazon, a powerful digital platform is essential for brands operating in the mobile age. The key is guaranteeing your customers that their experience will be smooth, safe and invisible. Any flaws could drive users to competing apps, particularly as they become accustomed to lightning-fast payments and convenient mobile order-ahead offerings.

3. Consider The Rental Business Model

With time being a luxury, many people are willing to pay for exclusive access. That could take the form of no commercial breaks, overnight delivery or high-end apparel rental.

Clothing rental companies like Rent the Runway and Armarium are both in expansion mode, and brands like Rebecca Taylor and Vince have entered the market with their own subscription rental services. It has been estimated that in a decade, 10% of the $2 trillion fashion market will be rental.

Part of the lure of the rental model is that brands can quench the public's thirst for newness while decreasing the strain on resources. The United Nations Environment Programme reports that the fashion industry produces 10% of the world's carbon emissions and 20% of the global wastewater. The rental business model isn't limited to fashion brands, though. Other industries and business sectors can benefit from a circular economy model supported by innovative and sustainable materials, rental services and resale channels. Studies show that more than a third of millennials said they would shop for rental and reused items during the 2019 holiday season.

With everything from toothbrushes, clothing, scooters, cars, meal delivery and furniture assembly all available from service brands, we live in a fully consumption-based service economy. I believe that brands need to understand that this isn't a fad; it's a foundational shift in our society. Try to think like services and solutions companies. Digital and physical retail is only one node in a broader ecosystem that surrounds the consumer. Look for ways to surround your customers at every turn.

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December 26, 2019 at 06:00PM
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How Brands Can Remain Relevant In Today's Service Economy - Forbes
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