5 Experience Predictions for Retail in 2019
In the retail industry, one that’s known for its ability to continually reinvent itself and find new ways to connect with consumers, the huge shift in consumer behavior from physical...
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Some Disneyland fans haven’t felt their usual magic over the past month. To combat overcrowding, the theme park recently raised the prices of its annual passes — with the highest-tier pass now costing over $1000.
Predictably, many of the park’s fans are less than pleased.
Although Disney is hardly the first company to face blowback for responding to the laws of supply and demand, its decision to raise prices also touches on another economic concept — negative externalities. A negative externality occurs when a person takes an action that, while not malicious, has a side effect of making someone else’s experience worse. When I take my family to Disneyland, I make the lines slightly longer for everyone else. Likewise, other guests have the same impact on me.
Many other companies struggle with the negative externalities of customers on each other. In the retail world, events like Black Friday regularly wreak havoc on customers’ shopping experiences. Hospitality companies suffer similar consequences during seasonal rushes. For B2B companies, product quality issues or supply chain problems sometimes get serious enough that account teams don’t have time to support every client that asks for help.
Though there’s no perfect solution for overcrowding, companies do themselves and their customers a disservice if they treat externalities as simply a fact of life. With the right outlook, large numbers of customers offer opportunities to provide value in fresh, unexpected ways.
Put differently: how can you use a crowd to create positive experiences instead of negative ones?
Here are two strategies used by forward-thinking companies.
Turn it into a party
Some businesses host activities and events that make crowds feel desirable and exciting. Social situations like parties often feel more fun the more people present — a positive externality. Hosting such an event at stores or properties won’t alleviate the operational challenges caused by overcrowding, but it can make customers feel better about their overall experience with your company.
One Marriott hotel property in London modeled this approach by turning its roof into a trendy bar that won rave reviews from the local foodie community. Marriott also used the space to host culinary events and group workout sessions. Initiatives like this put a fresh spin on a crowd, making customers feel lucky to be included rather than squashed or ignored. They can also distinguish your company from competitors who are dealing with similarly large numbers of customers.
Turn customers into creators
The co-creation model offers another way for customers to create value for each other. Through this approach, customers collaborate with a company through activities like selling services, sharing advice, or giving reviews. AirBnb, TripAdvisor, and Apple’s developer network all use this approach — and research has found that companies like them tend to perform well financially, achieving higher revenue growth and profit margins than companies with different business models.
But your company doesn’t have to launch a new business model in order to benefit from co-creation. During periods of overcrowding, user groups and support forums moderated by experienced customers can connect dissatisfied customers to expert help and take some of the burden off busy employees. If your company takes an active role in supporting these communities and directing customers there during busy periods, they’ll make your customer experience feel more helpful and inclusive. Communities of expert users can also reveal homegrown workarounds and improvements that your company can roll out more broadly.
When done thoughtfully, these strategies are useful for more than just handling large crowds. They foster meaningful human interactions that might not have happened otherwise. Rather than just looking to minimize negatives during customer interactions, you are adding authentic, personalized experiences to your customers’ lives.