Transformation of businesses from physical items and properties to experiences is best explained through the concept of the core value unit. The core value unit refers to the element (product, service, information, content, social currency, etc.) that is being created or consumed. Traditionally, the core value unit of retailers has been their product. Everything they do to transfer this core value unit to their customers - supply, production, distribution, and marketing - consists of valueadding actions revolving around the product. In introducing digital economy’s core value unit, Chesky isn’t alone. Uber, Farfetch, One Fine Stay, Spring, or Hello Alfred don’t have any physical products to speak of. They are all in the business of removing friction in providing services and delivering experiences to their customers. These smart upstarts are gaining in relevance with the next generation of affluents as they redefine what the modern luxury is and how we enjoy it. At its best, luxury today is anticipatory, empathetic and non-obtrusive. It revolves around unique, individual experiences that spiritually and mentally enrich us and are enjoyed in private or with a few selected others. Modern luxury lifestyle revolves around wellness, mindfulness and environmental sustainability - and around those who can afford them. It is a perfect balance of the ancient Japanese concept of motenashi and contemporary consumers’ values of time, achievement, self-improvement and entrepreneurship.
At its best, luxury today is anticipatory, empathetic and non-obtrusive
Luxury today is firmly placed in the domain of seamlessness, convenience, utility, personalization and speed. This intrinsically links it to service and experience design. If service and experience are the lens of modern luxury, what are their implications for the mass brands? The answer is putting the consumer at the center. Smart brands today focus on creative ways to improve users’ quality of life and offer the most desirable, viable and feasible solutions to users needs in an invisible, intuitive, one-step-ahead-of-you manner. To succeed in this, brands need to be clear on what their core capability is, and how to translate it in a consistent, holistic and scale-building customer experience delivered through products, utility, content, and campaigns. This experience will then help users move through their decision journey by responding to their emotional, social and informational needs at every moment. Just like motenashi, being intuitive, effortless and flexible with users helps brands strategically guide their allocation and sequencing of marketing investments across touchpoints that are most desirable from the user’s point of view and that are critical in user’s decision-making process. Gross-level marketing investment is getting replaced by brands understanding and managing individual touchpoints. This micro-/human-centered and cost-effective focus on every brand interaction makes it valuable and beneficial to users in its own right, outside and beyond their product purchase. Users emotional satisfaction and brand affinity are a byproduct of the pleasure with the quality of experience and service they get. For example, Tesla, Warby Parker, Net-aPorter or Patagonia all wrap their physical products into attractive service offerings along the entire customer journey. This allows them to ensure superior end-to-end
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