The Great Big Lesson Retailers Can Learn From Museums

photo-1458302488426-c9fe676e00b0-970x550In a few months in Philadelphia, a new Warby Parker store will open in a space formerly occupied by the Le Bec-Fin. This restaurant, led by Chef Georges Perrier, was once widely considered one of the best in the world, but it famously refused to change with the times—and paid the price. With Warby Parker’s move into physical spaces, I’d argue the brand is doing the opposite.

Warby Parker is, of course, not the only player in the ongoing virtual-to-physical, clicks to bricks migration. Blue Nile, Bonobos, Birchbox, and even Amazon have joined in, leaving many in the industry puzzled. After all, online retailers typically use razor thin margins to compete on price. When they move into real stores, their overhead increases dramatically, but their prices have to remain the same. That makes it very hard to make money.

Needless to say, there have been plenty of attempts to explain this from a strictly business standpoint. Some point out that shipping is a huge cost for e-commerce companies, and they can recoup the money by processing returns on site. Others have tried to explain Amazon’s move into retail as a way of boosting sales, which seems doubtful given that it hasn’t opened many stores. And of course, when all else fails, branding can come to the rescue.

The problem with all of these explanations, however, is that they look at the physical stores as a discrete entity. The stores must either make money or provide some tangible value on their own—or they’re not useful. This misses the point. More likely, we’re seeing is the emergence of a holistic model, one in which companies look strategically at customer’s entire experience—and generate revenue only where it makes sense.

Interestingly enough, this is not a new idea. It happens to be a central feature of museum world (where I often work). Great museums tend to look at the entire scope of a person’s interaction with the institution to find ways to provide a great experience—and capture revenue too.

To do this, museum exhibit designers typically create something called an “experiential master plan.” The plan looks and functions a lot like a traditional customer journey map in marketing. It coordinates all of the customer touchpoints—online, offline, and event-based—to make sure that a visitor has a good and consistent experience of the museum’s content wherever they are. But unlike a traditional map, it also points out where and how the institution can generate revenue.

For example, you might think that a high admission price is a good strategy for a museum with great content, but it’s really not. High prices invariably depress attendance, which is a big factor in establishing the prestige of an institution. And big donors like to give to prestigious institutions. In addition, corporations often sponsor some portion of the experience—a movie or a show, for example—and generally want as many people to see it as possible. That’s why most institutions either have low or free admissions, to begin with, or offer inexpensive memberships. That way they can leverage the physical space, not for direct revenue, but to build an audience that is monetized in other ways.

The smarter online brands seem to do this as well. Warby Parker claims to be making money with its older stores, but how much is debatable. Others, like Blue Nile, don’t even have cash registers on site; to get a product, you have to order it online and have it shipped to you. In this way, the storefront is not used for sales but for speeding people on to sales, which makes a good deal of sense. If stores don’t need to sell, or sell directly, they can be designed for the best customer experience possible—one that balances the right amount of onsite revenue with total revenue.

If you’re not trying too hard to push product, physical spaces can have a lot of benefits. They are excellent for generating PR. They can focus customers’ attention in a world where digital distractions have largely depleted brand experiences. They can provide something we often call “resonance” in the museum world, where people connect with the architecture, music, and values of an institution. They can also provide a reason to share the experience with friends on social media. The less you’re hitting people with a sales pitch, the more you can focus on the rest.

Many brands (and most museums) should probably start considering this model. They all exist online and offline, but if they’re looking at the two separately, they’re probably missing opportunities somewhere.  With an experiential master plan, you can not merely see and coordinate your customers’ experience to the best effect, you can also find the optimal points to cash in. Just as with museums, you may not make that much money from people coming in your door, but the benefits can reverberate far and wide across the rest of your business.

This article was originally published on the SEGD blog: view it here