Shifting paradigms for fashion: from total to global to smart consumer experience

2.1 Total Consumer Experience (TCE)

Consumer experience is defined as a sensation that occurs within an individual when a business intentionally and successfully uses services as a stage and goods as props to connect at a physical, emotional, intellectual, and/or spiritual level (Pine and Gilmore, 1999). The product evolution from commodities to goods, services, and experiences is through transformation by memorable events or interactions where conventional utilitarian consumer-business transactions are translated into meaningful and value-added consumer benefits (Pine and Gilmore, 1999). In the retail industry, experience transformation is found in the trend toward “experiential retailing” where intangible, hedonic, and symbolic aspects of “shopper-tainment” and “retail-tainment” become key motivators of product purchases (Hirschman and Holbrook, 1982a; Kim et al., 2007; Oliver et al., 1997).

Consumers constantly have an experience, which originates from a set of interactions between a customer and a product, a company, or part of its organization, and when they purchase and use a product or service (Vehoef et al., 2009).The consumer experience centers the functionality of which emotional and sensory experience from all the smells, sounds, sights, tastes and textures of the goods or services are integrated with the environmental experience from a physical or virtual store (Berry et al., 2002). The consumer experience construct is holistic in nature and involves the customer’s cognitive, affective, emotional, social, and physical responses to the retailer (Vehoef et al., 2009). Thus the consumer experience is the sum of internal and subjective responses to any direct or indirect contact with a company (Meyer and Schwager, 2007; Vehoef et al., 2009). Direct contact generally occurs during activities of purchase, use, and service that are usually initiated by the customer. Indirect contact most often involves unplanned encounters with representations of a company’s products, service, or brand and takes the form of word-of mouth recommendations or criticisms, advertising, new reports, reviews, and so forth (Meyer and Schwager, 2007).

In fashion business perspective, the Total Consumer Experience (TCE) refers to strategic business logic that portrays creating superior consumer experience in conjunction with transactions with customers as a source of competitive advantage for a company. In fashion consumer standpoint, the TCE stands for a comprehensive experience generated through direct and indirect relationships between the customer and business that provides an engrossing environment for a consumer’s involvement and experience. Thus, TCE must balance both physical and emotional elements along all the stages of the customer experience and value chain (Mascarenhas et al., 2006). The resulting TCE has an internal or subjective component as well as an external or objective component related to distinct product offerings along all points of the production-consumption chain (Mascarenhas et al., 2006). TCE satisfies consumers’ emotional or expressive desires as well as their rational or functional needs (Kim et al., 2007). TCE features provisions for: (1) providers anticipating and fulfilling customer needs and wants better than competitors; (2) a maximization of the totality of the consumer experience; (3) a real emotional experience that offers meaning, value, entertainment, friendly and caring service, belongingness, brand community, and a memorable experience; (4) interactional experiences arising from the value-adding interfaces between customer involvement and producer participation; and (5) experiences as engaging memories. Much of experiential consumption research emphasizes emotions and contextual, symbolic and non-utilitarian aspects of consumption where value resides not in the object of consumption but in the experience of consumption (Berry and Carbone, 2007; Hirschman and Holbrook, 1982b). Refer to Figure 1.

2.2 Global Consumer Experience (GCE)

Prevailing and emerging market trends that include significant changes in demographic characteristics of global populations, convergence and divergence of consumer cultures, and information access through technology advancement, are leading consumers to demand optimal consumption experiences in exchange for investments of time, money and energy. The paradigm of TCE expands to the inclusive paradigm of the Global Consumer Experience (GCE) which describes global experience as the core purpose of transaction and provides a theoretical understanding of how businesses, consumers, and other market actors co-create value through their interaction with each other on a global scale. Thus, GCE extends experience that allows a borderless transaction which is free from spatial-temporal restrictions supported by advanced technology and an interaction with the consumption environment including a business, other consumers, cultures, ideologies, and technologies by sharing information and experience with them.

The GCE paradigm recognizes new intellectual inquiry that is grounded within a meso or macro level of theoretical orientation. From a modern positivist perspective, managerial relevance is explained in terms of a rational choice paradigm and its corresponding focus on purchase behavior in the micro level approach (Arnould and Thompson, 2005). From this perspective, many disciplinary theories have expanded into multidisciplinary frameworks for understanding knowledge (i.e., Consumer Social Learning Theory, Theory of Reasoned Action, and Theory of Planned Behavior) and they can be applied to understanding the consumer experience. While anecdotal evidence underscores many of the market trends previously mentioned, there is a need to develop macro level approaches that better inform research and practice regarding global consumer experiences.

Consumer culture theory (CCT) explores how consumers actively rework and transform symbolic meanings encoded in advertisements, brands, retail settings, or material goods to manifest their particular personal and social circumstances and to further their identity and lifestyle goals (Grayson and Martinec, 2004; Holt, 2002; Kozinets, 2001, 2002; Mick and Buhl, 1992; Peñaloza, 2000, 2001; Ritson and Elliott, 1999; Scott, 1994). Researchers have applied CCT to explain consumer behavior prior to globalization or IT advancement. CCT encourages investigation of contextual, symbolic, and experiential aspects of consumption as they unfold across a consumption cycle that includes acquisition, consumption, possession, and disposition processes as well as analysis of these phenomena from macro-, meso-, and micro-theoretical perspectives (Belk, 1988; Belk et al., 1988; Hirschman and Holbrook, 1982b; Holbrook, 1987; McCracken, 1986; Mick, 1986). While CCT has advanced consumer behavior knowledge by clarifying socio-cultural processes and structures related to the GCE paradigm, more diverse theories need to be applied to explain consumers behaviors and experiences in the context of globalization.

GCE is drawn from an amalgamation of fashion encounters influenced by the advances in technology on communication and the infusion of entertainment and media as major contributors to optimal experiences. GCE has distinctive features: (1) while TCE focuses on the relations between consumer and business, GCE broadens its viewpoint to interactions (or sharing) between consumer and environment including businesses, other consumers, cultures, ideologies, and technologies beyond spatial-temporal restrictions; (2) TCE aims at consumers’ memorable experiences with these relations, GCE, however, guides physical, emotional, intellectual, or spiritual transformations within a consumer (Pine and Gilmore, 2001); and (3) GCE revitalizes core analytic constructs of brand loyalty (Fournier, 1998; McAlexander et al., 2002; Muñiz and O'Guinn, 2000), consumer lifestyles (Holt, 1997; Thompson, 1996), retail experiences (Kozinets et al., 2004; Peñaloza, 2001), advertising information processing (Escalas and Stern, 2003), customer satisfaction (Fournier and Mick, 1999), and consumer involvement (Coulter et al., 2003). Refer to Figure 2.

2.3 Smart Consumer Experience (SCE)

Consumers who are empowered, networked and engaged in digital environments create, share, and demand a smart experience which capitalizes on their social structure, relationships, and knowledge. Smart consumers engage in digital environments not only for information seeking and sharing but also for receiving a sense of belongingness, finding connections and building social networks (Andrews, 2002; Zhang and Hiltz, 2003). Recently, social shopping was identified as a new model of e-commerce (Lee and Lee, 2012) based on this collaborative virtual consumption phenomenon. With an expanded number of social media sites and increased social-media adoption, global social commerce revenue is projected to be 20 billion U.S. dollars in 2014 and grow to 30 billion U.S. dollars by 2015 (Statista.com, 2014). Social commerce interface is enabled by smart technologies such as GPS, interactive tools, and in-store technology along with applications such as pinning, personalized searching apps, and mobile wallet. In 2013, the annual growth rate of subscribers compared to 2012 was estimated to be 44% for smartphones and 125% for tablets (ABI Research, 2013). The popularity of mobile devices based on geo-location technology is accelerating SoLoMo (Social-Local-Mobile) technology and application.

The SoLoMo platform advances the concept of Smart Consumer Experience (SCE) that suggests facilitating and enhancing value co-creation is the strategic capability central to a business competitive advantage. GCE and SCE are not considered in this study to present two end of single continuum. Instead we view them as two potentially orthogonal types of experience, which suggest consumer experiences are best conceived as offering some degree of both. GCE has an obvious different nature in terms of the transaction between consumer and business, while SCE does not always require transaction. However SCE emphasizes that intelligent consumers play diverse roles in the consumption environment as principle agents of transaction and interaction. In fact, smart consumers become culture creators, merchandise curators, product and service evaluators, brand advisors, brand fans as well as buyers by employing smart devices or software that are uniquely tailored for each consumer.

The concept of co-creating value stands for assisting consumers in co-constructing and engaging in superior experiences (Karpen et al., 2012). The managerial and theoretical concept of value co-creation is oriented to a service–dominant (hereafter S-D) logic (Vargo and Lusch, 2004, 2006, 2008) where the superior value co-creation and the focus on intangible resources and relationships are at the core of competitive advantage in a business. When consumers are viewed as an integral part of value creation, the role of business becomes that of a facilitator, supporter, and co-constructor of value rather than a supplier of value (Firat and Dholakia, 2006; Vargo and Lusch, 2008). The flexibility and fluidity inherent in the SoLoMo environment enables smart consumers to transfer resources from one channel to another. Facebook fans often transfer the trust established through their social relationships with the brand and other fans, and formulate a positive attitude toward the brand’s online website, where the actual transactions occur. In retailing, these social channel conversions and resource transfers develop a complex multi-channel platform. Recent reports of consumers’ increased multi-channel shopping suggest a new paradigm of integrated retailing has emerged. For example in a survey of consumer expectations regarding integrated shopping, 82 percent of respondents would shop again at a retailer who accepted in-store returns for online purchase, 73 percent were more likely to become a repeat customer if a store offered in-store pickup of online orders, and 59 percent indicated ease of website navigation was the most important factor for following through with an online purchase (http://www.webpronews.com/u-s-consumers-expect-integrated-retail-2012-05). In fact, consumers are changing their purchasing behaviors by integrating online shopping activities with visits to a retailer’s physical, brick and mortar storefront. This integrated shopping experience is referred to as omni-channel retailing (Lewis, 2014).

In order to understand consumer and business dynamics in SCE, specifically to determine how SCE is a transformative paradigm for the fashion industry, this study adopts the concept of Social Capital for a macro approach, and the concept of Digital Engagement for a micro approach. Social capital refers to “the features of social organization, such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit” (Putnam, 1995 p. 66). Due to its relational supremacy, social capital enhances professional practice and increases the capability for knowledge collection within a society (Wasko and Faraj, 2005). Social capital is studied in diverse business contexts such as the company environment (Gooderham et al., 2010), social networks (Valenzuela et al., 2009; Chang and Chuang, 2011), brand-based community (Muñiz and Schau, 2005), and individuals’ identities within a group (Bagozzi, 2000) to gauge the social and economic impact of social capital (Kim et al., 2014).

In the context of the SCE paradigm, social capital consists of three dimensions: (1) structural capital as a collective’s ability to examine individual action in a collective work; (2) cognitive capital as the resources providing shared meanings within a group; and (3) relational capital as identification within the group, trust in others, and commitment to participate in the collective and conform to the cooperative norms (Wasko and Faraj, 2005).

Smart consumers are engaged in digital environment not only for information seeking and sharing but also for a sense of belongingness, find connections and build social networks (Andrews 2002; Zhang and Hiltz 2003). These social interactions often refer to relationships of structural capital (Wellman et al., 1996), which are related to engagement ties (Wellman et al., 1996). The active and positive interaction among smart consumers within a social structure increases an individual’s satisfaction, which positively affects digital engagement in SCE (Kim et al., 2014; Langerak et al., 2004). Cognitive capital that discloses common interests between group members enhances individual information sharing with others (Wasko and Faraj, 2005). These common interests refer to “shared interests, goals, needs or practices”, indicating that shared language or shared knowledge has profound impacts on the future of a community (Chiu et al., 2006). When consumers spend time communicating in a private space, they are apt to engage more in a public space because they use embedded social network resources in order to gain returns in expressive actions (Blanchard and Horan, 1998). These intangible resources are capitalized as relational social capital, which is exhibited across the contexts of social networking, brand-based community, and individual identity within a group (Huang et al., 2013). Consumer community enables group members to increase personal cognitions of shared language and shared vision and to build relationships based on trust, reciprocity, and identification (Blanchard and Horan, 1998; Bock et al., 2005; Chiu et al., 2006; Dholakia et al., 2004).

In a micro-level approach to SCE, consumer engagement is the core of the SCE paradigm. Engagement involves a series of emotional and behavioral activities such as information processing, reasoning, decision-making, and problem-solving and evaluating (Kearsley and Shneiderman, 1998; Huang et al., 2013). Scholars emphasize the emotional aspects of engagement by employing a cognitive framework adapted from schema theory, while others highlight the affective commitment to an active relationship with brand (Mollen and Wilson, 2010) or the flow experience (Csikszentmihalyi, 1990, 1997). The behavioral aspect of engagement substantiates a consumer’s commitment in the social networking context in accordance with information seeking, information sharing and knowledge creating (Huang et al., 2013; Kearsley and Shneiderman, 1998). Consumer’s information seeking behavior is often depicted as browsing for information in a digital context (Sismeiro and Bucklin, 2004). Information seeking includes individual searching as well as interactive searching (Sismeiro and Bucklin, 2004) which often explains “third-party” information searching (Wang et al., 2002). While information seeking behavior indicates the significance of information quality (Williamson, 1998), sharing interactions presents a process of relationship management (Bock et al., 2005; Huang et al., 2013). The capacity to share interactions is one determinant of the ability to sustain a digital community, thus creating a sense of belonging (Burnett, 2000; Teo et al., 2003). At the same time, the sustainability of digital community mutually drives system usage (Teo et al., 2003), allowing participants to share information while facilitating access to information, expertise, and ideas (Wasko and Faraj, 2005). In digital engagement, not only do consumers interact with each other, but they also provide knowledge (Clarke, 2010). Since new marketing incentives provide consumers with autonomy to produce technical, social, and cultural knowledge (Zwick et al., 2008), knowledge creation plays a key role in users’ engagement in a digital environment.

SCE is characterized by three distinctive sets of actions. First, SCE concentrates on co-creating, sharing, and transforming value among consumers, businesses, and environments. For example, the structural capital in an interactive digital interface enables consumers to create any kind of information in Youtube (Ritzer and Jurgenson, 2010), and collaborative entries and knowledge in Wiki (Ritzer and Jurgenson, 2010) through storytelling, establishing authenticity, and developing personal connections (Aaker and Smith, 2010) through the digital web. Second, businesses pursue the seamless smart consumer experience through the integrated relational capital that offers limitless touch points and networks. For example, local stores can become showrooms for omni-channel shoppers who need to physically see and touch goods, return them, or have a face-to-face conversation with a store associate. Third, the cognitive capital through the combination of big data analytics and omni-channel distribution should be understood as multiple touch points in preemptively connecting with the consumer. This type of information is used for precision marketing, greater personalization, and heightened interactively with each customer in everything from cross-selling, upselling, and managing sales associates’ time and behavior, to planning assortments, pricing, layout, and presentation (Lewis, 2014). Refer to Figure 3.

3.1 Paradigm shift - fashion consumer

Fashion consumers in TCE pursued a compilation of the many aspects of consumer-business interactions, each aspect contributing to coverall satisfactions. They seek entertainment and emotional stimulation throughout the shopping process, not just through the act of purchasing goods. This translates into not only demands for money, time, and energy savings, but also for pleasure from the shopping experiences (Kim et al., 2007). Consumer efficiency encompasses both benefit and cost components, reaches beyond the boundaries of product and service foci, and engages both utilitarian and hedonic principles of consumer behavior. Fashion consumers increasingly view the shopping activity itself as consumption, which leads to an evaluation of the entire shopping activity. Moreover, they seek a holistic shopping experience that is obtained via the shopping environment, its atmosphere, and the entertainment it offers (Kim et al., 2007).

GCE consumers are well-defined consumer segments that exhibit similar demographic and socio-cultural characteristics; share similar needs, tastes, and lifestyles; converge across national borders (Douglas and Craig, 1997; Ramarapu et al., 1999); and are not limited in consumption activities by geographic location (Globerman et al., 2001). Fashion consumers use the power of technology to form distinctive consumer clusters which connect across local norms, values, and identities. While they may not always be characterized by the same tastes or values; cluster members participate in a shared conversation (Holt et al., 2004). For example, GCE consumers enjoy Pinterest, one of the largest social networking services in which users can create and manage theme-based image Pinboards such as fashion, home, arts and crafts, food, events, interests, and hobbies. They can share photos by “re-pinning” Pinboards with other users and following other users’ boards. Users also invite their friends to the Pinterest website which can be linked to a Facebook or Twitter profile so that Pinterest acts as a personalized media platform. Fashion retailers such as Gap, J. Crew, Ralph Lauren, Dillards and Nordstrom use Pinterest as an advertising platform to link their company to users with similar interests. Similarly, Polyvore is a social commerce website where users curate “sets” of products like fashion and home furnishing from a variety of online retailers and then share their creations with others. If consumers click on the products, they will get price and stock details and can directly access the site to make a purchase.

SCE consumers utilize smart devices or software that tailored to his or her specific consumer profile. Zite is a personalized intelligent magazine app for Android and iPad. It learns consumer’s interest and reading habits and analyzes millions of articles each day to bring the consumers optimal matches for magazines, newspapers, authors, blogs, and videos that are completely tailored to his or her unique set of interests (Zite.com, 2013). For example, SCE consumers also co-create values and identities which are evident among global sustainable consumers as they seek socially responsible fashion brands. SCE consumers discover fair trade stores based on their location with the Fair Trade Finder app that lets them find, add, tag and photograph fair trade certified products wherever they are (Fair Trade USA, 2011). Conversely, GCE consumers purchase socially conscious clothing from internet-based retailers such as Edun, Easy ethical fashion.com, Fashion-conscience.com, and Adili, all of which are concerned with fair-trade and environmental impact and offer re-cycled and re-used apparel, organic materials and minimal packaging.

3.2 Paradigm shift – fashion retail industry

The magnitude of growth in consumer’s digital engagement has had a tsunami effect on the fashion retail industry in the past decade. Conventional retailing is being inverted as consumers expect and create borderless shopping. From the growth of department stores in the 1960’s and 1970’s, to the 1980’s retail expansion into catalogs, and the 1990’s big box retail formats, the 21^st century has witnessed a new retail environment that shifted to value retailing. Fashion retailers who expanded their markets and extended their merchandise mix to broader and deeper product lines were able to move to the “Big Middle” (i.e., the marketspace in which the largest retailers compete in the long run) with e-commerce becoming the new frontier for innovation (Brown et al., 2005; Levy et al., 2005). These TCE transformational retail environments evolved to experiential retailing that subsequently led many retailers to recognize the need for shoppertainment, edutainment, and entertainment to create differentiation in their store environments and retail offerings (Kim et al., 2007).

While marketplace growth in the last half of the 20^th century was benchmarked by the extension of physical structures (e.g., building more shopping malls, retail stores, hotels, restaurants), the GCE marketplace is evolving into consumer-engaged marketspaces through global 24/7/365 digital access that links consumers to physical and virtual retail businesses. Worldwide e-commerce retail sales to consumers will grow to $1.86 trillion by 2016, and 40.4 percent of global consumers made at least one online purchase in 2013, with expectations this will grow to 45.1 percent by 2017 (Davis, 2013). In the U.S., a recent Pew Internet and American Life Project Report (Pew research center, 2013) indicates that 91 percent of all American adults are part of a wireless, mobile population that participates in digital activities away from home or work and that 63 percent of adult cell phone owners in the U. S. use their phones to go online. This trilogy of mobile, digital and online networks creates a marketspace where retailers can test global-scale paradigms to drive new goods, service, and experience delivery systems.

In SCE, smart technology is the dominant medium for information exchange and it is accelerating the paradigm shift. The necessity for multiple distribution platforms beyond the Internet, mobile devices, and the physical store, is to be able to achieve preemptive distribution. Omni-channel creates an innovative and seamless consumer experience where consumers can start their journey in one channel and complete it in another through a continuous stream of activity that presents no barriers. Consumers want both responsive and adaptive interactions with content delivered in a way that best suits them as individuals and their particular device (The Guardians, 2013). A fully implemented omni-channel strategy seamlessly offers integrated and interchangeable distribution platforms for searching, shopping, ordering, purchasing, pickup, delivery, and returns. To achieve this, all operational points in the entire value chain must be seamlessly integrated and ‘un-siloed’ (Lewis, 2014). Successful examples of seamless integrated operations include Bonobos (Brooks Brothers), Top Shop (Nordstrom), and Sephora (JCPenney).

U.K. retailer Marks & Spencer opened a new omni-channel store in Amsterdam as a clicks and bricks strategy. This e-boutique is a showplace with the world’s first virtual rail. The rail is created by three 46-inch video screens and three physical rails of clothing, with constant updates, that showcase the latest trends. Customers can place orders for free delivery to the store through in-store order points and style advisers who are equipped with iPads. Customers are offered the latest fashions in a store with a smaller footprint and the shopping experience is brought with mobile and online sites (FierceRetail, 2013). The situational evolution of fashion retail access bound by time and space to its ubiquitous access is demonstrated by iBeacon and Brouha. These location-based technology apps deliver real-time retailer messages to customers. As customers shop in the store, they receive a stream of details about shopping deals and events, products, and other helpful time-sensitive information directly to their devices (Morning News USA, 2013).

3.3 Paradigm shift – fashion business strategies

A convergence across national boundaries, prompted by global growth in income, travel, communication access, and entertainment, is reshaping consumer behavior through their exposure to diverse cultures and experiences. In TCE, market segments may be spatial when delineated by space boundaries, such as a shopping area, region or nation. In this form of “B2L2C(business to leader to consumer)” marketing (Nitto and Shiozaki, 2001), it is necessary to find relatively small groups and leaders who can influence group members and actively work with them in influence other group members. However, in the multi-attribute segmentation that is associated with GCE, access and information goes across segments. To optimize a multi-attribute segment group’s on-demand expectations, the business strategy must accommodate the multichannel consumers who are expecting more personal utility from their devices such as mobile interfaces with brand web sites, coupon receipt and redemptions, and transactions (Mooney and Rollins, 2008).

As more consumers share information and ideas about their fashion interest, the fashion business strategies of GCE and SCE need to be engaged in the digital environment. Digital engagement has even positioned global consumers to take over product and service branding through cyber-branding structures (Javed, 2009). Further, social media, driven by one-to-one sharing of information and goods and services evaluations, is surfacing as a new consumer-driven cyber marketing tool.

Digital engagement also brings the hybridization of the consumer’s role in the fashion retail industry. Hybridization offers a new GCE and SCE business model where companies source capital as well as develop products in cooperation with consumers. This approach is effective not only in reflecting consumer views and improving the quality of products developed, but also in enhancing the loyalty of consumers who participate in the development process (Nitto and Shiozaki, 2001). Topshop provided their customers with a special in-store and online experience through the campaign ‘Wish you were at Topshop’. In this campaign customers received a free styling and make-up session and were invited to create their own digital ‘Wish You Were at Topshop’ postcard by using Instagram, an online photo and video-sharing social networking service. Customers shared their photo with friends both on and offline and also entered a competition for a chance to win a £1,000 summer shopping spree. As a result, the number of blog postings, views on Facebook, and comments exceeded a year's worth of Topshop’s usual Facebook activity in just four days. Quirky, a crowd sourcing company uses interactions between the external online community and Quirky’s internal team to launch new products in the marketplace. Community members can submit ideas or vote on which products Quirky will manufacture and sell. While Quirky sources product design from consumers, ZAOZAO sources production capital from consumers. ZAOZAO is a social retailer based on a crowd funding platform that allows consumers to discover new fashion designs and support emerging designers (Zaozao.com, 2013). Consumers browse and pre-order designs within a limited time period. As soon as all pre-orders are completed, a funded designer can produce the designs and consumers receive unique and limited-edition items as a reward for their support.