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.