Variety

Bring home the experience

Harish Bhat | Updated on March 12, 2018

CT19HOME_THEATER

Why affluent consumers want in-home experiences, and not just products



Nespresso coffee brewing machines are a rage today, across several countries in Europe and America. Launched by Nestle, they offer consumers the experience of an ultimate coffee experience in the comfort of their own homes. You no longer have to go out to an exclusive café to drink a wonderful espresso, or lungo, or decaffeinato. Your Nespresso machine makes it for you, using a single-use capsule which contains the required coffee blend. You can choose from 16 Grand Crus coffee capsules which include Brazilian or Colombian or Indian blends, with distinctly individual characteristics and exotic aromatic notes ranging from cocoa to citrus to honey.

Consumers have lapped up this indulgent machine, which has virtually transformed the way coffee is drunk. Over 20 billion Nespresso capsules have been sold since 2000. The Nespresso business today generates annual sales of over Swiss Francs 3 billion, for its owners. Many other companies have followed in Nespresso's wake with their own coffee machines. Most recently, Starbucks, iconic for offering unsurpassed consumer experience in its cafés, has announced the launch of its own home coffee machine called Verismo, which promises to deliver lattes with fresh milk, just like in its stores.

So what has led to the brilliant success of Nespresso, within such a short period of time? The answer lies in an emerging consumer truth: that affluent consumers no longer want just products, they desire delightful experiences. Outside their homes, these experiences have always been offered to them by restaurants, cafes, shopping malls, multiplexes and luxury hotel rooms. But today, this is not enough. Consumers want to bring these experiences into the four walls of their own homes. Nespresso has helped them to do just this.

Closer home in India, consider two examples from very different product spaces. Sony and Samsung today market home theatre systems, which promise the theatre movie experience in your own drawing room. Blue Ray Home Theatres compete with DVD Home Theatres. Surround sound environments are created using sophisticated technology, including subwoofers and authentic vacuum tube amplifiers. Samsung calls its home theatre a truly immersive experience, and says that a night at home in front of this system can be just as fun as an expensive night out! Ordinary DVD players pale in comparison to these experiential systems.

Let us move from the drawing room to the bathroom. From being functional tiled spaces consigned to the back of the home, bathroom experiences have now evolved to the extraordinary. Kohler, for instance, offers bathrooms which look like pieces of art, and offer consumers a museum-like, elevated experience for their toiletry every day. There are Kohler artist editions of ensembles, lavatories and bidets. There are Marrakesh baths, which presumably bring alive the experience of bathing in quaint Moroccan courtyards. These include lavatory basins inspired by artworks found in Moroccan mosques. Then there are twirl under-counter basins influenced by handcrafted pottery. How much more refined can the daily bathroom experience get?

If you visit affluent homes in Indian cities, you will find these home theatre systems and exotic dreamy bathrooms competing with modular kitchens, barbeque grills and outdoor cookware. Mark the difference - these are not merely functional products such as toasters or grinders, they are creators of aspirational in-home experiences which consumers greatly desire today. What are the fundamental drivers of this big consumer trend? Here are some thoughts for marketers to ponder.

Extreme convenience

Why risk traffic jams, noise and crowds to go to a theatre when you can watch the same movie on a home theatre system, with equally dramatic visuals and sound, lounging with family on your own soft leather couch at home? Convenience is clearly a key driver of in-home experience seeking. As Indian cities expand and distances grow, as our roads get increasingly crowded and driving becomes a painful odyssey, as time becomes an even more scarce commodity in our lives, many more consumers will want to bring many more experiences home, where they can be accessed at a time of choice, at the touch of a button.

Exclusivity and Status

A designer bathroom experience offered to guests has strong connotations of status for the owner of the home. Such an experience shared with members of the family also has the trappings of exclusivity. So aspirational in-home experiences are about signalling to others, and also feeling good about oneself. The old advertising slogan “Neighbour’s envy, owner’s pride” sums this up quite well. As consumers go up the affluence ladder, this mindset and need is a natural driver of purchase, particularly amongst the nouveau riche. After all, if newly earned riches cannot buy status and a place amongst the elite, of what use is the money?

Privacy

Many consumers choose in-home experiences over equivalent public offerings because they value privacy very highly. This is one reason home gymnasium systems are becoming very popular, as are home theatre systems. There is a large and growing segment of wealthy consumers who seek their own private space far from the madding crowds. A private barbeque experience on your own lawn with friends is, for these people, a far more desirable evening than similar food at a pricey restaurant. In addition, privacy offers many more possibilities for customisation, thereby making the event far more interesting and unique. In some cases, such as home gymnasiums, private facilities offer perceptions of better hygiene than equipment shared with other people.

Cost

In-home experiences often offer a sustained cost advantage. Thrifty consumers, however wealthy they may be, feel very smart when they achieve such savings. This feeling may be the real payoff, rather than the monetary savings alone. The Nespresso coffee machine, for instance, enables consumers to make café-style espressos at a price which is much lower than the same beverage at a premium café. A home theatre system may enable a family to watch a movie at a far lower cost than an evening at a multiplex, where highly priced tickets, food and travel cost add many expensive layers to the bill.

Beyond functionality

Perhaps the most important reason why affluent consumers are buying all these systems is the craving for new and special experiences. These are people whose functional needs have already been satisfied, even satiated. Now, they seek new household toys which can awaken all their senses, and give them the feeling of living a rich and sensual life. They want to feel like connoisseurs, experts and emperors of their castles, all at once. Being surrounded by devices which are capable of providing them special in-home experiences is a good route to such sensual nirvana.

An important lesson for marketers

As the fundamental drivers are rooted in deep human truths, it is clear that affluent consumers will increasingly seek to bring home experiences which they have seen or been part of in the outside world. Therefore, experience marketing is no longer confined to out-of-home brands such as restaurants, malls or airlines. On the other hand, makers of all premium brands should consider themselves marketers of in-home experiences, and not just vendors of products. This extends to brands in all categories – whether it be bath products, coffees and teas, lighting or music systems. When we think of our brands in this fashion, it can lead to dramatically different product developments, pricing or even communication.

Harish Bhat is Managing Director and CEO, Tata Global Beverages Ltd. The views are personal.

Published on October 18, 2012

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