By JOHN CLOUD
Synthetic
Authenticity.
Not long ago I found myself in a Hermitage, Tenn., supermarket studying a bottle of something called All-Purpose Bourbon-Chicken Grill-n-Dip. At the bottom of the label were the words AUTHENTIC FOOD COURT FLAVOR.
It seemed like a joke at first. A sauce surely can't be authentic if it tastes of a food court and not, say, of your mother's stove. But it wasn't a joke. Promoting products as "authentic" is serious business these days. You will notice the word and its variants being used to sell just about everything—Stoli vodka (whose new ad campaign urges you to "Choose Authenticity"), Kool cigarettes ("Be Authentic"), the now expired presidential campaign of Mike Huckabee (who called himself an "authentic conservative"), the website Highbrowfurniture.com ("Authenticity. Period."), the Claddagh Irish Pub chain (which claims to have an "authentic 'public house' environment," whatever that is) and the state of Maryland, where "even the fun is authentic."
Legendary business consultants James Gilmore and Joseph Pine II have written a book about what all these claims mean. In Authenticity (Harvard Business School Press), they argue that the virtualization of life (friends aren't friends unless you "confirm" them on Facebook; reporters are now all bloggers, and vice versa) has led to a deep consumer yearning for the authentic. America has "toxic levels of inauthenticity," Gilmore and Pine argue: most of the e-mail we get is fake. It's so difficult to reach a real person via an 800 number that we had to invent a heretofore unnecessary locution—real person—to describe the entity we are trying to reach. People live fake lives in Second Life. Corporate deceit reached epidemic levels after the dotcom bust. Depending on your politics, you might add that there were no WMD.
Gilmore and Pine run an Aurora, Ohio, consulting firm called Strategic Horizons that has an almost cultlike following in the business world because of their ability to accurately predict consumer sentiments. Nine years ago, in their first book, they argued that businesses had to start selling experiences—not mere products—in order to survive the new economy. The Experience Economy: Work Is Theatre & Every Business a Stage made the case that goods and services were being so thoroughly commoditized by Wal-Mart and the Internet that companies would fail unless they could create such diverting shopping experiences that customers would pay more for the same stuff they could buy for less elsewhere. The book helped explain the success of Starbucks, which sold not just coffee but an Italian coffeehouse experience. The Geek Squad was another example: the company thrived by staging computer repair as theater. Its repairmen arrive at your door literally in costume. The Experience Economy became a sensation in business circles.
Gilmore and Pine write as much about culture as about business, and their new book on authenticity has crystallized the interaction between self and commerce in the current era the way The Experience Economy did for the late 1990s. The aura of inauthenticity around some brands is killing them, Gilmore and Pine say. Just look at Sharper Image and all its shiny gewgaws—or Lillian Vernon, which sells tacky jewelry and fake "Forever-Fresh" daisies. Both companies filed for bankruptcy last month. "What [consumers] buy must reflect who they are and who they aspire to be in relation to how they perceive the world—with lightning-quick judgments of 'real' or 'fake' hanging in the balance," Gilmore and Pine write.
It seemed like a joke at first. A sauce surely can't be authentic if it tastes of a food court and not, say, of your mother's stove. But it wasn't a joke. Promoting products as "authentic" is serious business these days. You will notice the word and its variants being used to sell just about everything—Stoli vodka (whose new ad campaign urges you to "Choose Authenticity"), Kool cigarettes ("Be Authentic"), the now expired presidential campaign of Mike Huckabee (who called himself an "authentic conservative"), the website Highbrowfurniture.com ("Authenticity. Period."), the Claddagh Irish Pub chain (which claims to have an "authentic 'public house' environment," whatever that is) and the state of Maryland, where "even the fun is authentic."
Legendary business consultants James Gilmore and Joseph Pine II have written a book about what all these claims mean. In Authenticity (Harvard Business School Press), they argue that the virtualization of life (friends aren't friends unless you "confirm" them on Facebook; reporters are now all bloggers, and vice versa) has led to a deep consumer yearning for the authentic. America has "toxic levels of inauthenticity," Gilmore and Pine argue: most of the e-mail we get is fake. It's so difficult to reach a real person via an 800 number that we had to invent a heretofore unnecessary locution—real person—to describe the entity we are trying to reach. People live fake lives in Second Life. Corporate deceit reached epidemic levels after the dotcom bust. Depending on your politics, you might add that there were no WMD.
Gilmore and Pine run an Aurora, Ohio, consulting firm called Strategic Horizons that has an almost cultlike following in the business world because of their ability to accurately predict consumer sentiments. Nine years ago, in their first book, they argued that businesses had to start selling experiences—not mere products—in order to survive the new economy. The Experience Economy: Work Is Theatre & Every Business a Stage made the case that goods and services were being so thoroughly commoditized by Wal-Mart and the Internet that companies would fail unless they could create such diverting shopping experiences that customers would pay more for the same stuff they could buy for less elsewhere. The book helped explain the success of Starbucks, which sold not just coffee but an Italian coffeehouse experience. The Geek Squad was another example: the company thrived by staging computer repair as theater. Its repairmen arrive at your door literally in costume. The Experience Economy became a sensation in business circles.
Gilmore and Pine write as much about culture as about business, and their new book on authenticity has crystallized the interaction between self and commerce in the current era the way The Experience Economy did for the late 1990s. The aura of inauthenticity around some brands is killing them, Gilmore and Pine say. Just look at Sharper Image and all its shiny gewgaws—or Lillian Vernon, which sells tacky jewelry and fake "Forever-Fresh" daisies. Both companies filed for bankruptcy last month. "What [consumers] buy must reflect who they are and who they aspire to be in relation to how they perceive the world—with lightning-quick judgments of 'real' or 'fake' hanging in the balance," Gilmore and Pine write.
Behavioral Economics
Standard economic theory assumes that buyers are rational creatures who observe supply-and-demand laws. For centuries, this model worked pretty well to explain most economic activity. Two hundred years ago, agrarian Americans decided whether to buy a hoe mainly on the basis of whether it was available and affordable. But in the past 20 years, a school of behavioral economists has emerged to point out the obvious: consumers with higher living standards often make stupid, irrational decisions. We don't simply look at price and quality; we decide how we feel about a refrigerator or even a pair of socks before we buy.
Authenticity is a way of understanding this concept. Some see the iPhone as a silly pose; others find Apple products genuine because of their unique design and "Think Different" posture. Gilmore and Pine give a name to this ephemeral dimension of consumer behavior: in addition to the established dimensions of availability, price and quality, we are buying according to authenticity. If Gilmore and Pine are right, the dominant business polarity of the past decade—online vs. off-line—is irrelevant. The crucial factor dividing success from failure in the next few years will be whether a business is perceived as real or fake, authentic or inauthentic.
So how can companies deliver authenticity? What businesses will survive our jaded new form of capitalism? Gilmore and Pine offer two approaches. First, companies can strive to be transparent and exactly what they say they are. Chipotle Mexican Grill—"Food with Integrity"—goes for this approach, as does Honest Tea, the clothier Anthropologie, and Ethos water. These companies use the holier-than-thou strategy. Chipotle, for instance, serves meat only from animals that have never received antibiotics. But striving for complete authenticity can be dangerous. If tainted meat is found in a Chipotle outlet, the reaction could be something like what happened when JetBlue—which claimed to be the passenger-friendly airline—stranded travelers on runways for hours during a February 2007 snowstorm. JetBlue's stock price has fallen from about $12 a share to about $5 a share. Gilmore and Pine note that "being perceived and branded as authentic puts a bull's-eye on your back."
The best strategy for many companies is to openly fake it, to poke fun at their marketing excesses and admit their inauthenticity. A good example: last fall Verizon (a Gilmore-Pine client) "advertised" on 30 Rock with a product placement in which Alec Baldwin and Tina Fey extolled the virtues of Verizon phones; Fey then looked at the camera and said, "Can we have our money now?" Another example is Dave & Buster's, the restaurant-arcade chain. Dave & Buster's doesn't pretend to be a real arcade; it's a place where adults can drink a martini and play with little toy basketballs. And it's thriving.
For the average U.S. company, Gilmore and Pine have simple advice: think less about where to put ads—ubiquity is killing advertising's power—and more about how to shape the places customers interact with their products. Example: REI, the outdoor-gear company. In 1996 REI opened a flagship location in Seattle with a climbing wall and a walking trail. The climbing wall isn't some little display—in fact you have to pay to use it. The location also features a meeting space for local nonprofits. The store was more ambitious than any other the company had built, but it has become the city's No. 2 tourist attraction after Pike Place Market. Consumers bond with REI's goods in a way they never will with an ad. True, only 1.6 million people a year visit the REI store, but Gilmore and Pine reason that creating 1.6 million knowledgeable customers will be more lucrative than reaching 5 million with an ad campaign: "Stop saying what your offerings are through advertising and start creating places—permanent or temporary, physical or virtual—where people can experience what those offerings, as well as your enterprise, actually are."
Authenticity is a way of understanding this concept. Some see the iPhone as a silly pose; others find Apple products genuine because of their unique design and "Think Different" posture. Gilmore and Pine give a name to this ephemeral dimension of consumer behavior: in addition to the established dimensions of availability, price and quality, we are buying according to authenticity. If Gilmore and Pine are right, the dominant business polarity of the past decade—online vs. off-line—is irrelevant. The crucial factor dividing success from failure in the next few years will be whether a business is perceived as real or fake, authentic or inauthentic.
So how can companies deliver authenticity? What businesses will survive our jaded new form of capitalism? Gilmore and Pine offer two approaches. First, companies can strive to be transparent and exactly what they say they are. Chipotle Mexican Grill—"Food with Integrity"—goes for this approach, as does Honest Tea, the clothier Anthropologie, and Ethos water. These companies use the holier-than-thou strategy. Chipotle, for instance, serves meat only from animals that have never received antibiotics. But striving for complete authenticity can be dangerous. If tainted meat is found in a Chipotle outlet, the reaction could be something like what happened when JetBlue—which claimed to be the passenger-friendly airline—stranded travelers on runways for hours during a February 2007 snowstorm. JetBlue's stock price has fallen from about $12 a share to about $5 a share. Gilmore and Pine note that "being perceived and branded as authentic puts a bull's-eye on your back."
The best strategy for many companies is to openly fake it, to poke fun at their marketing excesses and admit their inauthenticity. A good example: last fall Verizon (a Gilmore-Pine client) "advertised" on 30 Rock with a product placement in which Alec Baldwin and Tina Fey extolled the virtues of Verizon phones; Fey then looked at the camera and said, "Can we have our money now?" Another example is Dave & Buster's, the restaurant-arcade chain. Dave & Buster's doesn't pretend to be a real arcade; it's a place where adults can drink a martini and play with little toy basketballs. And it's thriving.
For the average U.S. company, Gilmore and Pine have simple advice: think less about where to put ads—ubiquity is killing advertising's power—and more about how to shape the places customers interact with their products. Example: REI, the outdoor-gear company. In 1996 REI opened a flagship location in Seattle with a climbing wall and a walking trail. The climbing wall isn't some little display—in fact you have to pay to use it. The location also features a meeting space for local nonprofits. The store was more ambitious than any other the company had built, but it has become the city's No. 2 tourist attraction after Pike Place Market. Consumers bond with REI's goods in a way they never will with an ad. True, only 1.6 million people a year visit the REI store, but Gilmore and Pine reason that creating 1.6 million knowledgeable customers will be more lucrative than reaching 5 million with an ad campaign: "Stop saying what your offerings are through advertising and start creating places—permanent or temporary, physical or virtual—where people can experience what those offerings, as well as your enterprise, actually are."
Fake-RealBut
what if you sell screwdrivers or bug spray? It may not be possible to create a "place" that offers an "authentic experience" that anyone would want. ("Tighten screws all day!" "Tour the mosquito museum!") Actually, once I began to think like Gilmore and Pine, I found myself coming up with seemingly authentic experiences for even the most insipid products. Sell tools? Cover a huge wall with construction materials so customers can try the tools in the store. Bug spray? Try it on a roach. Little boys would love it. Gilmore and Pine understand that in an era when even Wal-Mart is selling organic mesclun and gourmet coffee, people want their purchases to elevate them, to transform them. They want products to connect them to history or to a cause (how many products are "green," "raw" or "eco"-something?). They don't want to cook, but they do want the package on the manufactured food product to say USDA ORGANIC. Does all this striving for authenticity make us more fake or more real? Gilmore and Pine offer a third option: "fake-real." Economic offerings don't have to be exactly what they say they are (Canyon Ranch isn't really a ranch; The Daily Show isn't really a news show), but they must be true to themselves (you actually can transform yourself at a spa; you actually can learn something from The Daily Show). Today you are authentic when you acknowledge just how fake you really are.
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