Tipping used to be an open-ended question. We decided the percentage and calculated the amount ourselves. Today, it has become a multipe-choice question. Pre-set options along with exact amounts are displayed on receipts or screens. This shift has changed how we feel about the act of tipping.
At Kabuto in Long Beach, the receipt offers three tipping options: 20%, 15%, or 10%, arranged from highest to lowest. It gave me a sense of flexibility, but the order and limited range pushed me toward choosing within a set range.
Lori’s Diner in San Francisco took a more assertive approach. The receipt included checkboxes for 18%, 20%, or 25%, and showed the final total for each selection. This removed the burden to calcuate, but made it harder to say no.
At Eel River Café at Garberville, the screen displayed four tipping buttons for 15%, 20%, 25%, and even 30%. Each amount was pre-calculated and shown clearly, creating a sense of obligation.
What once felt like a personal gesture of appreciation now feels more like a social obligation. As tip percentages rise and digital prompts become aggressive, the tipping experience shifts from a sincere expression of thanks to a manufactured sense of guilt.
The paper presents a model of the evolution of social norms. When a norm is costly to follow and people do not derive benefits from following it other than avoiding social disapproval, the norm erodes over time. Tip percentages, however, increased over the years, suggesting that people derive benefits from tipping including impressing others and improving their self-image as being generous and kind. The implications to the norm of not cooperating with new workers who accept lower wages are discussed; the model suggests that incumbent workers have reasons to follow this norm in addition to avoiding social disapproval.
However, fast service alone is not enough. Dutch Bros succeeds because of its superior customer experience. Unlike Starbucks, which can feel transactional, Dutch Bros creates a warm and personal experience. Their “broistas” (baristas) often remember customers’ names and favorite drinks, making visit feel like a conversation rather than a purchase. The company’s motto, “We may sell coffee, but we are in the relationship business,” reflects its focus on customer connections.
Dutch Bros understands what Gen Z wants, that is, a fast and friendly experience. Rather than focusing solely on coffee taste, it focuses on the experience of coffee buyers. Customer experience matters.
Understanding customer experience and the customer journey over time is critical for firms. Customers now interact with firms through myriad touch points in multiple channels and media, and customer experiences are more social in nature. These changes require firms to integrate multiple business functions, and even external partners, in creating and delivering positive customer experiences. In this article, the authors aim to develop a stronger understanding of customer experience and the customer journey in this era of increasingly complex customer behavior. To achieve this goal, they examine existing definitions and conceptualizations of customer experience as a construct and provide a historical perspective of the roots of customer experience within marketing. Next, they attempt to bring together what is currently known about customer experience, customer journeys, and customer experience management. Finally, they identify critical areas for future research on this important topic.
I recently visited Las Vegas to attend CES 2025. While many exhibitions were exciting, it was a gondola ride at the Venetian Hotel that kept me thinking afterward.
I was surprised to see people willingly pay premium prices for fabricated experiences. The ride costs $39 for a 10-minute journey along an indoor canal under a painted sky. A private gondola for two costs $156! Why would anyone pay so much for something artificial?
The answer probably lies in the power of social status. These fabricated experiences are designed to be visually stunning. They create shareable moments for platforms like Tiktok or Instagram. I saw many visitors took gondola selfies under the “Venetian sky.” Authenticity may matter less than the emotions people gain from the experience.
How do economies change? The entire history of economic progress can be recapitulated in the four-stage evolution of the birthday cake. As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $15, cost ten times as much as the packaged ingredients. Now, in the time-starved 1990s, parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to “outsource” the entire event to Chuck E. Cheese’s, the Discovery Zone, the Mining Company, or some other business that stages a memorable event for the kids—and often throws in the cake for free. Welcome to the emerging experience economy.
This paper investigates whether including authentic information on the back labels of wine bottles enhances consumers’ confidence and purchase intentions about wine; it also assesses the moderating role of involvement and knowledge about wine. We conducted two experimental studies. Study 1 generated three findings. First, when the back label had authentic information, subjects showed higher confidence levels. Second, this effect was hold for subjects with low levels of involvement. Finally, we did not observe this effect for subjects with high levels of involvement. Study 2 extended study 1’s findings and identified the moderated mediation effect of confidence. The findings highlight the important impact on wine choice of authentic information. However, the findings also suggest that authentic information may not be sufficient to attract people with high levels of involvement and knowledge. This study’s findings provide wine producers with practical marketing insights.
They presented six different fruits (lemon, apple, tangerine, pomegranate, pear, and orange) peeled, chopped, and neatly arranged in clean containers atop a bed of ice. Each container was paired with its whole fruit counterpart, visually comparing between the raw and prepared states of each fruit.
This creative presentation not only demonstrates the freshness of the fruits but also allows shoppers to imagine these fruits as part of their meals. It was shown that neatly organized and visually clear presentations increased consumers’ willingness to buy, at least, for some products.
Transparent packages are pervasive in food consumption environments. Yet prior research has not systematically examined whether and how transparent packaging affects food consumption. The authors propose that transparent packaging has two opposing effects on food consumption: it enhances food salience, which increases consumption (salience effect), and it facilitates consumption monitoring, which decreases consumption (monitoring effect). They argue that the net effect of transparent packaging on food consumption is moderated by food characteristics (e.g., unit size, appearance). For small, visually attractive foods, the monitoring effect is low, so the salience effect dominates, and people eat more from a transparent package than from an opaque package. For large foods, the monitoring effect dominates the salience effect, decreasing consumption. For vegetables, which are primarily consumed for their health benefits, consumption monitoring is not activated, so the salience effect dominates, which ironically decreases consumption. The authors’ findings suggest that marketers should offer small foods in transparent packages and large foods and vegetables in opaque packages to increase postpurchase consumption (and sales).
When I visited Eataly at Santana Row in San Jose to shop interesting Italian food items, I had a special experience. First, I was greeted by a big circular display of cured meats and cheeses (Salumi e Formaggi). The bright lights made the food look fresh.
Around this circle, I noticed more salumi and prosciutti hanging on the walls, with their origins detailed above.
As I walked further, I found sections for fresh fish (La Pescheria) and handmade bread (La Panetteria), both well-designed and full of options.
There was also a wine area where I could taste.
What impressed me most was the store’s deliberate use of design elements. Bright lighting made items look premium. Each food section had clear labels on the ceiling. The walls had different colors. Glass was used everywhere to make the store feel open and elegant. These details created a vibrant environment.
A high-arousal store environment, like Eataly, is ideal for customers seeking a recreational experience. This grocery store appeals to shoppers, like me, who enjoy exploring new products and are willing to pay more for the enhanced experience. Eataly is more than just selling fresh food; it creates a “wow” moment that encourages customers to perceive value beyond the product.
Addressing inconsistent results in the literature, the conceptual framework that the authors develop proposes that the consumer’s motivational orientation moderates the effect of the arousal produced by a store environment on the pleasantness of the environment. Two experiments support the framework. When consumers have a recreational motivational orientation, high arousal has a positive effect on pleasantness, but when consumers have a task-oriented motivational orientation, high arousal decreases pleasantness. In addition, high arousal increases consumer intentions to visit and make purchases in the store for recreationally oriented consumers, but it has a negative impact on shopping behavior for task-oriented consumers. Pleasantness mediates the effect of arousal on shopping behavior.
California is not bike-friendly and I decided to look for a used car. I found a car I liked on CarGurus.com and scheduled a test drive it. But just a day before my visit, I received a text saying the car had already been sold. It was frustrating.
Therefore, I decided to visit CarMax, the used car dealership many people recommend. I was not expecting much, but to my surprise, the experience turned out to be refreshing.
The first thing I noticed was clean, bright, and organized. It felt like an IKEA store. In particular, the lighting gave the whole place a welcoming vibe. It made me feel freshly excited, which is not something I associate with used car shopping.
Secondly, the way salesperson worked with me was unexpected. At Bank of America, the teller kept the screen to themselves while I sat behind it. At Carmax, however, the salesperson shared his screen with me. He and I went through the car’s history, the price breakdown, and all the details together. It felt like we were on the same team, not buyer and seller. Interestingly, he was not knowledgeable about cars, but that helped me feel less intimidating and more relaxed. Sharing the screen was a simple but powerful gesture.
Finally, the cars and the prices were the same as advertised. When I arrived at the parking lot, the cars I came to test drive were there, just as promised, with no need for negotiation. It reminded me of WYSIWYG (What You See Is What You Get).
CarMax might be slightly pricier than other dealerships, but I am willing to pay a premium for the peace of mind it brings. The bright store design, transparent sales process, and WYSIWYG style inventory transformed a frustrating car buying experience into something positive.
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Reference (bright store design for visitor experience)
Store atmospherics affect consumer behavior. This message has created a revolution in sensory marketing techniques, such that across virtually every product category, retailers and manufacturers seek to influence the consumer’s “sensory experience.” The key question is how should a company design its multisensory atmospherics in store to ensure that the return on its investment is worthwhile? This paper reviews the scientific evidence related to visual, auditory, tactile, olfactory, and gustatory aspects of the store environment and their influence on the consumer’s shopping behavior. The findings emphasize the need for further research to address how the multisensory retail environment shapes customer experience and shopping behavior.
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Reference (transparent sales process for user experience)
Purpose: Even as retailers add digital features to their physical stores and equip their service teams with digital devices, no research has addressed the implications of frontline employees (FLEs) sharing a screen side-by-side with customers as a contemporary service practice. This paper aims to identify the potential customer benefits of this service practice.
Design/methodology/approach: Noting the lack of theoretical considerations of screen-sharing in marketing, this paper adopts an interdisciplinary approach and combines learning theories with computer-supported collaborative learning topics to explore how screen-sharing service practices can lead to benefits or drawbacks.
Findings: The findings specify three main domains of perceived benefits and drawbacks (instrumental, social link, individual control) associated with using a screen-sharing service. These three dimensions in turn are associated with perceptions of accepted or unaccepted expertise status and relative competence.
Research limitations/implications: The interdisciplinary perspective applied to a complex new service interaction pattern produces a comprehensive framework that can be applied by services marketing literature.
Practical implications: This paper details tactics for developing appropriate training programmes for FLEs and sales teams. In omnichannel service environments, identifying and leveraging the key perceived benefits of screen-sharing can establish enviable competitive advantages for service teams.
Originality/value: By integrating findings of a qualitative research study with knowledge stemming from education sciences, this paper identifies some novel service postures (e.g. teacher, peer, facilitator) that can help maximise customer benefits.
Roten, Y. S., & Vanheems, R. (2024). The dimensions of phygital autonomy: losing some, gaining some. Journal of Marketing Management, 40(11-12), 996-1029.
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Reference – (WYSIWYG-style inventory for customer experience)
This article examines 40 years of research conducted in the area of Out-of-Stocks (OOS). Two research streams originating from the Progressive Grocer (1968) study are reviewed. The first stream dealt with demand side issues and analysed consumer responses to OOS. The other dealt with supply side issues and analysed the extent and root causes of OOS situations as well as how to improve OOS. Four paradoxes are derived from the review and are discussed: 1) OOS rates largely seem to fall into an average level at about 7 to 8% despite 40 years of research; 2) only sparse attempts have been made to integrate the two research streams; 3) there is an emphasis on minimizing OOS rather than relying on basic trade-offs as addressed by Economic-Order-Quantity theory to optimize OOS levels; and 4) despite clear evidence of the store as the major contributor to OOS situations, the store has largely remained a ‘black-box’ in OOS research. Finally, the study suggests that OOS research can integrate the notions of the two streams by showing how the conditions for consumer responses can be translated into different degrees for costs of understocking taken from Economic-Order-Quantity theory. This will have important implications for the management of OOS.
Stanford’s d.school workshop, Unleash Creativity, offers a unique hands-on approach to learning. During my visit, I could feel the creative energy, from the open second-floor view to the iconic d.school truck inside the building to the this year’s course schedule packed with hands-on activities.
Plate says: The Hasso Plattner Institute of Design at Stanford was established in 2005 to recognize an extraordinary gift from the Hasso Plattner Foundation to inspire teaching and research in design thinking and the creation of a home for the Institute. The Institute is dedicated to the spread of design thinking and the application of its principles to real-world problems. The design and renovations of this facility along with Hasso Plattner’s continued role in championing design thinking around the world were celebrated on May 7, 2010.
In Unleash Creativity, participants jumped straight into exercises without explanation. For instance, instead of talking about ideas, they started by drawing, connecting, and coloring dots. The interesting part is that they only learned why they did each activity afterward, as the instructor, Dustin Liu, explained the purpose and effect. This approach—learning by doing—really made them feel the power of creative expression.
One memorable activity had them listen to others share about someone they admire and then draw that person without talking. This helped them see deeper into one another’s perspectives. Through the carefully designed powerful exercises of listening, sharing, and drawing, they experienced the true power of empathy.
This article outlines the origin and evolution of one of the most influential design thinking perspectives in the Innovation Management discourse. This study addresses two significant criticisms of design thinking, namely, theoretical grounding and construct clarity. It also illustrates how this humanistic and creative design practice transcended into a comprehensive Innovation Management approach, facilitating entrepreneurship and innovation. Our research analyzes the evolution of the design philosophy and practices developed at Stanford University from 1957 to 2005 through document analysis. We identified design qualities that have been consistent over the decades, providing further construct clarity and insights on managing Design- driven Innovation. These design qualities elucidate design thinking as a cognitive process, creative practice, organizational routine, and design culture. They emphasize finding profound needs and problems and translate them into tangible designs, creating value for people. This design philosophy is deeply rooted in humanistic psychology theories, particularly on creativity and human values. Collaborations between psychologists, industrial researchers, and designers created this creative and human- centered design approach, known today as design thinking. This value- driven innovation offers a humanistic perspective on innovation theory and practice. It also offers an Innovation Management schema of design qualities essential for developing Design- driven Innovation capabilities in organizations and educational institutions. We emphasize that developing a creative design culture in which people have the human values, abilities, and confidence to collaboratively identify continuous emerging problems and needs and contribute through tangible designs generates an era of innovation and is essentially innovation management.
Practitioner Points
Design thinking as a step-by-step process with tools prevents fluency in thinking and flexibility in approach, which are essential in Design-driven Innovation.
An essential innovation management task is to develop a design culture and capabilities by freeing teams from emerging blocks imposed by the environment.
In organizations, Design-driven Innovation requires the development of micro-foundation, such as abilities and attitudes & values, and capabilities, such as creative routines and environments of support and psychological safety and freedom.
Innovation managers and educators need to consider essential design qualities when enabling people to design tangible solution for open and complex problems.
Recently, I visited the Google Visitor Experience at the Googlplex. I went in expecting something amazing—maybe the chance to try out new techonolgy like self driving cars (like Waymo), virtual reality glasses (like Ray-Ban Meta Glasses), or advanced AI assistants (like Open AI). High expectations felt natural—it is Silicon Valley and Google, the place for extraordinary experiences.
However, the reality was much simpler. The space named as “Google Visitor Experience” revolves around three main activities: browsing Google-branded merchandise in the store, enjoying a coffee at the café, and relaxing in a small public area called “Huddle.”
These activities felt quite ordinary, which was surprising. For me, and probably for many people in Asia, the word “experience” suggests something special—sophisticated and luxurious. But here at Google Visitor Experience, what I found was simplicity instead. This gap between what I expected and what I actually encountered made me think about the meaning of “experience.”
In consumer research, “experience” is hard to define and measure. Hoch (2002) points out that experiences is enticing but tricky to pin down, which often makes studying them less precise. My visit to the Google Visitor Experience reminded me that sometimes our expectations for an “experience” can be bigger than reality. This visit made me think more about how we define experiences.
Now may be the time to define “experience” through the lens of satisfaction research suggested by Oliver (2014). Customer satisfaction hinges on the gap between expectation and reality, and experience should be understood in the same way—by studying both the anticipated and actual experience. A key challenge here will be managing experience expectations, similar to how we approach expectation management for satisfaction.
Product experience seduces consumers into believing that they learn more than is actually so. There are several reasons for this. First, experience is more engaging than most attempts at education, both more vivid and intentional, and consequently more memorable. Second, experience is viewed as nonpartisan, devoid of the didacticism of formal education and the self-serving interests of advertisers. Third, much of experience is ambiguous, but not recognized as such. Experience supports a pseudodiagnosticity that draws the consumer in as a willing partner in the seduction. Finally, the endogeneity of tastes allows consumers to accommodate to chosen alternatives and results in infrequent regrets about being seduced.
An attempt to extend current thinking on postpurchase response to include attribute satisfaction and dissatisfaction as separate determinants not fully reflected in either cognitive (i.e., expectancy disconfirmation) or affective paradigms is presented. In separate studies of automobile satisfaction and satisfaction with course instruction, respondents provided the nature of emotional experience, disconfirmation perceptions, and separate attribute satisfaction and dissatisfaction judgments. Analysis confirmed the disconfirmation effect and the effects of separate dimensions of positive and negative affect and also suggested a multidimensional structure to the affect dimensions. Additionally, attribute satisfaction and dissatisfaction were significantly related to positive and negative affect, respectively, and to overall satisfaction. It is suggested that all dimensions tested are needed for a full accounting of postpurchase responses in usage.
During a recent visit to IDEO‘s San Francisco office, I learned how design thinking can be harnessed in B2B contexts and the transformative potential of generative AI. IDEO’s approach highlighted how design thinking is not limited to extreme end-users but extends meaningfully to B2B industries. By embracing this methodology, companies can reduce development timelines while serving the needs of various stakeholders.
IDEO’s collaboration with Ford highlights how design thinking can adapt quickly to address B2B challenges. Ford identified a gap in van driver security due to the long product development cycles. In response, IDEO designed a van security solution within just 12 weeks, quick prototyping to expedite development. This solution ultimately led to the creation of the joint venture between Ford and ADT, which integrated sensors, cameras, and AI to detect window breakage or unauthorized access.
One particularly inspiring session was learning about the integration of generative AI into design thinking processes. Generative AI, such as ChatGPT, has opened new avenues for, so called, “synthetic research.” Generative AI enables the creation of hypothetical personas that bring fresh insight into understanding potential customer needs. Additionally, by using video prototypes developed through AI, designers can iterate on ideas faster and more creatively than traditional methods allow.
This visit enlightened me about the transformative potential of merging emerging technologies like generative AI with established design thinking frameworks. By continuously pushing the boundaries of design thinking, IDEO opens new possibilities for the B2B sector, fostering faster, tailored solutions to meet evolving needs.
Tim Brown & Jaewoo Joo
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Reference
Brown, T. (2008). Design thinking. Harvard business review, 86(6), 84.
In the past, design has most often occurred fairly far downstream in the development process and has focused on making new products aesthetically attractive or enhancing brand perception through smart, evocative advertising. Today, as innovation’s terrain expands to encompass human-centered processes and services as well as products, companies are asking designers to create ideas rather than to simply dress them up.
Brown, the CEO and president of the innovation and design firm IDEO, is a leading proponent of design thinking—a method of meeting people’s needs and desires in a technologically feasible and strategically viable way. In this article he offers several intriguing examples of the discipline at work. One involves a collaboration between frontline employees from health care provider Kaiser Permanente and Brown’s firm to reengineer nursing-staff shift changes at four Kaiser hospitals. Close observation of actual shift changes, combined with brainstorming and rapid prototyping, produced new procedures and software that radically streamlined information exchange between shifts. The result was more time for nursing, better-informed patient care, and a happier nursing staff.
Another involves the Japanese bicycle components manufacturer Shimano, which worked with IDEO to learn why 90% of American adults don’t ride bikes. The interdisciplinary project team discovered that intimidating retail experiences, the complexity and cost of sophisticated bikes, and the danger of cycling on heavily trafficked roads had overshadowed people’s happy memories of childhood biking. So the team created a brand concept—“Coasting”—to describe a whole new category of biking and developed new in-store retailing strategies, a public relations campaign to identify safe places to cycle, and a reference design to inspire designers at the companies that went on to manufacture Coasting bikes.
I recently visited several In-N-Out burgers in Long Beach and San Carlos and found myself immersed in a nostalgic atmosphere. From the red and white decor to the lively staff, the ambiance felt like a step back in time.
One detail particularly stood out was that an employee stepped outside to greet drivers at the drive-through. This personal, nostalgic touch probably resonates with many customers.
Nostalgia can enhance consumer satisfaction, often outweighing price or product quality. In an era of fast-paced change, such genuine, authentic gestures can be more impactful than any menu update.
Most marketing and branding activities are essentially concerned with enchantment—the rendering of the ordinary into something special. To create enchantment, companies are increasingly marketing past-themed brands and products. Yet, there is little research about why and how such nostalgia marketing creates enchantment for consumers. Building on different modalities of nostalgia identified in sociological literature (reluctant nostalgia, progressive nostalgia, and playful nostalgia), we analyze the creation of enchantment through a longitudinal, qualitative, multi-method program of inquiry. We find three routes to enchantment grounded in different nostalgia modes: (1) re-instantiation (symbolic retrojection into a past), (2) re-enactment (reflexively informing the present with past-themed brands and practices), and (3) re-appropriation (ludic re-interpretation of the past). By unfolding the different ways in which marketers can press rewind to create enchantment, we discern important implications for theorizing and managing past-themed brands in terms of marketing strategy, targeting and positioning, brand experience design, and marketing communications.
