strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Fall 2003 / Issue 32(originally published by Booz & Company)


The Economics of Aesthetics

During hard economic times, you would expect consumers to look for bargains and be less concerned with amenities — and companies to respond with low prices and plain products and services

So why is McDonald’s adding “premium salads” with a recommended price of $3.99 — $2.99 more than its standard side salad — and arugula in the lettuce mix and Newman’s Own dressing on the side? Why is Schlotzsky’s redecorating its sandwich shops, adding stone and exposed brick, warmer colors, and comfortable couches? Why is the scent of fresh-baked loaves drawing customers to Panera Bread restaurants, where sales are expected to top $1 billion this year? With fast-food joints offering bargains for a buck, why are diners turning to “fast casual” restaurants, where the typical tab runs $7 to $9?

These companies have discovered what Starbucks learned long ago. Nowadays, customers don’t want just fuel. They want pleasure — good food in an aesthetically appealing environment.

That’s why, faced with lagging sales, Schlotzsky’s invested in the look and feel of its stores. “We tried to elevate the experience to that of the quality of the food,” designer Santiago Crespo told Nation’s Restaurant News, adding, “It’s not just about the food. It’s about how you feel there.”

Competition and a slow economy may drive down prices, but it also raises expectations — not just for service, function, and reliability, but for sensory experience. “Look and feel” increasingly drives economic value. Businesses today face an aesthetic imperative. Style can no longer be an afterthought. It has become a critical source of product identity and economic value. The desire for interesting, enjoyable, and meaningful sensory experiences is everywhere.

Starbucks is to the age of aesthetics what McDonald’s was to the age of convenience or Ford was to the age of mass production. It’s the touchstone, the pioneer others seek to imitate.

“Every Starbucks store is carefully designed to enhance the quality of everything the customers see, touch, hear, smell, or taste,” writes Starbucks Chairman Howard Schultz in Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time (Hyperion, 1997). “All the sensory signals have to appeal to the same high standards. The artwork, the music, the aromas, the surfaces all have to send the same subliminal message as the flavor of the coffee: Everything here is best-of-class.”

For businesses, aesthetics is not a matter of esoteric art theory. It’s the way we communicate through the senses, the art of creating reactions without words. Aesthetics is the way we make the world around us special. Successful businesses understand that aesthetics is more pervasive than it used to be — not restricted to a social, economic, or artistic elite, or limited to only a few settings or industries, or designed to communicate only power, influence, and wealth.

Formerly bland malls try to emulate the sumptuousness of upscale hotel lobbies. Well-designed restaurants extend their attention to look and feel into their restrooms. As suburban tract homes routinely incorporate granite and marble (whose prices have dropped because of new supplies and fabricating equipment), hotels must follow suit.

Aesthetics is not just for places. Computers, for example, all used to look pretty much the same. Now they, too, can be special.

The drive for aesthetic value is creating opportunity throughout the supply chain. “Aesthetics, or styling, has become an accepted unique selling point,” says the head of GE Plastics’ global aesthetic program.

At the GE Plastics design center in Selkirk, N.Y., customers’ industrial designers and marketers brainstorm and develop new products, ranging from razors to car bumpers, inspired by new materials. Since 1995, GE Plastics has introduced 20 new visual effects. Its heavy-duty engineered thermoplastics can now emulate metal, stone, marble, or mother-of-pearl; they can diffuse light or change colors depending on the viewer’s perspective; they can be embedded with tiny, sparkling glass fragments.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.