New behaviours, not new technology Consumer)) Slow Behaviour) RapidPredictable UnpredictableControllable Uncontrollable Technology)
What is driving these new behaviours?1 Consumers have unprecedented access to information about products, services and brands, which they share with Information peers. Asymmetry2 Newer technologies create more efﬁcient Word-of- Self-Esteem service paths, which has altered how Mouth consumers value their time. This in turn Self- has changed expectations of Actualisation interactions with service providers - customers want greater control over the service experience. Velocity Autonomy3 Societal norms are changing too, with individuals forced to become more In autonomous and self-reliant, and Control customers now achieve a sense of self- esteem through this new-found self- empowerment.
You have to lose control to gain itConsumers choose those channelsand interactions that get them to theirdesired solution in the quickest, mostefﬁcient manner.On the whole, consumers now expectmore timely and efﬁcient service fromservice providers.Importantly, consumers now expectan element of self-control andchoice in all service interactions.
Continuous value innovationCompeting effectively in online retailis not about technology...or price.The adoption of the digital channelshould be about giving yourcustomers control.Retailers that succeed in achievingcontinuous innovation aroundtechnology-enabled customerexperience - particularly self-service - will win.
Principle #1 - Social is about selling CONSUMERS’ ACTUAL REASONS BUSINESSES’ PERCEIVED REASONS why they interact with why consumers follow them companies via social sites via social sites (61%) DISCOUNT LEARN ABOUT NEW PRODUCTS (73%) (55%) PURCHASE GENERAL INFORMATION (71%) (53%) REVIEWS & PRODUCT RANKINGS SUBMIT OPINION ON CURRENT PRODUCT/SERVICES (69%) (53%) GENERAL INFORMATION EXCLUSIVE INFORMATION (68%) (52%) EXCLUSIVE INFORMATION REVIEWS & PRODUCT RANKINGS (67%) (51%) LEARN ABOUT NEW PRODUCTS FEEL CONNECTED (64%) (49%) SUBMIT OPINION ON CURRENT PRODUCT/SERVICES CUSTOMER SERVICE (63%) (37%) CUSTOMER SERVICE SUBMIT IDEAS FOR NEW PRODUCTS/SERVICES (63%) (34%) EVENT PARTICIPATION BE PART OF (33%) FEEL CONNECTED A COMMUNITY (61%) (30%) SUBMIT IDEAS FOR NEW EVENT PARTICIPATION (61%) PRODUCTS/SERVICES PURCHASE (60%) (22%) BE PART OF A COMMUNITY DISCOUNT (60%)Source: IBM Institute of Value Social CRM Study (2011). 1056 customers, 351 business executives.
Principle #1 - Social is about selling Consumers use social platforms for entirely selﬁsh reasons (as Facebook is learning). This doesn’t mean you should ignore them - they play a key role in the purchase journey, especially for information discovery. Taper your expectations, and design interactions to address consumer motivations - purchasing, special offers and peer reviews.
Principle #2 - Desire for engagement is fleeting Only 23% of consumers reported having (or wanting) a relationship with brands. 23% The desire for on-going engagement typically arises when possessing a product/ service activates a higher- 77% order need (e.g. status - iPhone, Harley Davidson etc.). Brand Relationship Oriented Not Brand Relationship OrientedSource: Corporate Executive Board Study (2012). 7000+ participants globally.
Principle #3 - The purchase funnel is changing FUNNELS SPINDLES TUNNELS 32% of purchases 31% of purchases 37% of purchases I’m open to I know I’m open to anything what I want anything I add more options I narrow things down I find it I change my mind three or four times I buy it I buy it I buy it The shape of the ‘purchase funnel’ is changing radically. New challenge is to simplify purchase choice for the ~2/3 of consumers who start the process brand agnostic. Source: Market Leadership Council Consumer Stickiness Survey (2012).
Principle #5 - Design to Inform Consumers exist in a constant state of “informed bewilderment”. We have more access to information than ever before, but struggle to convert it into knowledge and actionable insight (made only worse due to growing “appiﬁcation” of the web). Instead of simply adding to the tsunami of data, provide tools for managing data overload. Aggregate options and help consumers visualise them. Introduce “peer data” to help simplify choices.
Principle #6 - Design for habits Habits are formed to preserve energy, and when activated prevent the brain from fully participating in decision-making. To increase the success probability of a new digital service, design it to ﬁt an existing habit, rather than try to create new behaviour. Once a habit is formed (good or bad), it is hard to change them or form replacement ones. Source: The Power of Habit: Why we do what we do in life and business. Charles Duhigg (2012)
Principle #7 - Design for customer context Focussed Browsing Partial Attention (goal-oriented, (on the couch, (on the move, long-medium term) medium-short term) want-it-now)
Principle #8 - Design helpful interfaces, but don’t over do it People instinctively apply the rules of human social interaction to dealings with computers, mobiles, robots etc. Clippy broke every norm of acceptable behaviour. It promised to do things it couldn’t. It made the same mistakes over and over and pestered people who wanted to be left alone.
Principle #9 - Design seamless - unified - experiences EXPERIENCE SOCIAL Traditional approach is to design different experiences PERIENCE SOCIAL EX for different channels. Consumers are increasingly BUSINESS BUSINESS looking for a seamless LOCAL MOBILE experience across all channels, both to create aEXP CE ILE IE N LO comforting sense of ER NC L OB CA XP M ER IE E E consistency and as a demonstration of authenticity.
OFFLINEWITHER RETAIL STORES?WHAT ROLE DOES THE OFFLINE CHANNEL PLAY?
Offline remains a key component ‘Need it Experiencing Now’ the brandconvenience DiscoveryCommunity
The largest threat isn’t price competition The biggest threat for ofﬂine retailers is the growing prevalence of “browse not buy” behaviour. “Showrooming” - where customers go to a physical store to test-drive products then go online (web or mobile) to ﬁnd the cheapest supplier - is a growing threat. How do you ﬁght back?
Bring the best of the online world into the real world JC Penney’s ﬁndmore service launched in 120 stores across the US. In-store, 42 inch touch screens allow shoppers to view the retailer’s full online catalogue, check inventory levels in local stores, share products with friends and scan product bar codes to receive extra information and complementary product recommendations.
Bring the best of the online world into the real world Problem: In-store technology is often hard to use (multiple interfaces), in the wrong locations, and prone to breaking. Solution: Embrace Bring-Your-Own-Device!
Bring the best of the online world into the real world Westﬁeld Mobile app Shoppers can search and compare prices across retailers in their local Westﬁeld shopping mall, and call the local retailers to check availability with one click.
Bring the best of the online world into the real world Canon Mobile Tags Manufacturers are increasingly incorporating mobile tags (including QR codes) on packaging to allow consumers to access additional product information, reviews and product recommendations.
Bring the best of the online world into the real world Apple EasyPay App Allows customers to self- checkout accessory purchases in-store, by paying via an iPhone/ iPad app. Also launched Personal Pickup, which allows the customer to browse, choose and pay for an item via the app, then head to the store for priority collection.
MOBILESMART PHONES = SMART SHOPPERS?HOW DO MOBILE TECHNOLOGIES FIT IN?
Technology both extends and amputates “Every extension of mankind, especially technological extensions, has the effect of amputating or modifying some other extension" -Marshall McLuhan, Understanding Media: The Extension of Man
Technology both extends and amputates capabilities
Technology both extends and amputates McLuhan proposed the “tetrad” framework for assessing a technology’s impact: • What does the technology extend? • What does it make obsolete? • What is gained? • What does the technology reverse into if it is over- extended? -Marshall McLuhan, Laws of Media: The New Science
Technology as an extension of self nt me y He ari ug lit A ea ng R mory & Me ing Seein Think g Aw ng a i ch re n u es To s Sharing
Technology as an extension of self e nt He gm ity Au eal ari ng Hearing R Now: Currently capture and communicate voice, music mory & Me ing and other sounds. Seein Think Future: Expect greater g audio perception and speech-to-text. Explore audio/voice pattern recognition as a convenient alternative to barcode Aw ng scanning (e.g. Shazam, a i ch re n SonicNotify) u es To s Sharing
Technology as an extension of self e nt He gm ity ari Au eal ng Seeing R Now: Multiple cameras to create videos/pictures. mory & Me ing Seein Think Future: Expect improved g graphics manipulation, including 2D->3D translation for better product visualisation. Aw ng Also real-time image search a i ch re for information retrieval. n u es To s Sharing
Technology as an extension of self e nt He gm ity Au eal ari ng Touching R Now: Consumers very used to multi-touch interfaces. mory & Me ing Seein Future: Expect demand to Think use own mobile/tablet g screen to drive other in-store technologies. Also an increasing expectation of being able to Aw ng interact with storefronts a i ch re n using device “bump”. u es To s Sharing
Technology as an extension of self Sharing e nt He gm ity ari Now: Sharing an entrenched Au eal ng R behaviour, via text/SMS, Facebook etc. mory & Me ing Future: Expect demand for two- Seein way sharing with your brand in- Think store (e.g. favourite an item, have g it added to shopping wish-list on FB, with alert and discount). Also expect interest in device-to- device connectivity (e.g. mobile Aw ng loyalty ‘card’ talking to inventory a i ch re n system to show availability and u es To cash register to negotiate s Sharing discounts).
Technology as an extension of self e nt He gm ity Au eal ari ng Awareness R Now: Consumers still learning about orientation/proximity mory & Me ing sensors. Seein Think Future: Explore uses of g vibration alerts to give tactile reminders and guide shoppers (e.g. walk past a store for which they have a voucher or discount or an item on their Aw ng shopping list. (e.g. TW Shop- a i ch re n o-Map engine) u es To s Sharing
Technology as an extension of self Thinking & Memory e nt He gm ity ari Now: Consumers already Au eal ng R comfortable using mobile devices for ‘cognitive’ uses, blending apps/cloud (e.g. mory & Me ing shopping lists, product search). Seein Think Future: Expect consumers to g want to know all information relevant to them (not just price, availability etc, but ethical/ sustainable etc.). Aw ng They will want to store/own that a i ch re n data themselves, so it can be u es To accessed independently of your s Sharing store/site.
Technology as an extension of self e nt He gm ity ari Au eal ng Augmented Reality R Now: AR apps are still very much in their infancy, due to mory & Me ing Seein their niche usage (e.g. virtual Think tours). g Future: Expect your products to turn into a marketing channel, as consumers want to interact with them using Aw ng digital devices to explore a i ch re multi-dimensional information. n u es To s Sharing
Forget the web to make sense of mobile The mobile platform is yet to decide what it wants to become when it grows up. Like the web, it will evolve through several more stages, before it matures. We need to abandon “web thinking” to truly grasp its unique capabilities and opportunities.
Mobile first & responsive web design As a minimum, organisations should ensure their web site content is mobile optimised. Ideally, they should start adopting “responsive” web design approaches. • Fluid proportion-based grids • Flexible images • Priority logic for service/ content presentation
mSite or App? Data from the Top 5 US Retailers (for Web/App usage) - Amazon, Best Buy, eBay, Target and Walmart - show that mSites are still the dominant access point. Why? • No need to download App • Often no functional differentiation between App + mSite • Enables serendipitous interest Lessons? • Understand the purchase journey and your customer behaviours before investing in AppsSource: Nielsen (2012)
Take a portfolio approach Avoid making “big bets”. Think of mobile and social as “here today, gone tomorrow”, rather than as a traditional software application or technology project with a 5-10 ROI window. Don’t get distracted by product- as-a-company start-ups (e.g. Pinterest, Instagram, DrawSomething) - few are sustainable and have short life- cycles.
“Big Data” is not a technology Most retailers already have a sea of customer data - and it is growing rapidly: • Sales data & forecasts • Customer behaviour • Sentiment on social media Creating business and customer value starts with hypothesis-led data analysis to create actionable insight that is converted into customer- touchpoint action and experiences. Be open to a wholesale redesign of in-store and online processes.
“Big Data” is not a technology Descriptive Diagnostic What is Generate Predictive happening across each of hypotheses with Prescriptive respect to why Create your customer capabilities for touch points. the observed predicting what Establish behaviours are is likely to guidelines for (Observe) happening. happen for what you should (Orient) given scenarios. do about your predictions. (Decide) (Act) Iterative Enhancement A useful OODA-style framework for considering how to build out your business intelligence capabilities.
Focus on the “job”, not technology Understand the “job” that customers use your digital channel touch points and to achieve, without being distracted by technology issues Ask yourself: Are they “hiring” my site/ service/app to buy something, seek service or support, ask for help, or for distraction and entertainment? Understand this and you will have greater clarity around technology requirements.
Invest in products and services, not marketing In today’s environment, your product is your marketing. Invest the right time and effort to get a solid, well-targeted and value-creating product/service out the door. When marketing costs exceed product budgets, up is down, black is white.