NRF Big Ideas: Post Session Overview

It’s a Fight For Brand Loyalty!

Source: Forrester NSCTAS 2006 Benchmark Survey, North Amercian Technographics Benchmark Survey, Q2 2010

Source: Forrester NSCTAS 2006 Benchmark Survey, North Amercian Technographics Benchmark Survey, Q2 2010

We’re in a new age of competition for brand loyalty (the propensity to repurchase a brand). The battle for market share is fierce and according to Forrester over the past 4-5 years American’s brand loyalty has been declining. People no longer feel that owning the “best” brand is important. This is due in part to economic conditions but there is an even bigger culprit. Technology. Technology is one of the forces eroding loyalty.

According to JP Gownder, Rapid innovations in consumer technologies has caused this shift by provided consumers with new tools for comparing, evaluating, choosing and experiencing brands. Anyone selling products today have to deal with the likes of Google Products, ShopSavvy, Expedia or BizRate, who offer both product and channel comparisons, increasing the likelihood shoppers will find a new brand or a better deal to entice them away. There are lots of ways to find a deal. Deal of the day sites such as Groupon that make consumers feel like they are entitled to things at a huge discount. They like to haggle on price and share their stories and tips for how to win (sharing the secrets of inventory cycles at Target or ways to handle “hostile” cashiers who won’t give you a discount). They even share their coupons on swapping sites like Hot Coupons. Online coupons are 1% of the coupons issued but represent 10% of redemptions.

Studies have shown that armed with these technologies, customers are becoming increasingly brand agnostic. Statistical analysis shows the more technology-optimistic a consumer is, the less loyal she becomes.

Passion for a brand (think Nike, Apple) comes from wanting to be a part of what they represent, a sense of valuing the same things as others who buy the brand and the people running it. Successful companies like these use their goods and services as props for engaging people in their brand story, they focus on creating a meaningful connection.

I believe the key to winning the loyalty battle is to use technology to work for you rather than against you. Empower your customer with digital technologies that reinforce the value of your brand, rather than erode it. Design your experiences and services to deliver real value in a practical and meaningful way. For most organizations this will mean rethinking the customer and product experience to find ways to make this connection.

With a toolbox of technology capabilities like location-based services, sensors that monitor people or an environment, and smarter IP-enabled products there are even more ways to connect and serve customers. Organizations have a few exciting possibilities they can explore:

Think differently about the role of marketing and add conversion as a metric We tend to focus on marketing to attract. But with all the digital touch points available Marketing shouldn’t just be focused on using digital to generating leads. Explore beyond looking to get the attention of a customer when they are thinking about what to buy (Google, Facebook and Twitter are great at doing that).

  • Look for ways to make them feel a part of your brand. Right now most emotional engagement is still happening in traditional media (especially during the Superbowl). Create content that will pull people in or can be shared. Gucci does an interesting job in store of creating an emotional experience.
  • Connecting with customer’s and helping them with their goals will enable you to know when to take action. There are some existing examples like The Home Depot’s Kitchen Design tool that lets customers to pick potential designs for a kitchen renovation. They can save them to a project folder that can be accessed by a Designer.
  • Bringing together data from various sources to be able enable you to pick up signals that help anticipate customer needs over time. Banks have been paying attention to life events that will cause customers to refinance their home. Imagine what you will be able to do as the internet of things increases the amount of touch points.

Create an ecosystem by combining digital experiences with the physical products. Manufacturer’s are increasingly looking for how they can offer digital services. Digital Services are compelling because they usually involve the customer contributing data over time so the barrier to switching is greater, they generate new sources of revenue and enable your teams to learn more about what your customer’s want. There are great examples like Nike Fuel Band, iTunes I have covered before. It was about a year ago that I did this blog entry talking about the need to create VALUE. It’s becoming more and more important as core products become rapidly commoditized.

Think differently about customer service. Get your employees more connected across channels. Your people are the best at creating connections and driving loyalty. They need to be present online and offline and today they are “trapped” in a specific channel or location. Imagine a consumer electronics expert in a low-volume store being able to serve a customer in a different store through high-definition video, answering questions on Twitter or responding to a question on your website!

Find ways to turn this loyalty trend around to make technology a competitive advantage by deliver value to people.

“Real-Life” Digital Experiences are Emerging with IoE

We often think about digital and physical as two separate experiences, two separate channels, but to our customer they aren’t really separate any more. We’re moving in to a new age of the internet – first it was about collecting knowledge, then social connections and now with the Internet of Things its about physical space and connecting to objects.

This is providing lots of opportunity to re-think the use of digital within physical and get over the failed attempts which were usually because you did nothing more than deploy your website on a stick. Consumers have grown accustomed to the information and ease of connecting when online and would like to have access to information when they are vising you but in a way that enhances real-life. It’s time to leverage this next wave of digital to engage of more senses than those used clicking with a mouse.

Keep them in your brand experience by providing what they need: enable them to search for information, get them engaged through storytelling or deliver personalized recommendations and guidance. But do it in an entirely new way.

We can look at the digital opportunities across three areas Product, Place and Service with different experiences at different touch points.

Social Retailing Mirror enables you to ask your friends in real-time to get their opinion

Social Retailing Mirror enables you to ask your friends in real-time to get their opinion

PRODUCT:
Expanding beyond a focus of sourcing and merchandising selection to surrounding products with digital experiences. Different product categories require different types of solutions. They can be either subjective (requiring an opinion, being a reflection of taste or personal brand) like clothing or home design, objective (based on factual data) for electronics, home repairs or habitual (grocery).

Subjective product purchases need to be carefully considered since the customer’s style preference or personality is driving the decision-making. There are however some interesting examples where this is being done well.

  • Sephora Fragrance Finder is a personality quiz to match you with a fragrance. Read my blog entry Clever “Personalization” by Sephora.
  • The Social Retailing Mirror & Website we built for Nanette Lepore enables you to ask your friends what they think of your outfit while you are in the store trying it on. See the photos and read more here.
  • Cisco StyleMe solution which uses augmented reality to let’s you see what you look might look like in the outfit. See my blog entry “Cisco “StyleMe” for John Lewis
  • Gucci is selling watches and has a beautiful digital experience that tells the story of how they were made. See my blog entry “Gucci combines physical, mobile commerce via digital store-in=store”
  • We developed a Room Visualizer that will be announced soon that allows you to see products together in a room setting. In my early thinking about this (pictured here) I imagined something like this being executed in a “museum-like” setting that would naturally foster interaction and discussion as you are putting together your “masterpiece” of a room. It could also be used for large crowd presentations. Something you can’t do at home on your iPad.
  • Burberry opened a new flagship and the experience is supported with RFID that enables a number of experiential touch points that connect you emotionally to the brand
Life size renderings enable customers to imagine the possibilities in this room design concept

Life size renderings enable customers to imagine the possibilities in this room design concept

Objective product purchases are where the customer will look for specific features, facts, data or expert knowledge of how something works to see if it meets their needs. Usually associated with complex products or expensive decisions (electronics, cars, home mortgage) that are infrequent in nature and have significant differences among available choices. While there is an element of the subjective, these purchases require information readily available to help make the decision. Determine how to make it really simple to match the customer to the right product. In some cases it is best not to try to make this a digital solution but rather get the customer connected with the expert (see below under service)

  • They say you can narrow a wall of televisions to three options by asking two simple questions, how big a screen do you want and will you be watching sports?
  • Target in-aisle face cream finder enables you to enter information about your skin in order to match your needs to the correct skin care product
Concept of "touch" to talk to an expert for complex or high value areas

Concept of “touch” to talk to an expert for complex or high value areas

PEOPLE
Consumer interactions with associates is often cited as a key differentiator. They are the ones to answer the questions and cultivate the up sell and cross sell – which ultimately creates the satisfied customer. With more customers researching and shopping online the digital locations are largely unmanned. Labor is usually locked in the physical location and needs to be reoptimize across the channels. Our customer’s are looking shift to better orchestrate to serve the customers – through the endpoint and in the way they want to interact through Remote Expert Solutions

  • Landsend had a video conference with an expert
  • Banks want to make sure there is always an expert there for you if you make it to the branch. See this video of Cisco’s implementation with the Bank of Montreal. 
  • Anthropologie will connect you to a “personal” stylist to help you select the right outfit
  • Best Buy has a help force on Twitter ready to respond immediately to your questions or complaints.
P&G enables customers to talk to a live expert from their vending machine in the mall

P&G enables customers to talk to a live expert from their vending machine in the mall

PLACE
More and more commerce is happening outside your store. While the store is till the primary place of purchase it is not usually where customer’s research what to buy. Expand beyond the store as place for getting customer’s attention, erasing the walls to encompassing anywhere the customer is – provide places for your merchandising teams to meet them where they are…

  • Best Buy’s kiosks at airports are a huge success
  • P&G has a Beauty Bar pilot that is testing the impact of allowing shoppers to speak to a live expert through a kiosk. They give you advice on what to get and the order is dispensed from the machine
  • Shopping through window displays or by selecting items to be purchased on your phone is the next wave of exploration. I’ve put a few simple concepts below I think would be interesting for a retailer or manufacturer to explore – imagine the interaction being similar to this Adidas NEO interactive window powered with QR codes.

From an organizational perspective all the touch points need to looked at from the perspective of the overall experience strategy: digital content for Product Place and Service are all coordinated in pursuit of Customer Experience excellence. Once the experience strategy is determined, organizations will then need to define a logical step-by-step process for how execution and integration will happen.

This is focused on digital installations but WIFI is becoming increasingly important and any experience should be extended to to support customer and employee mobile devices.

Create end-caps or virtual windows anywhere, here you can see a display in a subway

Create end-caps or virtual windows anywhere, here you can see a concept for a display in a subway

Another subway concept, catch and engage customers with the ability to "try things on"

Another subway concept, catch and engage customers with the ability to “try things on”

 

Great Interview with PepsiCo Director of Foresight

ManojFenelon1Check out this interview with Manoj Fenelon of PepsiCo. He has a cool title and lots of interesting things to say. He and I agree that the future of business is about value being created – it’s about more than ownership of products, it’s about ideas and advocacy more than advertising and bottom line.

He covers a few interesting topics:

  • He puts forth a great analogy of “seeds & soil” – it’s not just about have the great ideas but the organizational capability and fortitude to nurture them to bring them to life
  • The strengths and weaknesses of systems and the power of the status quo
  • The lack of empathy in some corporate circles (read my entry on how to gain empathy)
  • The strength of the soul of a brand. Here is an insightful quote:

“As I say, there’s a growing realization that passion comes from a sense of being in the same movement as the people who are running the brand”

Beautiful Use of Augmented Reality by BMW