We all know that today’s consumer is more connected than ever before. But it’s still staggering when you think about it: This one, single device that we keep in our pockets can be used to review products, check prices, share purchases, request coupons – and sometimes even to purchase products from one retailer’s online channel while standing in a competitor’s store.
While mobile connectivity has empowered the consumer to shop in many different ways – it has also created opportunities for retailers. Namely, it opens the door for retailers to interact with customers more purposefully and to become more personalized in those interactions.
Seven characteristics of the modern consumer
- Around-the-clock-shopping. “There’s an expectation among today’s consumers that the ability to consume is a 24/7 thing,” says Eric Singleton, Chico’s Chief Information Officer. “When consumption can take place at any time of the day, retailers have to address the nuances and the requirements of different consumer needs throughout day.” According to Singleton, the Internet of Things will compound this issue in the coming years. “Our challenge as a businesses is to address those expectations on every conceivable platform.
- Consumers are in control. “Customers in today’s era are much more in control of their shopping experience, and they know they can dictate the shopping experience that they want,” Gayatri Patel, eBay’s Director of Global Data infrastructure. “They have the means to explore, research and share every purchase decision. And they can do it in a very quick way. If you lose them, it may not be just for that purchase. It may be for a long time. You have to be responsive to their needs immediately instead of trying to direct them. That balancing act is the biggest challenge.”
- Omnichannel shopping. “The biggest trend we see right now is this blurring of lines across channels,” says Sahal Laher, Brooks Brothers Executive Vice President and Chief Information Officer. “No matter where he is shopping, the consumer is the consumer. You have to break down those barriers between channels, empower the consumer in a uniform way and engage them in the same way on your site as you would in your store.”
- Content consumers. “Customers are branching out with this significantly broader ability to explore your products in the moment,” says Singleton. “They have closer relationships with what they’re buying and the reasons for buying it in their mind. Content has tremendous influence on how they’re behaving, so Chico’s is also looking at content to complement decisions in a more enriched way for customers, especially on social channels.”
- Global experience. “It’s a truly global economy,” says Laher. “We need to understand the customers’ needs wherever they are. Whether they’re in our NYC store or our Tokyo store, we need to arm associates with the tools that will make the customer interaction as meaningful as possible.”
- Collaborators. “There is a lot more collaboration and sharing of information that can influence consumer decisions compared to the offline experience,” says Patel. “eBay can complement those experiences with our retail partnerships.” Singleton agrees, saying “There’s definite use of devices to check out and share new products, to see if something complements your existing wardrobe or to validate what you saw on the Web.”
- Social sharers. “The relevance of social media on retail is untapped but growing very rapidly,” says Laher. “It goes beyond retail reviews of purchases. We are working with an outside partner to leverage social feedback before we even have products in the store. We can have various online groups give feedback on ideas and colors before investing time and money to create different colors and incur the costs of manufacturing and shipping, for example. That feedback mechanism didn’t exist before.”
Understanding the Customer’s Journey
The modern customer journey begins with self-evaluation, and this customer “self education” begins with social. It has been estimated that 57 percent of the buying process is complete before “sales” is contacted. Think about a consumer going into a retail store in the mall to purchase a phone. While the sales representative will try and push the consumer to purchase a particular product, the customer—before entering the store—has already done his or her homework. He or she has researched the brand on social, read product reviews, compared prices and more.
The flare-up around advertising blockers on mobile devices is just the latest salvo in the digital-technology “arms race” that has made today’s consumer a formidable force. From social media to mobile devices, technologies have given consumers unprecedented power to compare prices, complain loudly, and find the best deals.
This tipping of the balance of power in favor of consumers has been evident for years. In 2009, we declared that the traditional “funnel” model—in which consumers began with a set number of brands in mind and whittled them down until they decided what to buy—had been usurped by what we called “the consumer decision journey.”1 This journey involved shoppers taking advantage of technology to evaluate products and services more actively, adding and removing choices over time. And it included a feedback loop, where customers kept evaluating products and services after purchase, pressuring products to perform and brands to deliver a superior experience on an ongoing basis.
In the past few years, brands have been playing catch-up, investing in new technologies and capabilities in a bid to regain relevance with shoppers and exert greater influence over how they make purchasing decisions. Our experience advising more than 50 companies and researching more than 200 on best practices for building digital capabilities—coupled with detailed conversations with dozens of chief digital officers and more than 100 digital-business leaders worldwide—has convinced us that brands today can not only react to customers as they make purchasing decisions but also actively shape those decision journeys. A set of technologies is underpinning this change, allowing companies to design and continuously optimize decision journeys. More important, companies today can use journeys to deliver value to both the customer and the brand. Companies that do this well can radically compress the consideration and evaluation phases—and in some cases even eliminate them—during the purchase process and catapult a consumer right to the loyalty phase of the relationship (exhibit). The journey itself is becoming the defining source of competitive advantage.
We’ve found that a company’s ability to deliver that value relies on four distinct but interconnected capabilities:
- Automation streamlines journey steps. One example is letting people take a picture of a check and deposit it through the bank’s app rather than doing it in person. While automation of processes is highly technical, the focus is on enabling simple, useful, and increasingly engaging experiences.
- Proactive personalization uses information about a customer—either based on past interactions or collected from external sources—to instantaneously customize the experience. Remembering customer preferences is a basic example of this capability, but it extends to personalizing and optimizing the next steps in a customer’s journey, such as immediately putting a valued traveler on an upgrade list.
- Contextual interaction uses knowledge about where a customer is in a journey to deliver them to the next set of interactions, such as a retail site showing a customer the status of a recent order on the home page. Some hotels are experimenting with using their app to operate like a key when a customer gets to his or her room.
- Journey innovation extends the interaction to new sources of value, such as new services, for both the customer and the brand. Companies mine their data and insights about a customer to figure out what adjacent service her or she might appreciate. The best companies design journeys that enable open-ended testing to allow for constant prototyping of new services or features. This may include, for example, an airline’s app that has the ability to integrate with a taxi service so that travelers can book cars to pick them up when they arrive at their destination.
Activating customer journeys to capture value requires journeys to be treated like products that need to be actively managed, measured, and nurtured. How well companies are able to do that will dictate how successful they are in making customer journeys a competitive advantage.