It is no surprise that today’s consumer culture is dominated, and even defined, by brands. Consumers use brands as a way to help define their own self-identity. Organizations use brands to outwardly define the culture they would like to propagate. Brands today has become such a critical asset in a company’s ability to compete – in some respects becoming the fifth “P” in marketing. Wherein product, price, promotion and placement have always been essential, a brand’s “promise” as to what it will deliver in terms of value or emotional fulfillment has become a way to acquire new and retain existing customers.
Yet, even this space of branding has become subject to the ever-changing and fickle nature of the consumer. Being afforded with more and more choice, consumers tend to be less loyal and exhibit behaviors of rapid adoption and hyper abandonment. As a result, brands are in a constant battle to keep themselves relevant. If retailers are unable to quickly refine and amplify what they say and how they speak, shoppers will be even more quickly lured away by competitors who appear more convenient, more present, more intuitive.
Retail has clearly been disrupted in recent years, but its evolution has been somewhat piecemeal and ad hoc, driven by both the increasingly empowered and discerning consumer, as well as the competition from nontraditional players. In this way, the retail industry has certainly adapted, but it hasn’t seen the true transformation that is required to get ahead of the game. The industry needs an overhaul in thinking and approach, one that puts retailers ahead of the curve, rather than behind it, and in front of consumers, rather than catching up with them.
The required transformation in retail isn’t just about improving channel integration or digitalizing physical locations. It instead needs to be a connected commerce reality where retail permeates any and all of the day-to-day touch-points of consumers, making browsing or buying a brand accessible in those daily life moments and not only when walking the mall or browsing the web. One where the outfit that catches your eye on TV is pushed to your phone with a promotion that is personalized to you, or perhaps the ingredients for the meal being prepared on the cooking show you’re watching are automatically added to your digital cart.
Luckily for the industry (and ultimately for the consumer), this technology already exists and the examples given above can actually happen. For the first time, retailers have the potential to lead the consumers toward a new retail reality, rather than the other way around. Today, we’re seeing the rise of cloud-based consumer engagement platforms that employ sensors, audio triggers, Bluetooth beacons, geo-fencing capabilities and other digital cues working within an Internet of Things framework, placing a digital overlay on the physical retail experience and extending an additional touchpoint at every turn of the consumer journey.
In fact, a study by Forrester found that today 53% of all retail transactions are driven by digital touchpoints, and it’s this growing trend that these new platforms are after. This constant influence and presence in front of a shopper allows retailers to craft a hyper-personalized experience that encourages loyalty, satisfaction and relevance, all through a gamified, enticing “X-marks-the-spot” approach.
Getting under the hood a little deeper, these new platforms use geo-fencing technology to create virtual zones around stores, restaurants, travel hubs and other venues. When a customer enters the parameters of the geo-fencing, targeted offers and advertisements can be seamlessly pushed onto their mobile devices and draw consumers into the intended commercial space.
Once inside, the customer is further eligible to receive tailored offers and recommendations, with the platforms guiding the entire purchase journey. Another integral feature of these platforms is the employment of audio triggers, through which a consumer has the ability to receive offers and enhanced content directly from a TV ad, show, or radio program. This type of customization is the gateway to a new generation of advertising, where it becomes an integrated and welcomed part of a consumer’s retail journey.
The cloud-based platforms offer an unprecedented information-gathering opportunity for merchants as well. Marketers often claim they lose half of their marketing spend, except they don’t know which half. That’s likely because there was never a feedback loop for marketers and the retailers they represent to truly measure and quantify the results of a campaign. With these new technologies, retailers can now directly tie a particular digital engagement to a result, and determine what kind of engagement works for each individual user. Because of this, they can reprogram and re-target based on what’s working, and filter out what is clearly not – on an extremely powerful, case-by-case basis.
The emergence of data-driven customer experience is just the beginning of the transformation our industry is experiencing today, as consumers begin to morph from users of the channels to being the channels themselves. It’s time for retailers to harness these new technologies and be relevant to consumer where it matters – in the future.
Arvin Jawa is Vice President of Retail Strategy at Diebold Nixdorf