Issue No. 5: The Experience Imperative
Bloomberg & MEC News 2016 | Issue No. 5: The Experience Imperative
The Experience Imperative
Embracing A Consumer-Centric Mindset
Issue No. 5
Consumers in Control
A Rapidly Evolving Landscape
The changing way brands connect with consumers
The digital era is continuing to put consumers firmly in control of their experiences, offering them more choice in what, when and how they buy more than ever. This is creating a real imperative for brands to adopt a consumer-centric framework, particularly if they want that competitive edge.
Here we set the stage to help you better understand the how and why behind this shift.
The Crossroads of Culture, Data, Technology
With the rise of consumer confidence and the empowerment of the digital revolution, people are no longer passive recipients of brand messaging, but rather active members of the content community demanding authentic brand connections.
This shift has triggered a radical change in the way brands think about themselves - not just their products, but how they approach storytelling, technology, partnerships and company culture.
For example, Tracey Brown, Chief Member Officer of Sam's Club recently stated: "We talk about creating experiences that are inspired by culture, driven by data, and transformed by technology. Consumers are demanding a different kind of relationship. They thirst to deal with brands that have purpose."
Watch the Bloomberg interview with Sam's Club Chief Member Officer Tracey Brown.
Tracey Brown speaks at the Bloomberg Breakaway Summit. Photo: Michael Nagle/Bloomberg
"Consumers thirst to deal with brands that have purpose."
- Tracey Brown, Sam's Club
Personalization Allows Deeper Engagement
Now take this new effort from brands and add in the abundance of insights at our fingertips, and what do you get? A true opportunity to engage more deeply with audiences through customized messaging delivered at the right time and place.
"The core of the future is personalization," Katrina Lake, CEO of online personal shopping company Stitch Fix, believes. Speaking with Bloomberg's Emily Chang recently, she cited the more than 80 data scientists the company employs - half with PhDs - who help build consumer-centric products and experiences.
Number of data scientists employed by online personal shopping company Stitch Fix
Source: Bloomberg Television
This effort puts data - ranging from what works for different figure types to what an individual recipient is looking for most - at the finger tips of stylists, helping them confidently pick which clothes to put in the boxes they pack.
With this new promise for personalization, brands are now embarking on the road of test and learn, discovery and innovation. It's an exciting time, and even more so if you're one of the brands eager to pave the way.
Katrina Lake speaks on Bloomberg Television. Photo: David Paul Morris/Bloomberg
Watch the Bloomberg interview with Stitch Fix CEO Katrina Lake.
"The core of the future is personalization."
- Stitch Fix CEO Katrina Lake
Data & Technology
A New Ecosystem for Brands
On the leading edge
The future of brands lies in their ability to respond to this new consumer standard.
In order to deliver against this framework, the smart use of technology and its resulting data is vital to delivering more personalized experiences and messaging across the array of consumer touchpoints.
Herein lies the opportunity for marketers to connect more deeply with audiences.
Today, messaging apps present the biggest opportunity given their scale and the zeal with which consumers have embraced them. Brands are welcome in this environment where audiences are already primed for conversation - but they cannot barge in and they definitely should not lurk.
Opportunities for brands come in the form of sponsored content, branded tools or interactions; the focus is on contributing to dialogue versus making a statement. Read MEC's Spotlight On: Conversational Commerce for a deep dive into those opportunities.
Bloomberg reports that Alibaba's Taobao app has had success among Chinese consumers in creating messaging within interest-based communities on its mobile shopping platform. That demonstrates another way apps are now evolving - blending social media and shopping.
American audiences more typically find like-minded groups on messaging apps - but what if they could find them on Amazon?
"We use data to find a commonality of interest and create a community."
- Joseph Tsai, Alibaba Co-Founder & Vice Chairman, speaking with Bloomberg
Watch Bloomberg's report on Alibaba social shopping apps
Chatbots are the most promising aspect of conversational commerce. Bots can scan a database and return product details, advice or account information in seconds. The exchange will feel as natural and is likely to be more satisfying than talking to a person.
For brands, it opens up a new conduit for commerce accelerated by highly personalized, data-driven recommendations.
In 2016, Bloomberg reports, a variety of text-based services have sprung up, including Assist, which lets you book haircuts or order flowers via text or Facebook messenger, and Magic, an all-purpose butler/valet/personal shopper.
Established tech companies have been bitten by the chatbot bug, too. Facebook CEO Mark Zuckerberg has said he wanted to let his customers chat with artificially intelligent bots, and Microsoft, for its part, believes the world will soon move away from apps into a phase dominated by chatbots.
Where is your organization currently testing and learning?
- Messaging Apps
- Digital Assistants
- Virtual Reality
- Artificial Intelligence
- More than one of the above
Voice Assistants ("Hearables")
Voice assistants are becoming a common user experience layered in mobile, and will be integral to the Connected Home, Connected Car and other touchpoints in the Internet of Things (IoT).
It's a significant proving ground for consumer adoption - and competition is intensifying among the largest technology players.
Google introduced its digital assistant in September. It uses AI tools and lives inside the company's new Allo messaging app, as well as in the recently announced Google Home internet-connected speaker, new smartphones and devices such as cars and watches, according to Bloomberg. Apple is also entering the space.
Ahead of the holidays, Amazon has released a cheaper version of its digital assistant, the $50 Echo Dot, and has also released a stand-alone music streaming service. Both efforts help to drive membership in Amazon's Prime program.
"AI is a new gateway to the internet, to advertising, to e-commerce."
- Oren Etzioni, Allen Institute for AI, via Bloomberg
Blurring the real and digital worlds, virtual reality is changing the way we look at brand experience and the creative bar continues to rise.
Sony Corp.'s release of the PlayStation VR this month brings virtual reality to the cusp of mainstream adoption. As developers seek to create a killer VP app, they're also pioneering a new era of computing.
As games and apps develop, tools and software for consumers will develop concurrently. One French company is already developing a tool that could allow auto buyers to customize a car without visiting a showroom.
Standard software elements, for example, such as digital buttons, dials and rectangular menus, don't translate well into virtual reality. "If you want a volume slider, then put an actual speaker in the world with a physical slider that you can grab with your hand," said Andy Moore, chief executive officer of Radial Games, speaking with Bloomberg. Read more in MEC's Spotlight On: Virtual Reality, Augmented Reality and 360 Video.
The next wave of technologies transforming the consumer journey are powered by artifical intelligence and machine learning. Together, they couple the speed and vast knowledge of a machine with the familiar ease of human interaction.
Andy Rubin, the Google veteran who built Android into the world’s largest mobile operating system, is convinced that artificial intelligence is the next big thing.
Andy Rubin speaks at the Bloomberg Technology Conference. Photo: David Paul Morris
"New computing platforms happen every 10 to 12 years," he said at the Bloomberg Technology Conference. "What’s the next platform?... It’s about data and people training AI systems to learn."
Read more on Bloomberg.com
"What's the next platform? It's about data and people training AI systems to learn."
- Andy Rubin, Founder, Android Inc. and Playground Global, via Bloomberg
Living Your Brand Values
Becoming "customer obsessed"
Businesses that embrace the notion of being “customer obsessed” are those that focus strategy, energy and budget on processes that enhance knowledge of and engagement with customers.
To truly embrace that mentality, brands need to look beyond marketing or customer service. Customers’ needs and expectations must be understood throughout the organization, and used to fuel both responsive and proactive efforts.
Design Thinking Brings Customer Focus to Software Giants
Design thinking is a problem-solving approach used by designers for decades that boils down to knowing what your customers want. That's not a skill that comes naturally to the engineers who build software for big corporations. But in a world filled with user-friendly smartphone apps, clunky enterprise software is no longer tenable.
Photo: David Paul Morris/Bloomberg
So to shake up the status quo, IBM, Cognizant, Infosys and others have been racing to hire thousands of designers who once would have taken more specialized jobs—at an ad agency, say, or an industrial-design shop, Bloomberg reports.
In the past few years, IBM has recruited about 1,250 designers, built a global network of design studios, and is training employees (including engineers) to incorporate design thinking into almost everything they do. By the end of this year, the company says, about a third of the 377,000-strong workforce will have been retrained. The goal is to build a consumer-centric, startup-esque culture—and then persuade clients to do the same.
Read more on Bloomberg.com.
Retailer Target reboots by inviting Customers in
Target’s designers have been listening to kids, about 1,000 of them from the ages of 4 to 12—in their homes, online, at daylong fairs, and in focus groups—to create Cat & Jack, which they hope will become one of the country’s biggest kids’ clothing brands.
Kids have been involved in every aspect of building the new brand, with company teams incorporating the learnings into the line. When talking to the kids about social issues, for example, the kids talked about saving animals. Afterward, the designers went to an aquarium and a zoo; images such as a human with a lion’s head now pop up on the clothes.
Photo: Christopher Dilts/Bloomberg
Kids have also been involved in the Cat & Jack marketing campaign. Their photos appeared in ads and in stores, and when Target’s back-to-school promotion began in late July. Some of those ads and social media spots were even written and directed by kids.
Read more on Bloomberg.com.
Customer focus through the organization at Amazon
Famously customer obsessed, the notion of consumer-centricity is on the top of Amazon’s list of Leadership Principles and permeates the way they conduct business. Since 2010 Amazon has ranked first in customer satisfaction among internet retailers and fourth among all companies (American Customer Satisfaction Index).
When it comes to their consumers, Amazon's customer focus manifests in low prices, fast and reliable delivery, siding with the customer in disputes with third-party merchants, and even a good old-fashioned apology when it is warranted. On the business side, managers are required to spend two days taking calls at a call center and learn about customers’ needs and wants. Amazon is also very data driven, collecting details on every transaction within Amazon’s ever-expanding offerings.
The approach has paid off: A recent survey found that more than half of U.S. online consumers begin their product searches on Amazon's website or mobile app, Bloomberg reports. 55% of those surveyed go to Amazon first when searching for products, an increase from 44% a year earlier. The survey showed search engines, such as Google and Yahoo, were the starting point for 28% of those surveyed, declining from 34% a year earlier; specific retailers were the starting point for 16%, down from 21%.
Which approach to consumer-centric culture is most valuable?
- Internal communications focused on customers
- Inviting customers in to decision-making via focus groups
- Building customer-focused staffing/hiring practices
- All of the above
5 Things You Need to Know
Building effective dialogues
1. ALIGN. Marketers have been hyper-focused on finding solutions via digital and data-based products. Today’s success, though, hinges on truly embracing your consumer’s journey and being obsessed with bringing a consumer-centric model into your internal and external initiatives. It’s not just about ensuring your customers know that you’re customer obsessed; it has to be embraced wholeheartedly within your organization’s walls. Decide on that North Star that you align your KPIs around.
2. ITERATE. Maintain an iterative strategic mind-set. All aspects of the consumer journey are changing on a near-daily basis, be open to change and consider all possibilities.
3. INVEST. Develop an understanding of user experience and content that can extend over platforms and time frames. Smart brands are investing in platforms and apps that help them hone their approach.
4. DISRUPT. Talking the talk doesn’t cut it when it comes to being consumer obsessed. Embracing consumer centric behaviors requires senior leadership buy-in, and strategic investment across investments and efforts. Consider how you can disrupt your own business. What are the current obstacles your company must overcome to embrace consumers better?
5. COMMIT. True customer obsession is driven by the people within a company. No matter what technology you invest in, if the people behind it are not committed to being customer obsessed, it will not make a difference.
Where will your company invest most?
- Embracing bots and mobile for personalization
- Deriving actionable insights from big data sets
- Creating consumer-focused company culture