Quirk's Blog

Making big data work for specialty retailers

Editor’s note: David Trice is co-founder and CEO of customer relationship management firm Engage.CX, Atlanta.

big dataToo much of a good thing can be a bad thing. Such is the explosion of data for specialty retailers at the start of 2016. From click-through rates and bounce rates, to conversions and marketing messages, to ROI and ROE, any retailer could drown in all of the information flooding in from sales channels. There are so many metrics to monitor that brand managers could get lost trying to make sense of all the numbers.

While data isn’t a bad thing, knowing which metrics to which to pay attention can be a make-or-break decision for specialty retailers. Paying attention to the wrong data could result in drawing the wrong conclusions or making the wrong strategic moves. Homing in on the right metrics can result in impressive growth in revenue and customer satisfaction.

The key to blocking out the noise and focusing on the metrics that matter most is to focus on the customer. Sounds pretty basic, right? But, it’s surprising how few companies prioritize data with this focus in mind.

Creating the customer life cycle

Focusing on the customer starts with understanding the customer life cycle, which represents the stages of engagement a customer experiences during his or her relationship with a retailer. Every time a customer touches a business, whether it’s by a mobile device, through a Web site visit, in a store or over the phone, that experience is a touchpoint in the customer life cycle. Tracking, measuring and understanding each of these touchpoints is the best way to begin the process of getting to know customers on a personal level by understanding their likes, dislikes, and preferences. By putting together customer life cycles on all customers, a retailer can not only put together an enriched profile of each customer but also create metrics to understand how well it’s doing in meeting the needs of all customers.

Moments that matter

For most specialty retailers, there are roughly 20 key moments that should be standardized, including:

  • a customer’s time browsing for a product;
  • social sharing;
  • a customer’s search efforts;
  • product research done by the customer;
  • adding something to a shopping cart;
  • live help from a company associate; and
  • a customer writing a review of the product or service.

 

These moments can happen anywhere and are channel agnostic. Organizing customer life cycles around a list like this provides a consistent framework for a retailer to use as it considers the customer’s path to purchase in a way that is not hindered by channel silos.

Measuring customer affinity

While constructing the customer life cycle, retailers must also use the opportunity to figure out how much the customer liked each and every experience with the company. Measuring customer affinity can include elements like how the customer viewed the relevance of each interaction; if the interaction made any sort of emotional impact on him or her; and if the customer was satisfied with the outcome of each event. By capturing and measuring customer affinity throughout the customer life cycle, retailers can see how their relationships with customers’ trend over time.

The customer value index

The creation of the customer life cycle allows for the establishment of an all-encompassing metric called the customer value index (CVi). The CVi measures the impact of customer experience on financial performance. It also unites a company around the goal of maximizing customer experience. The CVi is made up of the following elements:

  • Frequency: How often does a customer interact with the retailer? This value is calculated on the number of customer events versus how often and how regularly a customer engages with a retailer.
  • Sentiment: Does the customer like the retailer? If so, how much? This metric is determined by capturing the affinity of the customer on each event.
  • Purchase score: How valuable is the customer to the retailer? The purchase score illuminates the strength of the financial relationship with each customer.

 

The wonderful thing about the CVi is that it focuses retailers on improving customer experience, rather than the sales cycle, letting them see if the level of customer engagement influences purchases and if customer sentiment is a factor driving the frequency of engagements.

By putting the customer at the center of all business practices through the creation of the customer life cycle and CVi, retailers can create a set of metrics that truly illuminate how well they are doing with meeting the needs of customers. Instead of being drowned by data, retailers can be empowered by data and focus attention where it’s most required – on offering superior customer experiences.

Posted in Advertising Research, Big Data, Consumer Research, Retailing | Comment

Gen Z: the next consumer segment to cater to

Editor’s note: Phil Ahad is vice president at Toluna QuickSurveys, Washington, D.C.

Generation ZGeneration Selfie, or Millennials, has been the great obsession for many brands for nearly a decade now. But that is slowly changing as Gen Z (those born between the mid-1990s and 2009) are becoming the newest marketing meat.

Now that Gen Z is in their late teens and very early twenties, they both lean on their parents for financial support (52.24 percent are not employed and making money of their own) and support themselves (47.76 percent are employed and making money of their own). This duel dependent/independent status makes them influential with regard to family spending and household purchases, and as direct consumers.

Additionally, while Millennials are the most effected and weighed down by student loan debt, Generation Z isn’t quite there yet. Of those that have begun accumulating student loan debt (26.9 percent), 75.36 percent of them have not yet begun paying it off. This means extra money for purchases this age group tends to make: new shoes, cell phone cases … even hover boards.

So the buying influence and newly available cash flow makes Gen Z an untapped potential that can’t be ignored by brands.

So who is Gen Z? This fresh-faced group, commonly referred to as iGen or post-Millennials, doesn’t know life without social media and smart TVs. They – unlike their big Millennial siblings – don’t remember the great cell phone data package debate: to get a data package or not to get a data package (it really was a question!). They think, what the heck is a cell phone without internet access? Oh right, a HOME phone.

Technology is what drives this new generation. They are never offline. It just doesn’t exist. In fact, nearly 80 percent of Generation Z follows brands they like on social media. So when marketing to this cohort, campaigns that worked for Millennials need to be redesigned to be more technologically sophisticated and flashy.

Posted in Advertising Research, Consumer Research, Market Research Findings, Millennials | Comment

Advertising effectiveness: exposure vs. engagement

Editor’s note: Jeri Smith is president and CEO of Communicus Inc., a Tucson, Ariz., research firm.

engageAs advertisers struggle with the challenges of cross-platform advertising measurement, the focus for many is on how to quantify exposures across various media platforms. Nielsen and others are working feverishly to solve for metrics that address the need. These initiatives are another – albeit increasingly complex – step on the path that attempts to quantify the value of advertising, while ignoring the most important dimension of how advertising actually works.

Advertising doesn’t work because a marketer buys a lot of exposures, no matter how efficiently they are bought. Advertising mainly works when a creative concept manages to break through the cacophony of ad voices a consumer is exposed, and an exposure turns into an engagement. Exposures are just the price of entry. Clearly, there are more efficient and less efficient media buys, and a relevant unit of measure to assess the media buy is, in fact, the exposure opportunity. And for advertisers who strive to implement cross-platform media plans, the types of initiatives that will enable cross-platform measurement of exposures will be helpful. The exposure-level data that advertisers use today, and the new initiatives that will expand the depth of data available, are advantageous when it comes to building the most efficient media buy possible.

But this is where it ends. Advertisers who use exposures or opportunities to see as a means to assess the persuasive power of an ad or a campaign, are ignoring the most important piece of the puzzle; the creative execution. It is clear that what you run (the creative unit) provides far stronger leverage in terms of advertising ROI than where the ad runs (the media buy).

Sure, you can compare the outcomes in terms of brand KPI’s among those who were exposed to ads vs. those who weren’t. And, if the magnitude of the difference between the test and control groups is larger for Ad A than for Ad B, an assumption could be made that Ad A was more engaging and/or more persuasive. But which was better? The engagement or the persuasion? And why assume when you can measure?

We know that not all exposures result in an engagement. Sometimes the percent who are engaged will be boosted by the specific media environment (if an ad for a cooking utensil appears when the target is in a cooking frame of mind, or if it’s not buried in the middle of a too-long commercial pod). But, in fact, it’s the creative itself that is mostly predictive of whether an ad will engage. And an ad that doesn’t engage won’t persuade.

It’s vital that we continue to remind those who are increasingly focusing on exposures, and those who are using that metric as the primary means by which to assess advertising’s ability to perform, that there’s a huge gap between buying an exposure and earning an engagement.

Only by focusing on whether consumers actually engage with ads, can we provide the best possible feedback; solid insights on the power of a particular ad campaign; and how the executions in and across all media venues contribute. Imagine a campaign in which the media was bought to optimize exposure opportunities but the in-market results, based on the MMA or more granular exposure-driven models, were disappointing. If we could assess engagement, and determine that particular ads within the campaign are very persuasive but weak on engagement, the fix would be very different than if we learned that the ads do a good job of gaining engagement among those with exposure opportunities but were relatively unpersuasive.

A media buy that optimizes against exposure opportunities is a good idea. An ad campaign that is evaluated based on the extent to which its exposure opportunities translate into behavioral outcomes runs a serious chance of confusing efficiency (or lack thereof) with an above (or below) ability for a particular creative unit to engage.

Those who reside in the media world believe that once we can attain solid cross-platform exposure data, all that remains will be to optimize buys on this basis. However, this is just the beginning; measuring how consumers actually engage with, and are persuaded by ads that appear across platforms is where the real leverage for building better ROI resides.

Since every campaign is different creatively, the cross-platform effectiveness results will differ for every campaign. We’ll never be able to tell exactly how your next campaign will perform on the basis of numbers plugged into a media model, because the media models assume average performance within a given set of exposure opportunities and across media platforms. But if we use research approaches that measure, and help to explain consumer engagements with ads, we’ll be much closer to providing true insights that help advertisers optimize advertising effectiveness in today’s cross-platform campaign environment.

 

Posted in Advertising Research, Consumer Research, Market Research Best Practices | Comment

Have you finalized your marketing strategy for 2016?

Editor’s note: Molly Boyer is senior director of global communications at customer experience firm SDL, Denver. This is an edited version of a post that originally appeared here under the title, “3 must haves for every ‘modern marketing’ strategy.”

Plan for 2016It is a new year and, if you are like me, you have a renewed vision of what you are going to accomplish in 2016. With this I have been thinking a lot about marketing focus and execution and what that really means for organizations. For those of you who have already nailed down your budgets, contracted your advertising, put a few events on the calendar and kicked off a few campaigns, congratulations. You are way ahead of the game. But for those of you who are still planning or have not yet finalized your strategy for 2016, what will you focus on?

As the head of social for my company, I obviously put a lot of focus on social – how can we increase referral traffic, foster engagement, contribute to the funnel and get our employees to become our biggest advocates. But there are so many other pieces we have to bring together to create an effective marketing strategy. For this blog I picked out a few of my favorites and have focused on why you need to include them your plans (if you haven’t already!).

Customer experience

Customer experience, CX, CXM, CEM … regardless of what you call it, CX is alive and present. It lives in the e-mails we send out, the Web sites we build and the mobile apps we push. And we do this why? Because we want to ensure that what we are doing, without fail, is geared towards providing a better experience for our customers. OK, cool. But what does that REALLY mean?

I think it means integration. Integration across digital platforms (social, Web, mobile), customer service and in-person experiences (to name a few) to ensure that your customers experience with your brand is seamless from one stage to the next. I recently read an article on TopRankBlog, where Jeannine Rossignol, vice president, marketing for large enterprise operations at Xerox was quoted saying, “For 2016, integration and relevance are my key digital marketing priorities. Relevance is about unwavering focus on our clients and prospects all at stages of their buyers’ journey. Integration means to be where they are, engaging in digital conversations that lead them from one stage of their buyers’ journey to the next.”

So as you move through your strategy for 2016, continually ask yourself: “What programs am I putting in place that help drive the customer journey and how will they contribute to a positive (and financially successful) outcome?”

Digital programs

Digital – or should I really just say marketing programs? After all, digital marketing, is modern marketing. As technology evolves, so do consumers and so should marketing programs. Social, Web, mobile, ecommerce, etc. must be part of your strategy if you hope to connect with your consumers where they live. So think about all of the touchpoints you have with your customers – are you allowing them to build a journey that is personal to them? Or are you stuck in the marketing dark ages?

Social media and employee advocacy

A recent survey by Gartner, CMO Spend Survey 2015-2016: Digital Marketing Comes of Age, cited social media as leading the way for 2016 marketing spend – with nearly 65 percent of CMOs naming it as their main priority for the year. After all, social is a great way to build top-of-funnel (and middle and bottom …), build awareness and share content to a broad audience. But why do it all yourself? Your employees are your best advocates, have them lend a hand! By training your employees to do social and do it well, you cast a much wider net and are reaching so many more people than may follow you on Twitter or like your Facebook page. There are many great platforms out there to help you manage this and get your employees involved in sharing your content, but be sure to train them and offer them the assistance they need to be successful.

It is important to remember that no marketing strategy can be a one-size fits all approach. In order to enable your customers to take the journey they wish to take with your brand, you have to give them the keys to the right vehicle to drive their journey. So don’t place your focus on just a few marketing tactics. Look at how they all integrate, how they will encourage the customer experience and how your own employees can help get the message out.

Happy planning and here’s to successful marketing in 2016!

 

Posted in Advertising Research, Consumer Research, Innovation in Market Research, Market Research Findings, Market Research in the News | 1 Comment

Best ads of 2015: Purina’s Puppyhood

Editor’s note: Jane Brainbridge is editor at Impact Magazine and Research-live.com. This is an edited excerpt of a piece that originally appeared here under the title, “Purina’s Puppyhood ad most emotive in BrainJuicer’s ranking.

Research agency BrainJuicer has released its 2015 Global FeelMore50 annual list of the world’s best ads with Purina’s online-only video Puppyhood coming out on top.

The ranking is based on BrainJuicer’s ad testing methodology and tests more than 500 of the most acclaimed, viral and award-winning ads with a one- to five-star rating. The higher the rating, the more likely the ad is to create long-term business benefits.

Puppyhood is a gently humorous story of a man bonding with a puppy; it scored exceptionally high on happiness in BrainJuicer’s emotional metrics and the agency said it was the most emotional video it had ever tested for FeelMore50.

 

Posted in Advertising Research, Market Research Findings | Comment

In surveys (or during first dates): Are you asking leading questions?

Editor’s note: Talia Fein is project manager at research firm Chadwick Martin Bailey, Boston. This is an edited version of a post that originally appeared here under the title,” A data dominator’s guide to research design … and dating.”

I recently went on a first date with a musician. We spent the first hour or so talking about our careers: the types of music he plays, the bands he’s been in, how music led him to the job he has now and, of course, my unwavering passion for data. Later, when there was a pause in the conversation, he said, “So, do you like music?”

small talk during first dateUm … how was I supposed to answer that? There was clearly only one right answer (yes) unless I really didn’t want this to go anywhere. I told him that, and we had a nice laugh and then I used it as a teaching opportunity to explain one of my favorite market research concepts: leading questions.

According to Tull and Hawkins’ Marketing Research: Measurement and Method, a leading question is, “a question that suggests what the answer should be, or that reflects the researcher’s point of view.” Example: “Do you agree, as most people do, that TV advertising serves no useful purpose?”

In writing good survey questions, we need to give enough information for the respondent to fully answer the question but not too much information that we give away either our own opinions or the responses we expect to hear. This is especially important in opinion research and political polling when slight changes in word choice can create bias and impact the results. For example, in their 1937 poll, Gallup asked, “Would you vote for a woman for President if she were qualified in every other aspect?” This implies that simply being a woman is a disqualification for President. (Just so you know, 33 percent answered “yes.”) Gallup has since changed the wording to, “If your party nominated a generally well-qualified person for President who happened to be a woman, would you vote for that person?” – and the question is included in a series of questions in which “woman” is replaced with other descriptors, such as Catholic, Black, Muslim, gay, etc. Of course, times have changed, and we can’t know exactly how much of the bias was due to the leading nature of the question but 92 percent answered “yes” as recently as June 2015.

The ordering of questions is just as important as the words we choose in specific questions. John Martin (co-founder and chairman of Chadwick Martin Bailey, 1984-2014) taught us the importance – and danger – of sequential bias. In writing a good questionnaire, we’re not only spitting out a bunch of questions and receiving responses – we’re taking the respondent through a 15 (or 20 or 30) minute journey, trying to get his or her most unbiased, real, opinions and preferences. If we start a questionnaire by showing a list of brands and asking which ones are fun and exciting, and then ask unaided which brands respondents know of, we’re not going to get very good data. Just like if we ask a person whether he or she likes music after talking for an hour about the importance of music in our own lives, we might get skewed results.

One common rule when it comes to questionnaire ordering is to ask unaided questions before aided questions. Otherwise, the aided questions would remind respondents of possible options – and inflate their unaided answers. A couple more rules I like to keep in mind:

Start broad, then go narrow: talk about the category before the specific brand or product.

Remember that the respondent is in the middle of a busy day at work or has just put the kids to bed and has other things on his or her mind. The introductory sections of a questionnaire are as much about screening respondents and gathering data as they are about getting the respondent thinking about the category (rather than what to make for the kids’ lunch tomorrow).

Think about what you have already told the respondent: like a good date, the questionnaire should build.

In one of my recent projects, after determining awareness of a product, we measured concept awareness by showing a short description of the product to those who had said they were NOT aware of it and then asking them if they had heard of the concept. Later on in the questionnaire, we asked respondents what product features they were familiar with. For respondents who had seen the concept awareness question (i.e., those who hadn’t been fully aware), we removed the product features that had been mentioned in the description (of course, the respondent would know those).

When asking unaided awareness questions, think about how you’re defining the category.

“What Boston-based market research companies founded in 1984 come to mind?” might be a little too specific. A better way of wording this would simply be: “What market research companies come to mind?” Usually thinking about the client’s competitive set will help you figure out how to explain the category.

So, remember: in research, just as in dating, what we put out (good survey questions and positive vibes) influences what we get back.

 

Posted in Consumer Research, Market Research Best Practices, Market Research Techniques, Online Surveys and Research, Survey Development | Comment

What to expect from retail loyalty programs in 2016

Editor’s note: Bryan Pearson is president, LoyaltyOne at Alliance Data, Canada. This is an edited version of a post that originally featured in Forbes and also appeared here under the title, “9 things you don’t know about retail loyalty programs in 2016.”

loyalty An oft-used term in business, especially in fast-expanding industries, is, “You don’t know what you don’t know.” These days, in the loyalty marketing industry, there is much retailers are striving to know but boy is it work to keep up.

From stealth rewards programs to cloaked pricing to delayed regulations, the retail and loyalty environments are more fluid each month. I spoke with my friends at Precima, a strategy and analytics company, and other experts to learn what loyalty events are likely not known as 2016 gets under way.

1. Your best members can be much better: A supermarket’s most loyal customer typically spends only 50 to 70 percent of her monthly budget with that merchant, according individuals at Precima. If retailers directed more of their budgets to better satisfying these customers – rather than acquiring new customers – and used their loyalty data as a guiding light to specific preferences and needs, the company could recognize significant and attainable growth opportunities. Further, the dollars invested in existing customers deliver a healthier return on investment than those used to acquire new ones. “If a shopper has never been to a specific store, it is probably for a good reason, and a generic offer is not likely going to change her mind,” said Graeme McVie, vice president of business development at Precima.

2. Programs are shape-shifting: Some leading retailers not typically associated with loyalty programs, most notably Walmart, are introducing loyalty-like programs by stealth. Walmart’s Savings Catcher app does not issue cards or memberships but make no mistake – it is a loyalty program in all but name. First, the app enables Walmart to personally identify its customers in much the same way as a rewards program, and second, it provides Walmart with the data and mechanism (the app) to deliver personalized offers to its shoppers, improving its chances of earning their loyalty for features that extend beyond price.

3. Prices can be cloaked from competitors: Some leading retailers use their loyalty programs to send one-to-one special offers that are evident only to the targeted shoppers. These offers are increasingly sent via smartphone and often when the shopper is right in the aisle, in a better position to take advantage of the opportunity. These personalized promotions make the standard shelf price less important to loyal customers and make it difficult for competitors to match the price these shoppers receive.

4. Loyalty programs generate products: Retailers sell more than sweaters, bananas and electronics. The insights loyalty programs generate are of great value to their retail suppliers. Consumer data and other intangible assets (trademarks, copyrights) could be worth more than $8 trillion, according to a story in the Wall Street Journal. The Kroger Co., for example, was estimated to have sold $100 million worth of data in 2014 to Procter & Gamble Co., Nestlé and other suppliers, according to the report. In September 2014, members of the Financial Accounting Standards Board were advised to research intangible assets for the third time since 2002.

5. Odds of engagement are declining: On average, American households are enrolled in 29 loyalty programs, yet they are active in only 12. This 42 percent participation rate will continue to decline if retailers persist in presenting the predictable, one-dimensional model that rewards customers with points and discounts. This model, while the traditional format, does not maximize the ability of today’s loyalty strategies to identify and accommodate unmet but potentially life-altering needs. Walgreens’ Steps with Balance Rewards program and Sears’ FitStudio both recognize and reward members who increase their physical activities, acknowledging their desire to improve their health and lifestyles.

6. The best programs are not programs: The winners in loyalty will be those organizations that can think horizontally, meaning they see loyalty endeavors not as mere programs, but instead as strategies that serve the broader brand promise, according to Dennis Armbruster, vice president and managing partner at LoyaltyOne Consulting. Retailers that integrate loyalty data insights, investments and human resources across the organizations can transcend the boundaries and regimens of typical programs. This strategy is further supported when retailers carve out and reserve specific, high-value aspects of their loyalty initiatives (special events such as cooking classes or one-to-one fashion consultations) for those members who show a high likelihood to appreciate such features.

7. Data value is not hitting max: Retailers invest a reasonable amount of financial resources into their loyalty programs but they still don’t leverage that investment – particularly the data stake – across all areas of their businesses. Specifically, too few retailers are consistently incorporating insights from loyalty programs into prices, promotions and assortment decisions. As a result, too few are efficiently aligning merchandising decisions along customers’ needs. The upshot is these retailers are not maximizing and realizing each program’s potential return on investment.

8. Experience beats rewards: Loyalty programs do not guarantee loyalty when they do nothing to improve the customer experience. Rewards and loyalty strategies should be viewed as means to an end, with the end being a superior experience that is informed by data and designed to address individual shopper needs to the best of the company’s ability. The Nordstrom Rewards program, for example, allows members early access to its highly anticipated anniversary sales. And Caribou Coffee’s Perks program strives to delight members by presenting random surprises at checkout. The message bears repeating: Loyalty programs and the data they generate are often marginalized and not fully leveraged to accomplish these attainable goals.

9. Rewards data regulation is now two years away: Topic 606, the Financial Accounting Standards Board’s method for accounting for contracts that generate revenue from customers – including rewards programs – has been delayed by one year. The revenue recognition standard will now take effect among public companies in December 2017. That gives retailers 12 more months to prepare and devise currency strategies that factor in the planned policy. We may not know what form these regulations will take when they finally come into effect, but we can keep tabs. The less we do not know, the better.

Posted in Advertising Research, Consumer Research, Customer Satisfaction, Data Processing, Retailing, Shopper Insights | Comment

What’s in store for retail in 2016?

Editor’s note: Nikki Baird is managing partner at Retail Systems Research, Denver. This is an edited version of a post that originally appeared here under the title, “2016: The year of…”

So apparently I have a thing I do. I didn’t do it consciously but I guess I have done it regularly: to declare the theme of the year in retail. I went back and looked at all of the articles I’ve written, and this trend started in 2009, when I declared it the year of the customer. Here are the rest of the years. You can decide for yourself if I was right or wrong:

  • 2010: The year of transparency.
  • 2011: An off year.
  • 2012: The year of disruption, globalization and opportunity.
  • 2013: The year of measured retail.
  • 2014: An indirect declaration for the year of execution.
  • 2015: The year of brand integrity

You can probably argue that most of these trends didn’t come or go within one convenient calendar year. We’re all still feeling the impact of transparency – and as China’s markets have proved – globalization. Brand integrity is just as important this year as it was last year.

So what’s in store for 2016?

The year of disruption

I think 2016 will be an unsettled year in retail. The trends are already in play but there are several that are starting to come together that I think will have a big impact on retail this year. Here are those very disruptive trends:

Mobile is for real.

movile shopping The 2015 holiday season saw some over-the-top numbers for mobile use. If nothing else, this should prove that mobile has arrived – that it is a separate beast from e-commerce in many ways and that retailers need strategies for how to support the mobile shopper.

Retailers have learned a lot about mobile use from consumers over the last several years, the last year in particular. Mobile conversion is much lower than online, for example, and consumers operate within a different context than using the desktop site, seeing as they could be in a car, in a coffee shop or by a shelf in your store. Location plays a much more critical role in understanding the mobile consumer than it ever did for traditional e-commerce.

That’s part of the reason why I think mobile will be disruptive in 2016. Retailers spent 2015 experimenting with beacons and location-based marketing and promotions. 2016 is the year where the volume of that activity will be big enough for most consumers to notice. And as a result, I think 2016 is the year the mobile app will make a comeback – not as an alternative to the mobile Web site but as the digital loyalty card, wallet, shopping list, wish list and persistent shopping cart for engaged consumers. But it’s still going to be a rough ride – retailers just don’t seem to know how to provide a mobile experience that enhances the in-store one. Someone will hopefully figure that out in 2016 – and that will be disruptive.

Omnichannel is passé.

Do you have any idea how many people are trying to kill the word omnichannel? I’ve had a vendor tell me that they’ve encountered retailers who are trying to ban the word internally. I confess a degree of impatience with this argument. Omnichannel is not dead. It’s not over – we are not living in a post-omnichannel retail world by any means.

But people are tired of it. Here’s where I think the industry is at, in general. I’ve written (and spoken) before that you can’t do omnichannel right without doing it within the context of customer centricity. It is possible to enable omnichannel processes in that vacuum – you can certainly do what it takes to make click and collect possible. It’s a relatively simple thing to put in the online calls into inventory availability to share in-store inventory online (another thing entirely to talk about the accuracy of those numbers).

But all of that – not to minimize it – but all of those processes are just shellac. They are surface-level changes to processes, and even the retailers who have embraced them whole-heartedly have done so in a way that merely grafts these new processes onto the existing business model.

I think 2016 will be disruptive in part because we’re reaching the end of what companies can do in omnichannel without stepping back and revisiting the fundamentals of their business model. You know the fundamentals that I’m talking about: that the store is the central place where all transactions happen, that the store employee plays a minor role in that experience, etc.

The companies that are just doing the shellacking strategy are becoming more and more exposed as omnichannel drives deeper into the organization – into supply chain, merchandising, customer service. Even the ones who accept the degree of change required will founder as they make bigger transitions. Take Macy’s, the poster-child of omnichannel, and that company’s results and response to those results. I think there is more of that on the horizon.

The way we consume information is changing drastically.

Finally, there’s the whole information side of things. This isn’t an omnichannel story per se, but it definitely has an impact on omnichannel. As the API economy grows, as cognitive computing and natural language processing become both more sophisticated and more accessible, and as people get more and more creative about developing user interfaces and presenting information graphically, the way that we all consume information is changing drastically.

2016 will only see an acceleration of the trend. It’s getting easier and easier to bring data together, and the tools to analyze that data are getting more sophisticated and yet also easier to use. Throw in IoT and mobile, and I suspect that 2016 will see a lot of long-held myths about how people behave thrown to the dirt. I don’t know what those will be specifically but a lot of them will be about shopping.

Put that all together, and it’s pretty easy to see how 2016 will be the year of disruption – not because there are new, unexpected things happening but because all of the new things that happened over the last couple of years will finally have a big impact on the industry.

 

Posted in Consumer Research, Customer Satisfaction, Innovation in Market Research, Product Research, Research Industry Trends, Retailing, Shopper Insights | Comment

2016: The year of virtual reality?

Editor’s note: Christopher Baldwin is marketing and communications coordinator, EMEA, at social media SaaS company Bazaarvoice, London. This is an edited version of a post that originally appeared here under the title, “Democratizing the market: virtual reality vs. CGC in 2016.

We made it to 2016! If like me, you’ve been keeping up with the industry news over the holiday period, you’ll know that the New Year’s press has been inundated with the inevitable industry wrap-ups and “hot-and-not” lists that coincide with the end of one year and the beginning of another. Similarly, we have also seen an influx of studies and predictions around what 2016 will bring our industry.

virtual realitySo far, much buzz has been generated around the belief that 2016 will be the unencumbered year of virtual reality. From CNET to TechRepublic – even The Times featured a piece – from Racounter predicting a rise in virtual reality technologies, their ability to democratize the marketplace and the benefits for humans. That’s a pretty big ask for 2016.

I’ll openly admit that I am not totally convinced that 2016 will be the year of virtual reality. Do I think 2016 will see exciting developments in virtual reality? Absolutely! Like any other tech junkie, I cannot wait to see virtual reality further unfold and be witness to the enablement that this technology will undoubtedly bring. But that doesn’t mean I am not a little skeptical about its presence in 2016, at least for the everyday consumer.

Virtual reality by its very nature is transient across many industries. The latest figures suggest that there could be up to 14 million virtual reality devices in circulation by 2016 – mostly used for gaming, which is unsurprising given how long the gaming industry has been acquainted with the notion of virtual reality. As a teenager, I would play virtual life games on my computer and watch as my characters simultaneously engaged in fictitious virtual reality devices that did not exist yet, because they were beyond our time. Other industries set to see huge investment and rapid development in 2016 include security, infrastructure engineering and mental health. These sectors will see the more immediate benefits of virtual reality technology – and already are, in fact. Planners and architects, for example, already use sophisticated 3D simulations of cities to better plan projects and add ease to arduous and timely approval processes.

But, what will virtual reality look like for the average consumer in 2016? The opportunity is still significant but development and adoption will be slower – and, I predict, fall far beyond 2016. Sectors with an intrinsically experiential element, like travel and tourism and health care, will see movement quicker than others; however, the waters in these industries still remain colder and largely uncharted. Ultimately consumers will need to wait until even the fastest-moving and most innovative companies have the all-important executive buy-in. Until then, we wait.

For these industries, virtual reality will act as a democratizing technology – in the travel and tourism industry, it will allow people to explore hotels before committing to stay there; flyers will be able to explore planes before deciding who their preferred airline carrier is. In the health care sector, it will allow specialists and patients to interact in new ways and across great distances, so that geographical location is no longer a barrier to receiving the best possible care. virtual reality technologies will also be able to help in instances where traditional therapies may not have been as effective for patients, for example in rehabilitative cases.

I believe that this democratizing nature of virtual reality will make a profound difference to how people navigate the marketplace, consume and purchase. It will allow for better-informed purchasing decisions and will exploit the opportunity for brands and retailers to take advantage of the experience economy.

At a time when 82 percent of U.S. consumers are reported as spending less on material items in favor of “making memories” (according to a survey conducted by The Futures Company for American Express), retailers and brands that begin to accept and look to adopt virtual reality as an integral part of the consumer journey stand to gain market share from competitors – even if you sell something as mundane as a toilet roll. This is the reality we are facing … I simply predict that we won’t be facing it in 2016.

Until such a time exists, consumers will increasingly use technology to democratize the marketplace in a way similar to what they are doing now. That is, by creating and engaging in consumer-generated content (CGC) as a way to better inform their consumption and that of others. CGC will continue to be a primary source of direct participation between consumers and the marketplace, helping them be heard by organizations and shake walls of boardrooms from New York to Beijing. Thomas Cook is a great example of a company that is embracing the democratic nature of technology to better inform its business and increase consumer satisfaction. Until virtual reality is widely usable and scalable, Thomas Cook will continue to invite holiday-makers to share its own personal reality of the holiday experience; encouraging photos, videos, reviews and ratings to be shared, to help the business and other consumers.

This open approach to allowing consumers to share content is transferable across markets and can help businesses tap into the insights and benefits of virtual reality early on. How? It’s simple your consumers are already building a virtual reality of your brand, anyway. From reviews to ratings to questions and answers, photographs and video content – they are building a virtual picture that you are not wholly in control of. And, trust me, it’s real – maybe not on a virtual reality level of reality but it’s significant and cognitive, nonetheless – especially to your bottom-line. No organization can escape from the democratic nature of technology – we may not be fully over the line yet with virtual reality but CGC is here and is already doing the job.

So, for me, 2016 will be the year of the consumer and consumer-generated content … we may need to wait a little while longer for virtual reality.

Posted in Advertising Research, Brand and Image Research, Business and Product Development, Market Research in the News | 1 Comment

Understanding subconscious consumer triggers: 6 terms you need to know

Editor’s note: Kirk Hendrickson is CEO of market research firm Eye Faster, Floor Walnut Creek, Calif.

shelf in supermarketSubconscious buying behavior, or the initial point of entry into a consumer’s thoughts before provoking them to purchase, is typically triggered by a combination of perception and emotional response. We have observed this type of behavior consistently in our eye-tracking research. Although most people offer rational reasons for why they select an item (replacing something after running out, friend and family recommendations, on-sale, brand loyalty), the truth is that the majority of purchase decisions aren’t quite so logical. Here are six key terms that will help you understand how decisions are made and how you can harness this information when conducting research to improve your brand performance.

1. The subconscious mind

The word subconscious literally means below awareness. This level of the mind is not well defined or understood but it has tremendous power over human perception and behavior. Almost all brain activity takes place on the subconscious level. Estimates vary but perhaps a mere 10 percent of information reaches the conscious mind. As Freud put it, “The conscious mind may be compared to a fountain playing in the sun and falling back into the great subterranean pool of subconscious from which it rises.”

One of the toughest parts about assessing the subconscious is that the moment a thought is actively considered, it is no longer subconscious but rather conscious. You cannot rely on someone remembering something to understanding the subconscious. However, when it comes to visual attention, you can use eye-tracking.

2. Eye-tracking

While performing shopper insights research, you can utilize eye-tracking technology to precisely observe what is drawing the attention of a given shopper and how that affects their decision-making. The eye-tracking technology relies on a pair of glasses with two small cameras that catch even the smallest eye movements. Researchers record subject’s eye movements and what the subject sees in their field of vision to obtain a crosshair video of their focused attention.

After shoppers complete their shopping trip, researchers survey them about their experience. You can also watch the crosshair video with shoppers and ask them what they were thinking in each moment. When you analyze the data and compare it with the shopper’s conscious thinking and recollections, it becomes clear that the vast majority of visual information travels through the eyes directly into the subconscious mind and never reaches the conscious level. But it’s also clear that the information stored in the subconscious influences buying behavior.

3. Vast visual onslaught

Think about how much information is in front of your eyes in a mass merchandise store like Target or Walmart. Each package or item may have colors, shapes, brand names, text and pictures. In-store signage can have text, images, lights, movement or shapes. Each of these things has greater meaning in context and they’re all vying for your attention. Thankfully, the human eye is a remarkable tool for filtering the information into your conscious mind where thoughts are formed.

But before any of those thoughts reach the surface, that information is just part of the subterranean pool of visual data that your eyes filter into your subconscious mind. And, in order for data to make it even that far, your eyes have to take it in.

4. Fixations

Fixations are the building blocks of eye-tracking research and important when understanding how information travels to our brain. The human eye moves abruptly, not continuously. Movement occurs every three to six seconds, and in between your eyes are still. The movements, called saccades, last about 20 to 40 microseconds and you are likely unaware that they are happening. The still periods, which last 100 to 400 microseconds, are called fixations. Your brain can only process information from fixations lasting 200 milliseconds or longer.

The fixation location is very small; you can only perceive information approximately two degrees around it. Beyond this narrow area of focus, visual information cannot be processed. You can analyze each individual fixation when processing eye-tracking information and then diagram around two degrees to illustrate everything the shopper saw. This is all the information that is sent to the subconscious mind.

5. The consideration set

Shoppers can fixate on a tremendous number of items in a short period of time. In one study we performed in a music store, one subject fixated 245 different times in five minutes. That’s a lot of information. While the subconscious mind is capable of taking in all that information, processing it into conscious thought and memory would be impossible.

When you shop, your subconscious mind is constantly filtering information into a consideration set of items that could be worth bringing to the conscious level. All of your prior experience and knowledge of what you’re looking at gives your subconscious the tools to determine what you should consider consciously and what can be filtered out.

For example, categories in groceries stores are generally organized similarly and have been for nearly all your experiences in a grocery store. Cereal is a great example: grocers put children’s cereal on the lower shelves so it will be at eye level for kids. Shoppers who don’t have children don’t even glance at the lower shelves.

6. Emotional response

Emotional and physiological reactions also often occur at the subconscious level. In prior research we’ve done, changes in heart rate, skin conductivity, pulse rate, facial expressions or brain activity can cause a shopper to react. When combining eye-tracking research with biometric equipment, researchers can understand what items cause emotional or physiological responses and measure how those reactions may correlate to an individual’s likelihood to react, often without the participant knowing they’re having any reaction at all.

A positive emotional reaction will likely increase the likelihood a shopper will consider purchasing that product. Many new products fail not because they’re not a good product or something people want (although those are important, too) but because its’ packaging caused the wrong subconscious reaction. Incorporating biometric testing into package testing research can help make sure your product elicits the right emotional or physiological response.

 

Posted in Advertising Research, Behavioral Research, Consumer Research, Market Research Best Practices, Shopper Insights | Comment