Why brands need to rethink their approach in the 'age of the customer'
As technology changes the way we choose and buy products, companies need to rethink their approach to customer experience. Insightful use of data is now key to understanding and engaging customers.
New technologies have transformed the way we search for, buy and consume products, and how marketers promote them
Once upon a time we would go shopping in real stores and carry our purchases home – then along came the Internet, allowing us to order online. Now we can ‘try’ before we buy, speak to helpful chatbots and share our experience on social media – and throughout the process, the company is gathering data about us to predict our needs, help us find the right product at the right time and persuade us to buy more.
The digital revolution is reshaping the customer experience and the way we interact with brands, according to Dr Nicole Hartley, a senior marketing academic at UQ Business School. “New technologies have transformed the way we search for, buy and consume products, and how marketers promote them,” she says. “At one time the focus was on ‘user experience’ – how to make computer interfaces easier to use.
“Now artificial intelligence allows them to learn about consumers’ preferences and deliver a personalised service. They can suggest suitable products and prompt us to buy. It’s about tapping into people at right time with right messages. Companies recognise they need to streamline the customer experience and provide real time personalisation, but it’s eluding a lot of them.”
Those who do succeed, however, can reap the rewards. Netflix is one example of a company that has made clever use of insights from customer data, and as a result has transformed its business from a DVD delivery service to a global media brand.
As technology advances, it is no longer a simple case of online sales replacing in-store - the whole customer journey is becoming more complex. Mobile browsing and social media are key elements and new innovations are coming into the mix, allowing for complete digital customer experience pathways to purchase. However, the in-store experience can still be important, depending on the type of purchase. While we might be happy to book a holiday on the internet, anyone buying a car will do the research online but will probably want a test drive before making a final decision.
“Most purchases now involve a combination of face to face and digital, depending on the product,” says Dr Hartley. “As traditional industries such as insurance, banks and tyre fitters increasingly ‘digitalise’, the number of digital touchpoints is rising by 20% per year. Digital experiences are also converging.”
Virtual reality (VR) and augmented reality (AR) are amongst the latest innovations. VR offers a true multi-sensory experience, allowing customers to feel what it is like to be on location – whether that is viewing property at a real estate agency, watching a ‘live’ catwalk show at a local boutique, or playing with tiger cubs through a VR headset, an experience on offer at the Australia Zoo on the Sunshine Coast.
AR does not obscure the customer’s view but allows text and graphics to be superimposed, through the use of our mobile devices. Therefore some supermarkets are using it in store to make prices or product information pop up as shoppers approach the shelf. Retailers have used AR to supplement the shopping experience both in store and at home, where consumers can simply download an app and point their mobile camera at their feet to ‘try on’ a pair of shoes or take it in the front room to see how that new sofa would look.
While these augmented consumer experiences are now gaining traction across a number of industries, such as medicine, tourism and retail, it has been artificial intelligence (AI) that has the greatest impact on enhancing customer experience, says Dr Hartley,
“AI is a gamechanger. It gives companies the opportunity to drill into datasets to understand human reasoning and decision making and the more information they have, the more they are able to learn and predict our behaviour and thought processes. This allows a personalised level of engagement - they can understand our motivations, anticipate our behaviours and personally guide us to purchase situations.
“Google search optimisation, Facebook ads and Netflix recommendations are all examples, as are incentive and rewards programs such as Woolworth Rewards. With repeat purchases, the company naturally knows you what your preferences are.”
If the customer experience has changed, so have customer expectations. Dr Hartley says that customers now expect personalisation, immediacy and convenience. They want to be able to buy what they want, when they want and have it delivered straight away to their home – as reflected in the rise of services such as Uber Eats.
According to Forrester Consulting, we are now in the ‘age of the customer’. Customers are more empowered than ever and this, together with the wave of digital innovation, is changing market fundamentals.
However, despite the disruption taking place, one piece of advice remains unchanged – understand your customers. Kelly Owens, Customer Advisory Lead at KPMG Australia, says companies need to address five core questions: Who are my customers? What do they want and need? How do they behave? What is driving their behaviour? Which propositions will succeed? “These strategic questions are the same as ever, but answering these questions using traditional strategy approaches doesn't cut it in today’s market,” says Kelly.
She believes data and proper use of it is fundamental in finding the answers. She urges companies to pool their sources of customer information, from internal and external sources, then utilize it to create ‘personas’ to model and predict customer behaviour. This will allow them to reimagine their engagement strategies, products and offers by focusing on customers’ core issues and expectations.
Dr Hartley agrees that the fundamentals remain the same. “There is no point in coming at this from a technology or innovation point of view, the customer perspective needs to remain the central focus. If you don’t have a clear understanding of who your customers are, what they want and how you can add value, how can you begin to know how to best to connect with your consumers. People haven’t changed in terms of what they are looking for. All we are doing is finding new ways to enhance their experience and add value to people’s lives.”