Thursday, June 22, 2017

I love to shop in-store, please stop making me avoid it.

I couldn’t help but think of my recent brick and mortar retail experiences as I sat down for the CEO of Female Factor, Bridget Brennan’s, talk on “CX Sells: How to Win with the Human Side of Selling at Brick & Mortar Retail.” It didn’t take long to conclude that my experiences in the last handful of months have been, quite frankly, crummy.

My last two trips specifically stick out. In one instance, I attempted to buy shoes – expensive shoes – and was told my size wasn’t in stock. Ok, fine, but there was no follow up attempt to order the shoes for me or to see if another store had them in stock. Just a curt, sorry, next. They sure knew how to make a girl feel special . . . In the other occasion, I headed to the mall to find a dress to wear for a friend’s wedding. I entered a dressing room area with a handful of dresses. The area was void of store personnel and no room was available. I stood with 6 dresses in my hand for what felt like hours until a door opened. I quickly hopped in the room and, yuck, discarded clothes were strewn around the floor. My perception of these expensive dresses immediately shifted. I left. I could go on and on, but the point is, more often than not, I gave up, came home, and went online to purchase.

Now don’t get me wrong, I like to shop. My husband would tell you I like to shop far too much. But here’s the thing that Bridget nailed – ecommerce has transformed expectations for shopping in real life. When purchasing online, I am greeted, it’s easy to search, I can find my size and preferred color, I am sent suggestions based on my preferences, and my item is sent to me within days. It’s tailored and consistent. I could go on with the perks, but you get the idea. 

But, as Bridget emphasized, online shopping doesn’t have it all. Online retailers, for example, can only engage two senses – sight and sound – whereas the brick and mortar retailer can engage all five senses. More than that, plain and simple, people love real human connection and the energy it brings. Now to be fair, as Bridget noted, ecommerce is not the only thing changing expectations. There are other factors that are similarly impacting buying patterns, including having less time to engage in the physical marketplace and passive shopping.

So with all of these challenges, how can we bring the joy (and people!) to brick and mortar retail? According to Bridget, “a great in-store experience” is “the ultimate disruptor.” To combat these existing brick and mortar retail challenges, Bridget suggests leveraging the human side of sales by utilizing a “motivators framework.” The goal of this approach is to drive an emotional connection that makes customer’s feel: (1) connected to the brand and the sales associate, (2) inspired to buy, (3) confident in their purchase decision, and (4) appreciated for their business.

Now as a retailer, why should you care that the customer feels connected, inspired, confident, and appreciated? Because you can’t close a deal if you can’t open it to begin with. Bridget’s research shows that we should care about our customer’s connection to the brand and sale’s associate because “all things being equal, the service experience can be a deal breaker or a deal maker.” Inspiration is important because, simply put, “if you aren’t inspiring, you’re not selling,” especially when it comes to discretionary funds. Confidence matters because it “helps prevent returns and buyers’ remorse.” And finally, appreciation is key because it drives purchases, reviews, and referrals. As Bridget insists, this approach and staying “centered on the very human reasons of why people buy is the best compass of all.”

Retailers far and wide – please, please take note and buy a copy of Bridget Brennan’s book, Why She Buys. I love to shop. And I love to shop in stores. Please don’t make me avoid them.

Thanks for following along with Aaron KellerKitty Hart, and myself. Capsule is always interested in talking about design and would love to hear from you – please reach out!

Research and Strategy Associate

Fit For Purpose: How Stitch Fit Makes Personalisation Work

For a long time now, it’s been predicted that personalisation will drive the next wave of disruption in e-commerce, as start-ups beat bricks-and-mortar stores thanks to their ability to create highly individualised offers.

But the reality has lagged a little behind the hype. The age of personalisation too often ends up amounting to unwanted retargeting offers and a coupon here and there. Even when this stuff is useful, it’s hardly a game-changing experience, more an engine to drive marginal gains.

Some companies, though, are doing a lot more, taking advantage of machine learning to create genuinely fresh and personalised experiences. One of these is Stitch Fit, whose Brad Klingenberg shared their tips and tricks at OmniShopper. Stitch Fit are a store and stylist combined, selecting and delivering items of clothing to their customers: if you don’t like a selection, you can send it  back at no cost.

Stitch Fit is a beautifully intuitive idea whose execution is fraught with difficulty. Fashion is an area where one size literally doesn’t fit all – the perfect arena for personalisation to make genuine retail breakthroughs. But to keep customers happy, their selections can’t be disappointing. You have to get it right first time, and then get it even more right second time.

To achieve this Stitch Fit rely very heavily on customer feedback. Their idea of commerce is based around feedback loops – the more they learn about you, the better the service can be. But this leads to another hurdle. A service that deals in digital goods – like Pandora or Netflix – can iterate using passive data: it knows what you’ve viewed, bought, listened to and so on. Passive data does the work.

That isn’t so for clothes. Stitch Fit knows what it’s sent out to customers, and what’s been sent back – but that’s very binary, crude data. It doesn’t know how often they wore it, where they wore it, what they thought about it. So it has worked to create a customer service culture where customers are happy to give that feedback.

How do they do it? The secret, says Klingenberg, is self-interest. If the customer trusts the brand enough to believe it when it says their feedback will improve selections next time, they will be eager to give it. It’s an order of magnitude more motivating than the generic promises that service overall will improve which most feedback forms or research surveys offer. Personalisation done right makes customers happy to open a dialogue.

Stitch Fit’s success, Klingenberg told us, is based on a combination of machine learning and a human touch. Machine algorithms come up with suggestions, which human stylists – the company employs several thousand – curate and edit using the customer’s specific feedback. Perhaps the most exciting thing about the business model is the way that the same systems of feedback loops allow Stitch Fit to evolve and optimise its exclusive clothes. In this way the service becomes not just about matching clothes to customers, but actually improving clothes for greater appeal.

Personalisation is a tricky problem for most retailers to solve, and Stitch Fit don’t have all the answers. Klingenberg happily admitted that most of what he’d been talking about was the problem of customer retention, not acquisition: the brand relies on word of mouth for reach. Also, not many sectors are as perfect for this business model as fashion, where the gap between individual fits and mass-market products is so glaring. But the basic principles – mixing machine and human expertise, and designing around feedback – are ones many brands could adopt.

Wednesday, June 21, 2017

Boo-ing: How Mars And Walmart Built A New Halloween Tradition

If you, like me, are a cynical soul, you might have come to believe that most new “holiday traditions” are in fact popularised by marketers for the express purpose of selling more cards and candy. In which case you might have been gratified by the OmniShopper presentation by Walmart and Mars, which was explicitly about popularising a new holiday tradition. And yes, the aim was to sell more candy.

The holiday in question is Halloween, which you might feel is candy-saturated as is. But Halloween actually occupies a somewhat perilous position in the retailer’s calendar. It’s forced to vie for attention with a lot of other seasonal events: clearouts of Summer goods, Back To School displays, the start of the Football Season, and even early Christmas promotions. It means that while Halloween is indeed a sales monster, those sales are highly concentrated: 87% of shoppers buy their Halloween candy in late October, just in time for the day itself. This means that Halloween shelf space is often idle in the run-up, and the demand spike creates potential supply and overstock issues. Walmart wanted a way to shift Halloween candy throughout September and October.

Mars’ Alisha Watkins, their Walmart Shopper Marketing Team Lead, and Matt Silvestri of the Integer Group showed how research and marketing creativity lead to a solution. The research began by taking a known trend: trick-or-treating still accounts for the bulk of Halloween candy sales, but it’s in decline among younger families. The reasons for this are varied – changing habitation patterns, greater fears about child safety on Halloween, and more. Whatever the cause, relying on trick-or-treat to raise sales wasn’t a good idea. But what about looking at emergent behaviour – things new parents were beginning to do instead?

Enter Boo-ing. Boo-ing is a minor local Halloween tradition of obscure origins. In those areas where it dates back more than a few years, it was known as “The Phantom” or “Ghosting”. Around the turn of this decade, trendspotters began to talk about it as something Millennial families were embracing as a friendlier and safer alternative to trick-or-treating.

What does it involve? You fill a small orange bucket with treats and leave it on the doorstep of a neighbour with a card saying they’ve been “Boo-ed” and a request that the recipient “Boo” others in turn. When Mars and the Integer Group did their research, only 7% of people used their Halloween candy to “Boo”. They interpreted that as a market opportunity – 93% could be joining in. A shopper activation campaign was born.

The appeal of Boo-ing to Walmart (and Mars) was obvious. The ‘tradition’ hit a very sweet spot: it involved lots of candy, it had reciprocity built-in with the command to Boo unto others , and it slotted into the run-up to Halloween, rather than being something done on the night itself. (Those Boo’ed need time to re-Boo, after all.) It was a perfect opportunity. But how to make it catch on?

Mars took the lead, creating a social media and in-store campaign for Walmart which focused on platforms where ‘Walmart Moms’ were prominent, like Pinterest (ideal for the highly visual Boo-ing treat baskets), Facebook and style or craft blogs. Impressions running to the hundreds of millions showed the concept’s appeal. To turn awareness into action, Mars and Walmart worked to create in-store events which created a sense that this really was a tradition, and pre-packed “Boo kits” to let people get started easily. Walmart spread chances to buy candy throughout their stores – with up to 14 different points of opportunity.

The results exceeded the team’s expectations. Sell-through on the Boo-ing merchandise was 90.8% in year one and 91.4% in year two (the benchmark for success is 88%). The program delivered a 40 to 1 return on investment, and Mars gained almost a point of Halloween market share in each year. This success was rooted in risk-tasking, Watkins and Silvestri agreed: “A candy company decided not to focus on trick-or-treating at Halloween, for its largest customer”. But looking for the next opportunity paid off. Those who roll their eyes at new traditions should probably get used to Boo-ing.

"It's too Early for the Feels"

"It's too Early for the Feels"

I think it’s safe to say I did not expect to see sniffles and tears around the room today during Edwin Wong’s speech on digital humanism and recoding culture. But surprise, the VP of Research and Insights at BuzzFeed incited all the feels early this morning with a thought-provoking discussion on the rise of the individual and cultural relevance as a driving force in developing content today. To illustrate his points, Edwin used powerful real-life examples of individuals or groups redefining what it means to be “normal” and how we can connect to audiences in scale by focusing on the individual. The result, several people in the room suddenly had "bad allergies" causing watery eyes.

Edwin walked the room through compelling realities that exist in our world today. Namely, traditional demographics are dissolving and psychographics are evolving. The result? The rise of the individual is trending in marketing.

According to Edwin, over 80% of Gen Y/Z-ers think that traditional demographics like gender, sexuality, or race, fall on a spectrum. As a result, what was once a rather small “fringe audience” is growing significantly. In other words, fringe interests and niche products are (1) taking a bigger, majority piece of the pie, and (2) there is a larger overlap in cultural groups. Consequently, traditional demographics no longer offer insights that appropriately drive market strategies. Similarly, psychographics are evolving. As a society, we are redefining roles of what it is to be a man or woman – who we think he or she should be is changing. There is no gender norm. Again, targeting based on traditional insights no longer packs the same punch as it maybe once did.

So, what to do? “Stop targeting, start understanding.” After all, if you don’t understand the influence or predisposition of your customer, how can you develop content that resonates? As Edwin described, we can do this in part by paying attention to the “power of one” in consumer behavior. In other words, the notion that by creating for one, you can ultimately create for many by providing content that speaks to a niche culture, fuels identity, and creates empathy. As Edwin noted, in empathizing with others, “we see past the specifics of what we know, to experiences that might actually be universal.”

Here’s where we cue the tears. To illustrate his point, Edwin showed the crowd the following video:

As you can see in the video, you don’t have to be a child of an asian immigrant to empathize with this group – we can reach scale with relevance and shifting content from being about the brand or retailer to a focus on the consumer; to focus on content that makes people say “yes, that is so me.” It’s about covering stories that are important and resonate with the individual.

If you’d like to connect and talk more about content that resonates, please reach out. We will be at the conference all week talking about The Physics of Brand, design, and the stories that inspire us.

Aaron Keller, Kitty Hart, and I write for the OmniShopper event blog, please reach out if you have a story to share.

Research and Strategy Associate, Capsule Design