Insight
Consumer Trends

Consumers are increasingly brand disloyal as items become commoditized. This forces brands and retailers to collect and use data to offer a seemingly tailormade shopping experience, which is key to creating customer loyalty, according to several experts.

​A cinema in a major European city in the 90’ies: Sharon Stone lights up the screen after the Benetton and Coca Cola commercials have faded out, and every spotty teenager in the front row seems to have bought his parka in the same high-street store. There is a shared frame of reference across generations, and being opposed to anything mainstream is, well, not for the masses yet.


Today, Kevin Parakkattu, Associate Executive, Plug and Play Tech Center, expects customer experience to mimic the gradual shift seen in advertising in America, which has moved from broad brand advertising to targeted focus:


“Segmentation and personalisation became the buzzwords in this domain and any ad agency not offering a tailored solution for a certain subset was advertising to everyone but selling to no one,” says Parakkattu. He predicts a similar trajectory for customer loyalty, in which personalisation will be key to keeping customers loyal.


“Consumers are increasingly brand disloyal as items become commoditised, prompting brands and retailers to offer seemingly tailor-made solutions. To offer such solutions, brands and retailers can leverage a variety of different facets for gathering data: collect online browsing and purchasing history, in-store analytics incorporating wifi analytics or computer vision, or marrying the two to create an omnichannel customer profile,” says Parakkattu.


He believes the next big thing will revolve around those who are able to understand the customer at an individual basis, offering solutions that are tailormade while seeming native and non-intrusive. Retaining strong human connections through customer service techniques could make all the difference in a digital age:


“Customer service will be a data game. If relevant data is collected, analysed and used for offering better targeted products and services to the consumer, he or she will often view this as excellent customer service,” says Ivan Sandquist, co-founder of Storebox acquired by Nets in 2015.


He warns against collecting a lot of data without using it, or not using it for delivering added value to the customer:
“It will certainly backfire. Imagine that you walk into a bookstore, and the cashier already knows which books you have purchased and which books you are most likely to buy or like. Combined with the knowledge of the cashier, this is what creates great customer service and builds strong human connections,” says Ivan Sandquist.


Millennials want brands to know about them
When asked what millennial consumers expect going forward, Parakkattu explains how the millennial customer has one central Google login for all G-suite applications and perhaps one Facebook login for a variety of applications:


“While this customer seamlessly checks out online in a matter of two clicks on Amazon, he or she has no such ease of use at checkout when in-store. The friction, the lack of personalisation, and the seemingly endless search for items in-store will only encourage millennials to shop online,” says Parakkutta, stressing that millennials expect relevant items, found in an immersive and seamless experience:


“They expect little to no friction – think Amazon Go – and an array of items that are easily found and relevant for their specific needs. They expect the store associate to be knowledgeable and provide a high-touchpoint service that is irreplaceable.”


He is backed by Thimon de Jong, a Dutch lecturer and founder of the think tank Whetson, who at a recent trade conference in Norway foresaw how stores will employ consumer data to a much greater extent to ensure a customised personal shopping experience, down to being met by a sales assistant who matches your mood on a given day. In addition to personality matching, de Jong also anticipates a trend towards what he coins a digital balance, in which it will be unproblematic for a sensor to register when it is time to order and install new toilet paper, whereas a decision such as replacing a worn-down pair of shoes should still be left to a thinking person.

 

European millennials not far behind

The trend of personalisation seems to have hit Europe too. A recent French study by Paris Retail Week reveals how 45% of young people aged 18-35 would like to be able to buy directly on social media compared to only a quarter of the entire French population, and as much as 74% of the entire population find it harder and harder to endure waiting in line at the checkout. What is more, French consumers expect the sales assistant to be passionate about his or her product.

 

Meanwhile, e-commerce keeps growing in the Nordic countries, sporting a total annual turnover of 42 billion euro, according to DIBS' annual report on e-commerce in Sweden, Norway, Denmark and Finland:

 

"The reality of e-commerce is that online shoppers will chose the company that provides the best customer experience available. There is no room for complacency, and unlike physical stores, online businesses compete with companies from all over the globe," says Daniel Larsson, VD, DIBS Payment Services, which is part of the Nets Group.

 

Did you know?

US-based Plug and Play Tech Center drive accelerator programmes globally in close cooperation with merchants such as Galeries Lafayette and Carrefour in France, Proctor & Gamble, Target Accelerator, Mars Inc. and Colgate Palmolive in the US, Henkel in Germany, John Lewis in the UK and Panasonic in Japan. The purpose of the accelerator programmes is to develop fintechs and new solutions for Plug and Play Tech Center's merchant partners.

 

Sources:

'Nederlandsk forsker spår personlighedsmatching i butikker', DN Dagens Næringsliv by Gard Oterhom, 20 September 2017

'Près de la moitié des digital natives prêts à acheter sur les réseaux sociaux', LSA Commerce Connecté, 12 September 2017



Sustaining the illusion at the point-of-sale.

Until a customer reaches the point-of-sale (POS), the shopping experience has been about selecting desired goods and services among a broad range of offers. To many consumers, this is enjoyable. Having to part with his or her money to bring home the desired good or services is another matter altogether:

“This is a crucial step in the shopping experience and it must therefore be both fast and convenient. I believe that in the not too distant future, payment will happen automatically as you pass by the POS, or you use your fingerprint, iris or other personal characteristics to identify yourself. Payment cards, mobile phones or other devices will be totally unnecessary,” says Ivan Sandquist.