Retail evolution in parallel with Customers’ life evolution

No doubt. Retail is changing continuously, usually silently, sometimes in a more disruptive way.

Here you can see a possible parallel evolution between Customers’ life and contexts, and the main retail formats.

 

I wonder if this self-explanatory chart may help. If not, you can send an e-mail to us and I will add more details.

 

Text by Lluis Martinez-Ribes

WE ARE MOBILE. M-commerce from the perspective of neuromarketing

Since the launch of the iPhone (2007) and for the first time in history, as of spring 2014, there are more smartphones in the world than mobile phones (Gartner, 2014).

Meanwhile, shopping using these devices just goes from strength to strength. In 2013, such purchases already made up 15% of distance shopping globally and forecasts for growth over the next few years are extremely high (Faresse, 2013).

A third revealing statistic is that, in 2013, there were two countries in which 43% of smartphone owners had used them to shop: South Korea and China (Online Business School, 2013).
we-are-mobile
Image: Artchandising

I doubt that it has escaped anyone’s attention that e-commerce is experiencing its greatest boom to date.

Digital persuasion

The rise in popularity of smartphones has gone hand in hand with a sub-revolution in terms of analogue dialling. Telephones with keypads are a dying breed, while touchscreen smartphones and tablets have become extensions of ourselves.

To give an example, in Spain, over 60% of users of mobile devices use a smartphone, a figure which is even slightly higher than the European average of 57% (Europapress, 2013).

Therefore, it could be said that mobile commerce, or m-commerce, is set to be one of the key driving forces behind the growth and evolution of digital commerce.

Smartphones form ‘e-bodies’

A total of 96% of smartphone owners have their device within one metre distance from their bodies, 24 hours a day. In fact, the device seems to have transformed into part of their bodies, giving rise to the so-called ‘e-body’. Smartphones have almost become extensions of our limbs.

This phenomenon changes the way in which we socialize, shop and, in short, how we live our lives, converting us into On-Off people. The line between online and offline becomes increasingly blurred, and we interact with our surroundings in whichever way seems most suitable at any given time, without being aware of the mechanism or way in which we do so (Martínez-Ribes, 2013).

Marketing’s new objective

The smartphone is set to become the main way of selling, the e-store. If we consider that now devices are almost part of us, the customers themselves end up becoming the store (Martínez-Ribes, 2013). This means a significant change is required in the way we think about marketing and retailing.

The objective of marketing is no longer simply generating traffic in store, but rather accompanying the customers throughout their everyday experiences, becoming part of their lives, as he or she ‘is’ now the store.

Smartphone apps are the main tool for undertaking this task. Seeing that apps are the main way in which customers access information and use their devices, they should become our main focus.

Strategic neuromarketing as a tool

As we know, the majority of human decisions are taken non-consciously by the limbic system. In order to become part of our costumer’s lives we must become a habit or a custom; ie an action that is performed simply and with no need to streamline processes.

Strategic neuromarketing can help to create habits, offering ways to stimulate the imagination and emotions. For instance, it enables us to orient marketing strategies based on empathy and personalization, taking culture into account and putting ourselves into the customer’s shoes, as we are identifying with them.

Neuromarketing can also contribute towards reducing significantly customer effort, minimizing the need for conscious attention, asking for our attention in a multisensory way (using all of the possible senses) and generating emotions.

Apps that make part of customer’s lives

If you pick up a smartphone and look at which applications are on the bottom menu bar, which are the ones on the main menu and on the other screens, you will notice that they are organized in order of relevance and frequency of use.

It is highly likely that those that are most ‘in view’ are those that are most commonly used and those that are checked every morning as soon as waking up.

There are three fundamental elements involved in making an app being part of customers’ lives and ensuring that the app appears on the first screen.

  1. Personalization: A good app has to adapt to the user, not only in terms of more traditional kinds of customization based on knowing their defining data (age, gender, interests, etc.) but also taking into account the context of use (time and location), being able to offer the most relevant information based on a mental framework. What users need from an app related to consumer goods is not the same whether they are at the supermarket doing shopping or when they are at the gym. This context must therefore be taking into consideration.
  2. The content should not only be adapted to the user-customer, but should also offer them relevant and pertinent information at all times, all of which must be up-to-date and change with suitable regularity.
  3. The user experience must also be enjoyable and as effortless as possible. To this end, design plays a critical role, not only at an aesthetics level but also in terms of usability. The app must be clear, easy and intuitive. In order to create a full experience, it must be emotional, generating involvement and a reason for its use.

Conclusions

A few years ago, it was unthinkable that we could buy anything that we want just by clicking on a little button in our hand palm. Smartphones have become part of our bodies and, as a result, customers have turned into a store themselves.

The key to the digital world involves being able to create customer habits, ensuring that the information on the devices is useful, clear and intuitive. Our apps have to be capable of residing in the limbic system and making customers put them on the first screens of their phone. In order to do this, these apps must give relevant and personalized information that is easily accessed without any effort and, above all, in a fun and enjoyable way.

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Bibliography

Andersen, A. and García, J.M. (2013) “¿Cuáles son las claves de éxito de una app?”. La Vanguardia, Tecnología, 15th April.

Europa Press (2013) “Mirar el móvil por la mañana, tan necesario para los jóvenes como vestirse”, 13th December. Available on: www.europapress.es

Europa Press (2013) “España lidera en Europa en uso de smartphones con un 66% de tasa de penetración”. 20 minutos, 21st May. Available on: www.20minutos.es

Farese, A. (2013) “xAd Mobile Stat of the Day: M-commerce is driving overall e-commerce sales”. Available on: www.info.xad.com

Gartner (2014) “Gartner says annual smartphone sales surpassed sales of feature phones for the first time in 2013”. Available on: www.gartner.com

Martínez-Ribes, L. (2013). “Un nuevo ser, la persona OnOff”. Código 84, Congress special edition.

Mingote, N. (2011) “Investigación revela que los usuarios revisan iPhones antes de levantarse de la cama”. Available on: www.appleweblog.com

Online Business School (2013) “La compra vía smartphone asciende en España a 2.500 millones de euros en 2012”. Available on: www.euractiv.es

Online Business School (2013) “El M-Commerce despega en España y mueve 2500 millones de euros”. Available on: www.centrodeinnovacionbbva.com

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Lluis Martinez-Ribes

Source: Código 84, nº 181.

A NEW PROFILE: THE ON-OFF PERSON. The impact of smartphones

 

Image by artchandising

I got married in July 1976. As a lover of amateur photography, my father wanted to take charge of taking the photos instead of hiring a professional. And we weren’t about to argue with him? Of course don’t.

On the day of the wedding, there was a technical issue with the stills camera and not a single complete photo was taken. There is just one in which my wife and I appear together. On the upside, our friends were spared long evenings viewing the interminable wedding album.

Digitization: a revolution

The story above was a personal anecdote from the analogue age. Nowadays, we would have hundreds of photos thanks to family and friends. The difference is that digitization has spread far and wide to reach almost everyone.

Mass access to digitization marks one of the greatest revolutions in the history of mankind. It enables any person to perform all manner of tasks, such as creating texts and images, editing, sending or receiving them at any time from anywhere, simply and instantly, at almost no cost.

This has a huge impact on the majority of social and commercial processes. For instance, most people who go to buy a car will have got information online beforehand.

And that is just the tip of the iceberg. Imagine José, a member of my team, is going to negotiate a contract with a potential client next Monday, and I have to give him a few pointers in advance. Using my mobile, I check out the client’s company and search for their financial details. I find the information I want, copy it and then perform a number of operations with the data on a spreadsheet program, all on the same phone. I copy the final result and paste it into an email, which I send on the phone straight to José: “This is the best price that you can offer.” Due to my bad memory, I decide to draft a quick internal note of the calculation process I have used, which is saved on to my phone. This has meant that I have been able to deal with business while sitting on the beach.

Dear reader, take a moment to think about at which points during the process I was online and offline.

Phase
Search information on the internet
Using the spreadsheet
Sending the email
Writing a memo
Status
Online
Offline
Online
Offline

When you read the story a moment ago, did you notice how I had jumped repeatedly between the digital and the analogue world?

The On-Off people

We are witnessing the emergence of a new type of customer: the On-Off person.

The On-Off person is empowered because they take advantage of the benefits of digitization through their internet-enabled phone, without really noticing when they are online and offline, hence the term ‘On-Off’.

Making use of digitization through smartphones and tablets is a secondary revolution within the digital revolution itself. It has a great impact on people’s lives, the way they buy, consume, use and share ideas, and, in general, how the live. The implications for businesses are massive.

There were two driving forces behind the first revolution: the digitization and the availability of digital technologies to the general public.

The rise of the On-Off customer is due to the simple and accessible use offered by mobile phones and tablets equipped with a screen operated using fingers. This feature has introduced the sense of touch into the digital arena.

Wanted. On-Off people required

The number of On-Off people just keeps on growing. In 2012, 30% of the world population owned a smartphone, while in Spain the figure reached 50% (1).

On-Off people can be found in the doctor’s waiting room, on the metro and pretty much anywhere. They use their phones both when they are on their own and in company. They represent a new way of socializing.

It is not only youngsters that are On-Off. It is increasingly common to see older people using digital tablets with ease. At 85 and 87 years old, my mother and father are on their tablets every day without fail.

Let me ask you a question: how far is your mobile from your body now? Perhaps it is as little as 2 cm. The 96% of On-Off people have their smartphone less than a metre away from them at all times, 24 hours a day.

This means that the phone has, in fact, become an extension of their body, a continuation of their hands. As I often say, we are actually becoming bionic. This feature makes it incredibly easy and convenient in terms of living life, being a tourist in an unknown city or avoiding a traffic jam. Viewed as such, it is easy to understand why, for many On-Off people, a day without their smartphone is a very tough day indeed.

The customer, the store

The above facts give rise to an important consequence. What becomes clear is that a smartphone is a store, even though the customer pays it.

If, as we have just seen, the phone has become part of the body, the natural conclusion of this train of logic is that the customer has become the store.

And this idea is not – joke: it is a reality that forces us to rethink the whole model of retail trade.

The customer no longer has to go into as many stores to do their shopping because they themselves are the store. The key factor will be that the interface, or app, is on their telephone and that there is a very healthy relationship between the customer and their app-store brand. The focus will no longer be on running effective promotions but rather on how this app-store contributes to certain moments to the life of this customer/person.

When making purchases, On-Off customers use their phones when they need information, without even noticing whether they are on or offline.

This makes purchasing processes much more complex and nonlinear. They may start off in the physical store, move on to the telephone and end up buying online at home, or vice versa. Once again, this raises the possibility of reengineering to innovate within the sales process.

Final considerations

With the rise of the On-Off customer, it no longer makes sense to think of separate online, or indeed offline, businesses. Whenever somebody tells me that they have are running a start-up, I just assume there are talking about an online project.

My first concern is whether the business proposition they are setting up might be valid for a different time, when we first realised that we wanted go online and we began the purchasing process by turning on the computer.

Smartphone apps must be firmly founded on one or both of the following key pillars:

  • Convenience, providing a better quality at a particular moment or in a certain situation.
  • Amenity, surprise or fun. A smile lights up the world more than the sun.

And they must always be focused on how and when they will be used or, to put it another way, the context of their use, because they are destined to become an extension of the person-customer’s own body.

[1] Data from the study ‘Mobile Life 2012’ conducted by TNS.

Bibliography

Neslin, S. A. & V. Shankar. 2009 “Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions”. Journal of Interactive Marketing, Vol. 23, No. 1, pp. 70 – 81.

Rangaswamy, A.; & Van Bruggern, G. (2005) “Opportunities and challenges in multichannel marketing: an introduction to the special issue”. Journal of Interactive Marketing. Vol. 19, No. 2, pp. 5 – 11.

TNS (2013) Study: ‘Mobile Life 2012’.

Verhoef, P.; Neslin, S.; & Vroomen, B. (2007) “Multichannel customer management: Understanding the research-shopper phenomenon”. Journal of Research in Marketing, Vol. 24, pp. 129 – 148.
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Lluis Martinez-Ribes

Source: Código 84, Special Conference nº.