What will the future bring for leading brands in the retail and fashion industry?

With the rise of e-commerce giants like Amazon, Alibaba, and eBay, the retail scenario is rebuilt on a digital foundation, where competition is played on the ability to meet an entirely new set of behaviors, expectations, and priorities of today's shoppers.

On-demand services and instant gratification available at any time are giving customers an ever greater control over their purchase journey and increasing their power towards brands. Speed, ease, contextual and individual relevance have passed within a few years from being valuable nice-to-have to essential must-have.

However, few are really trying to bridge the gap between insight and action, and it's the case of leading companies that are using technology to innovate their customer experience with a human-centric approach, changing how they interact and engage with today's customers.

Timberland launched a context-aware email marketing campaign, shaping ads for different weatherproof products to match each user's position and weather conditions in real-time.

Since at least 2013, Amazon takes notice of our shopping behavior and tailors recommendations for every one of us. And as we continue browsing, the fitting personalization goes on.

Even customer support has become much smarter. On companies' websites and e-commerce, chatbots and virtual assistants use natural language processing to help customers effortlessly navigate questions, FAQs or troubleshooting.

In the offline world, we see stores and shop windows coming to life with digital signage interactive systems and 3D contents on augmented and virtual reality. And even behind the scenes, store analytics is becoming a common practice that will soon have nothing on online analytics, helping retailers to better understand shoppers behavior and measure the impact of different areas in the store environment.

It is easy to see how all these applications have one thing in common: AI.

Artificial intelligence is disrupting the retail industry as it enables marketers to automate and bring on a large scale something that until a few years ago required effortful small-scale processes. That is tailor-made experiences, custom-designed for each individual.

But there is still something wrong with AI today. A missing piece to move from the now outdated customer-centric approach to a people-centric path, more consistent with the evolving needs and wants of today's shoppers. It is predicted to be the future of AI, that will progressively bridge the gap between the offline and the online world. That missing piece is empathy.

We have identified 10 key factors for an empathic customer experience. You can find them in the "Digital Innovation in Retail & Fashion" report, now free to download.

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Growing a happy customer base is the key to success, we all know it. We usually look at the bright side - how Brands could and should deliver the best possible experience. This time we want to focus on the dark side of the DCX.

In a nutshell, are you willing to delight your customers with amazing experiences? Do you work constantly to improve your strategy? If the answer is Yes, do not read this post. Or maybe you should. Warning: this is a (not so much) ironical post.

When creating a business strategy, most companies do not consider the importance of a well-rounded customer journey. They simply look at the tip of the iceberg - made of standard recommendations - not considering the uncovered area, that refers to valuables experiences.

MAKE YOURSELF HARD TO FIND

In love, the winner is the one who flees. The same way, you could be tempted to run away from your customer’s attention, hiding and making yourself hard to find. What better way to start a relationship than to be desired, right?

If you want to deliver a horrible customer experience, the tipping point is to make your customers feel upset. Forcing them to struggle, testing their will to find information about you or your products. The result? They will soon turn to your competitors.

The best view comes after the hardest climb, right? No. Not when talking about the customers and their experience. It’s essential to make sure that people can easily find what they are looking for, whether it is the localization of your store, the price of your product or the contacts of support.

Today’s people are always on the move and connected. They don’t want to waste time and request immediate answers to their questions. 75% of online customers expect help within 5 minutes. If you’re not there, you’re anywhere. Digital and mobile technologies got them used to the easiest, fastest and the more natural way to do things; they expect your brand to do the same.

In this scenario, the worst thing that you can do is to believe that you don’t need to oversee as many touchpoints of the customer journey as you can, online and offline. Do you want to be bad at DCX? Hide where none can find you!

DO NOT UNDERSTAND CUSTOMERS

Sometimes, even when you’ve been working so hard to make them run away, customers still have the guts to believe in you and your product. They want to connect with your brand at all costs. How can you escape from this heavy task? Easy: show no understanding at all of the channels.

In this era of constant data flow coming through all sorts of touchpoints, so many companies get lost in the stream, stuck with no idea of who their customers really are and where they are. All the information in this world is useless if you don’t know what to do with it.

Just think about social media, the perfect place to build useless strategies, waste your budget and not reach your audience anyway. One of the first things they teach you in a marketing course is that no brand/product is similar to another in terms of target audiences and channels.

Do you want to be irrelevant? Throw your messages and contents to a random audience using randomly chosen channels. Otherwise, find the perfect platform to interact with the right audience: think about your buyer personas and look for the right place to find them.

Most customers use multiple channels to complete a purchase; improving your omnichannel presence is a must if you want to maximize the opportunities to interact with prospective customers. The goal of a multi-channel strategy is to give your potential customers the chance to choose where and when to talk to you and buy your product.

Not only the presence on social media is important to build a good community; it is necessary to find the right way to interact with your customers, using all the channels they are connected to.
And before you say, no, posting and tweeting are not enough to make your presence relevant.

Delivering meaningful experiences means having a cohesive message across a number of channels, and a continuous evolution as the data about your customers’ behaviors and needs increase. You need to keep moving fast to be one step forward your competitors.

TREAT YOUR CUSTOMERS AS NUMBERS

After everything you have done to make them run away from you, if they are brave enough to buy your product, you can always change their mind with terrible customer service. Treat them like a number, not the most valuable asset of your company. That is the ultimate recipe for disastrous customer experience.

Keep in mind that the customer journey doesn’t end when a lead converts into a customer. It just starts there. People will judge you for your ability to offer good and timely support to their requests, whether they need advice or fixes.

People consider bad service experiences like waiting too long on the phone, being rebounded from office to office, having to explain the same issue to multiple service agents, or having to mail back a product ordered online.

When your customers feel they are being ignored or underestimated, they will share their experiences with the community. You know what that means? Bad reviews. If you do not accept your customer’s feedback, remove them, or reply with rough words is the worst thing you can do to improve your brand reputation.

You might get an enormous number of mentions through social media, even launching a trending topic, but it doesn’t mean it’s going to be good for you. “Any press is good press” doesn’t work for marketing in the digital era.

People want brands to take their responsibilities, to act wisely and kindly. They want you to break the rules only when it’s for a worthy cause, not to get attention. Invest in your reputation with a long-lasting relationship, or you’ll end up as a shooting star.

A very well known example of bad brand reputation is Comcast, that provides one of the worst customer service all around, with customers usually complaining about the difficulty in reaching live support and, last but not least, for the hidden fees and extra-payments.

EXTRA: CHARGE & CHARGE

Charging an extra fee to surprise customers is the ultimate step for the worst customer experience people have ever seen. There is nothing more irritating and disappointing than being charged an extra fee, unexplained and unexpected.

Customers want to be sure that all the information, prices and fees are clearly declared. Not acting in transparently forces your customers to contact you to get information or, in the end, to ask for a refund. It affects brands perception, and decrease loyalty. Is this what you want?

Ultimately, you must remember that the road to DCX hell is full of good intentions.

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Every day, enormous amounts of money around the world are spent on advertising tailored for socio-demographic groups. But demographic analysis is only part of the story about your customers.

If you want to get the whole story you must start considering your customers as people, rather than merely seeing them as someone buying the product that you’ve got. To do so, you need to stop relying solely on an objective-based perspective and start getting a more in-depth view of your customers.

Qualitative information such as customer personality can show you more clearly what is important to them and how they make buying decisions. Moreover, as customer personality relates to their attitudes and behavior, it can be useful for developing your products and services as well as for creating powerful communications.

For example, you probably didn't know that extroverts:

• Look for the hedonic value of products (see notes 5; 4)
• Feel more positive consumption emotions and affective commitment towards brands (6; 7)
• Use more word-of-mouth communication (11)
• Tend to be highly fashion-conscious (9)
• Are more favorable toward transformational ads than informational ads (8)

While if you are dealing with conscientious customers, you should mind that they:

• Look for the utilitarian, functional, task-related, and rational value of shopping (4)
• Tend to be prestige-sensitive (9)
• Manage their money more because they are future oriented and have positive financial attitudes (3)
• Are more favorable toward comparative ads than non-comparative ads and informational ads than transformational ads (8)

And if your customers are open-minded, consider that they:

• Support technological innovation (13)
• Place greater importance on reliability rather than on style when buying a computer (10)
• Are less prestige-sensitive (2)
• Tend to make more online purchases (1)
• Are more favorable to recycled and sustainable products (12)

These are some of the personality traits included in the Big Five Model, also known with the acronym OCEAN: Openness to experience; Conscientiousness, Extroversion; Agreeableness; Neuroticism.

One of the major arguments against the use of the Big Five Model - and personality traits in general - in marketing is the difficulty of obtaining such kind of information about customers.

However, the expanding of digital and social platforms makes available terabytes of data about users, including subjective qualitative data. This gives marketers the unprecedented opportunity to understand customer personality and deliver AI-driven personalized contents on a large scale.

This is more than moving from a partial view of customers to a more comprehensive one; it is shifting from a merely commercial approach, what we know as "customer-centricity", to a more intimate and long-term relationship, what we will call "people-centricity".

To enter this new era, start thinking about it: how will you enhance your marketing when you also get the human side of customers?

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Notes:
(1) Bosnjak, M., Bochmann, V., & Hufschmidt, T. (2007). Dimensions of brand personality attributions: a person-centric aproach in the German cultural context. Social Behavior and Personality: an international journal, 35(3), 303-316.

(2) Casidy, R. (2012). An empirical investigation of the relationship between personality traits, prestige sensitivity, and fashion consciousness of Generation Y in Australia. Australasian Marketing Journal (AMJ), 20(4), 242-249.

(3) Donnelly, G., Iyer, R., & Howell, R. T. (2012). The Big Five personality traits, material values, and financial well-being of self-described money managers. Journal of Economic Psychology, 33(6), 1129-1142.

(4) Guido, G. (2005). Shopping motives and the hedonic/utilitarian shopping value: a preliminary study. ACR European Advances.

(5) Matzler, K., Bidmon, S., & Grabner-Kräuter, S. (2006). Individual determinants of brand affect: the role of the personality traits of extraversion and openness to experience. Journal of Product & Brand Management, 15(7), 427-434.

(6) Matzler, K., Faullant, R., Renzl, B., & Leiter, V. (2005). The relationship between personality traits (extraversion and neuroticism), emotions and customer self-satisfaction. Innovative Marketing, 1(2), 32-39.

(7) Mooradian, T. A., & Olver, J. M. (1997). “I can't get no satisfaction:” The impact of personality and emotion on postpurchase processes. Psychology & Marketing, 14(4), 379-393.

(8) Myers, S. D., Sen, S., & Alexandrov, A. (2010). The moderating effect of personality traits on attitudes toward advertisements: a contingency framework. Management & Marketing, 5(3), 3.

(9) Myszkowski, N., & Storme, M. (2012). How personality traits predict design-driven consumer choices. Europe’s Journal of Psychology, 8(4), 641-650.

(10) Nevid, J. S., & Pastva, A. (2014). “I'm a Mac” versus “I'm a PC”: Personality Differences between Mac and PC Users in a College Sample. Psychology & Marketing, 31(1), 31-37.

(11) Ranjbarian, B., Forghani, M. H., & Ghafari, M. (2013). Personality traits and the use of word of mouth communication as a source of travel information among inbound tourists who visited Isfahan. International Journal of Academic Research in Economics and Management Sciences, 2(3), 20.

(12) Sandy, C. J., Gosling, S. D., & Durant, J. (2013). Predicting consumer behavior and media preferences: The comparative validity of personality traits and demographic variables. Psychology & Marketing, 30(11), 937-949.

(13) Wood, S. (2012). Prone to progress: Using personality to identify supporters of innovative social entrepreneurship. Journal of Public Policy & Marketing, 31(1), 129-141.

Download The 7 Pillars Of The New Customer Loyalty to define the foundations on which to build your engagement and loyalty strategy, create innovative experiences and establish a lasting and valuable relationship with your customers.

One-to-one marketing is a strategy of customer relationship management that relies on the personalization to foster customer loyalty and make a better return on marketing investment.

The idea behind it is that one size doesn't fit all when it comes to communication; so, treating each person differently is essential to be convincing, persuasive, and effective. To empower your strategy, in fact.

This is true between Brands and customers as much as between human beings. But, while people's capability to adapt their communication depending on the interlocutor is potentially endless, determined by their social and empathic skills, Brands often do not have this ability.

To some extent, this is due to what kinds of data Brands possess about customers, which are incomparably lower - in the number and types - compared to those that people have or can get.

“Demographic and behavioral information only give marketers part of the story they need to effectively segment a customer base. The problem with both of those types is that they do not tell us why people are doing things, which, as marketers, is the most important thing for us to know.” (Susan Baier)

By using only socio-demographic data, all customers that fall in a specific category (i.e. new moms, Millennials, Londoners) would be marked identically. These are necessary information but, taken alone, will lead you to a vague image of your customer, and few indications as to whether they will be interested in your product.

Adding “soft”, subjective and qualitative data to traditional “hard”, socio-demographic data like age, location, and economic status enables the understanding of who your customers truly are and why they make certain choices, so that you could envision what they will appreciate most and how they will behave in the future.

We are talking about customer attitudes, aspirations, values, lifestyle, and personality - so relatively stable information - on the one hand, and about their feeling, perceptions, and emotions - which are temporary and contextual - on the other.

Unlike hard data, soft data are not readily available. To find them, you have to dig a bit deeper into the virtual and physical touchpoints where your relationship with customers takes place.

What are these touchpoints? Here are four that represent optimal sources of soft data.

SOCIAL PROFILE
The social profile is undoubtedly where you can find the most heterogeneous information about a user: images, videos, text posts, self-descriptions, likes, comments and content sharing offer a comprehensive picture of a user's interests and way of thinking, but also of his/her hobbies, lifestyle, and personality.

WEBSITE AND ECOMMERCE
The massive amount of data resulting from a user's behavior on your brand's website and eCommerce can be analyzed and interpreted at different levels of depth. For example, for a fashion brand, information can go from what the user has purchased to what are his/her own style and emotional relationship with clothing.

STORE
If you think that customer analytics have to do only with your digital properties, you are wrong! By recognizing biometric and audio cues with in-store analytics solutions, you can identify customers’ in-the-moment feelings and state of mind.

For example, facial recognition technology and GSR sensors can be used to show:
• What areas of your store are most engaging
• Whether and when customer feel stressed or disengaged within your store
• What products and elements are most appealing
• What emotional reactions your store layout and your shop window generate

CONVERSATIONAL INTERFACES
Today they are almost exclusively employed as customer support tools, to answer simple questions and provide guidance in well-circumscribed domains, but conversational interfaces (the so-called “chatbots”) can potentially become much more.

If put in the role of "virtual interviewers", they become a new tool to perform market research, both quantitative - by administering a structured questionnaire - and qualitative - applying natural language processing to open questions.

What is important to be aware of is that your online and offline properties can offer much more insights than you already collect, and these insights can help you build a picture of your customers as "people", not just consumers.

Moreover, analyzing these soft data with artificial intelligence techniques enables you to build predictive models of consumer behavior and individual traits. Then, applying them to your content delivery system allows you to personalize messages, offers, and experiences based on the unique features of each customer, thus taking your one-to-one marketing to the next level.

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Download The 7 Pillars Of The New Customer Loyalty to define the foundations on which to build your engagement and loyalty strategy, create innovative experiences and establish a lasting and valuable relationship with your customers.

We are not always rational beings. Most of the times, we make decisions on an irrational basis, and afterward, we look for logical explanations to justify them.

The same as consumers. Our emotional states and moods play a fundamental role in determining our preferences and choices so that leveraging on these subconscious drivers becomes an excellent way for marketers to promote desired, more valuable behaviors.
In this scenario, nudging may make your marketing more powerful as it shifts the focus towards subtly creating new habits rather than explicitly asking consumers to do something with the promise of 'extrinsic' rewards - usually financial - such as discounts or prizes.

Most of you probably already know what 'nudging' is: a method that uses positive reinforcement and indirect suggestions to influence people's behavior, thus making a certain choice easier than an alternative path without the person actively being aware of it.

But, perhaps, fewer know what nudging is NOT:
- A substitute for marketing, which compliments but not replace. Simply put, marketing makes the need salient and creates the desire while nudging facilitates the follow-through.
- A way to mislead or confuse the consumer. Instead, it should be transparent to be effective.
- A trap or a manipulation, as opting out of nudging should be as simple as the tap of a button.

If McDonald’s employees are trained to offer only medium or large options to customers when taking orders for drinks and desserts and emit the small alternative unless the consumer explicitly asks for it, this is a 'bad nudge'.

We see a lot of bad nudges in advertising, sales, and human relations in general.

Good nudges, on the other hand, are those that benefit the person - whether it is the consumer or citizen - not (only) your business. And there are countless examples out there too: many schools in the USA are using nudging to move students towards healthy choices, as well as to improve learning and academic outcomes; some virtuous companies are applying similar strategies to promote a safer workplace culture; and the UK government has its dedicated Nudge Unit to encourage people to make better choices for themselves and society.

So, how can you harness the power of good nudge to grow your business too? Look at these 3 examples of easy-to-implement strategies.

COGNITIVE EASE

It is pretty intuitive. Our brains are lazy, and we are less likely to do something if we think it’s going to be hard – whether it’s losing weight, quitting to smoke, buying a product or signing up for a service.

One major reason is that perceived difficulty undermines people's self-efficacy - the belief in someone's capacity to execute behaviors necessary to achieve specific goals.

On the contrary, the perception of ease can be a powerful nudge towards engagement and purchasing, as it enhances consumers' self-efficacy and their intention to move on.

This way, Zipcar managed to go over a major barrier to car share use - the belief that shared cars are scarce and hard to find - by subtly showing to users on its website's map how easy a Zipcar is to find and use.

OPTION RESTRICTION

It may seem counterproductive, but streamlining your offer can help you increase conversions as you nudge customers towards making a decision, rather than being paralyzed by too many options.

For example, having too many social share buttons in a webpage or too many form fields in a drop-down menu cripples users' decision making, thus decreasing conversions.

The same happens in the offline world. An experiment conducted by the New York Times in a grocery store on two different Saturdays found that, after exposing 24 different flavors of jam on the first day and only 6 on the second day, purchases increased from 3% to 30%, meaning that the store sold 600% more jam by just reducing the set of options.

INTERNAL CONSISTENCY

Once we make a choice or take a position, we feel the need to behave consistently with that commitment.

That is notoriously what door-to-door salespeople rely on: they ask a series of 'easy-to-answer-yes' questions (such as ‘Do you think that a more comfortable bed could improve the quality of your sleep?’) and, once you’ve said yes to one, it becomes harder to say no to the next. They managed to get in; that's why this technique is called 'foot-in-the-door'.

Petitions rely on the same principle because agreeing to take part sets people up to make a more significant commitment further down the line, from a simple signature to event participation and financial support.

Nudging works most effectively when it is used for good, creating a “win-win” situation for both companies and individuals.

We've seen examples here that make one thing clear: nudging holds the potential to move the marketing paradigm towards a proper understanding of the subconscious drivers of consumer behavior. But it is equally clear that it works most effectively when used to create a win-win situation for both companies and individuals.

If this belief becomes a premise, the current distinction between good and bad nudging will turn into a separation of what is nudging from what is not. And naturally, this is our hope.

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Blockchain is certainly one of the most hyped words of the last couple of years. Everybody is talking about blockchain - often confusing it with the Bitcoin - and how this technology may change our world, and the way we do business, in the next future.

Decentralization, transparency and ledger immutability are among the promises this disruptive technology intends to fulfill. At the same time blockchain technology is still in its early stages of development. This is the first in a series of articles dedicated to this fascinating - but in some respects still very obscure - topic.

Among many blockchain networks already live, Ethereum is surely one of the most interesting and promising. From a technological standpoint Ethereum has been praised also by the Chinese Government in a recent assessment of blockchain networks.

Ethereum is a decentralised virtual machine empowered with blockchain technology on which developers and companies will deploy smart contracts and has the potential to become one of the cornerstones of 2.0 web architecture.

One of the major obstacles faced when analysing blockchain networks is that in most cases there aren’t comprehensive reports that take into account all the primary/material aspects required to assess multidisciplinary architectures such as Ethereum (IT, financial and legal analysis among others).

Many different elements shall be taken into account (such as the ecosystem the relevant blockchain network intend to deploy, the composition of the development team and the use of the funds raised in the context of the ICO) in order to have a comprehensive and useful framework to understand such projects.

Furthermore, following the issue of the white paper, many projects rely on blog posts, webinars and interviews to inform their communities about the progress in the roadmap; gathering and reshaping the information in an easy-to-read document is certainly not an easy-to-do task.

If on the one side one of the most common buzzwords among the blockchain / cryptocurrency community is “DYOR” (do your own research) on the other side most of the potentially interested people and companies do not have the time, knowledge and/or resources to do their research on a myriad of projects. In fact, DYOR means to carry out your own due diligence for each project, and if due diligence is not your core business it is likely that this will take a lot of time and effort.

Black Swan DAR is issuing a series of professional reports on blockchain networks that focus on smart contract deployment (such as Ethereum). Due diligence is an investigation and analysis activity carried out by third party independent professionals to evaluate risks and opportunities underlying a transaction.

All the reports are drafted under the same framework, in order to make comparative analysis easier and intuitive. The Ethereum report is divided in 10 different sections related to, inter alia, the ecosystem, the token and its function within the blockchain network, the team, the use of proceeds from the ICO, strategic partners, etc..

The first section of the report is an executive summary, in which the most significant issues and red flags arose out of the due diligence process are gathered. For example, with respect to Ethereum, Black Swan DAR notes that:

(i) Ethereum is an open source multi-layered project which purpose is to create a flexible and distributed platform for decentralized applications (so-called dApps) and smart contracts; the project is open source and is community-driven, with the Ethereum Foundation acting as the leader.

Ethereum combines a generalized peer-to-peer networking platform with a blockchain architecture to deliver a decentralized consensus-based, full-stack platform for developing, offering and using smart contracts and dApps. In order to achieve the flexibility required to deploy smart contracts of any kind Ethereum has a built-in fully fledged quasi-Turing-complete programming language;

(ii) the Ethereum framework includes several different components that, together, are the foundational layer for smart contracts deployment. Among the core components of the framework it is opportune to name, among others, the cryptographic tokens, the address system, the network of validators (miners), the consensus algorithm, the blockchain ledger and the Ethereum virtual machine;

(iii) as Ethereum is a general purpose, programmable, blockchain network, its reference market is the aggregate market for all blockchain applications, including dApps and smart contracts that may be developed over time;

(iv) scalability is perhaps the main issue related to blockchain projects, including Ethereum. The scalability issue was envisaged to be solved in 2017 with the implementation of the PoS (proof of stake) consensus algorithm. Unfortunately, the debate about whether to proceed with PoS and how to build the consensus algorithm is still open, and there is no clear solution planned for the road ahead.

Other sections of interest are surely the section related to the Ethereum ecosystem, in the context of which a thorough analysis of the project is carried out, the section related to the token, in which the function and value of ETH are explained, and the section related to the strategic partners of the projects, useful to understand which players are entering the playing field to support Ethereum.

It might be a breakthrough technology but it is safe to say that, today, the blockchain looks like teenage sex: everyone talks about it, nobody knows how to do it, everyone thinks everyone else is doing it and so claims to do it. These free reports can help you understand what the fuss is all about, and how you can do it safely and productively.

DOWNLOAD THE ETHEREUM REPORT

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