New points of transaction force brands to evolve.
Not so long ago, the point of transaction between brand and customer meant something straightforward and linear. The customer encountered the brand’s product in a physical environment and made the decision to buy it. It was a specific and definable moment of truth that rightly preoccupied marketing minds.
But those days are behind us. The past decade has seen some profound changes in the way brands and consumers engage. These changes, driven primarily by new technology, have fundamentally changed the relationship and shifted the balance of power between brand and consumer.
They have transformed the way brands communicate, putting a stop to the old monologue and replacing it with a complex, multifaceted dialogue; they have dealt traditional advertising a body blow that’s left the industry reeling; and they have given a generation of fresh, agile start-ups new ways to outflank global brands.
Points of transaction are now to be found liberally peppered throughout the complex omni-channel environment in which today’s brands operate.
Increasingly consumers have less physical contact with purchases being delivered to their homes. Big data has added a degree of personalisation to marketing that was previously unimaginable. Siri, Alexa and Google Assistant are on the point of forever changing the way we shop. Shoppers can simply ask Alexa to buy bacon and it will be at your door within a day. And digital technology is already blending the virtual with the physical in numerous irreversible ways.
Some brands are adapting creatively to this new environment, blurring lines between the physical and the virtual, and between marketing and entertainment.
Look at Burberry’s flagship Regent Street store in London, which connects the physical and virtual shopping experience. ‘Burberry World Live’, as the store is called, is inspired by a digital homepage. It’s designed to be navigated in the same way as a website and every product on display is embedded with chips, which activate videos on shoppers’ phones as they browse.
Amazon Go physical stores are using the same technology used in self driving cars to allow shoppers to enter the store select what they want and leave without lining up or paying at the checkout.
L’Oréal Paris Makeup Genius is an app that enables customers to virtually try on the brand’s cosmetic products using their smartphone or tablet. And Red Bull now engages with consumers about so many things through so many channels – from Felix Baumgartner’s record-breaking parachute jump to mountain bike races, live music events, cliff diving and stunt-plane aerobatics – that it’s no longer correct to refer to it simply as an energy drink company. It’s evolved into something bigger and more multidimensional.
To flourish in this brave new world, brands must be willing to make fundamental changes. They must consider replacing the old model of physical stores and traditional marketing with new brand ecosystems. Look at what Nestlé has created with Nespresso. This is not a simple coffee product, it’s an entire system based on proprietary machines and capsules where most of the interaction happens online, supplemented by physical stores that are as much about providing enjoyable experiences and building relationships as selling products.
Specifically, FMCG brands in Asia and Australia need to understand what multiple points of transaction mean for their business model. In Asia, you might be selling in a traditional high frequency store on the street, in modern retail spaces such as Tesco, as well as online. Customers will be using mobile devices as they shop. And the arrival of Alexa in Australia opens up yet more new channels. Coming to terms with this complexity is vital for survival and one of the ways to do that is to ensure your brand creates a consistent perception while at the same time being agile enough to adapt to differing needs at multiple touchpoints. Consumer behaviour in a physical store is very different to the way people shop online.
Consumer goods company Unilever has understood this shift and is implementing a 5C frameworks for marketing which includes: Consumer, Connect, Content, Community and Commerce. The number one Greek Yoghurt brand in the US Chobani is applying this type of approach using striking packaging, destination cafes, foods trucks, events and gym partnerships as a way to engage consumers outside of the supermarket.
This activity provides content for social platforms like Facebook, Pinterest, Twitter, Snapchat, LinkedIn and Instagram. This approach drives trial and conversion to audiences outside the conventional channels.
Brands must look beyond marketing spin to provide something that deepens their connection with customers. No one has done this better than Nike, whose NikePlus scheme now offers members everything from product trials and free shipping to audio guided runs and personalised training plans. Commitment is rewarded by extra benefits such as exclusive products, automatic reservation of styles they’re likely to want based on previous purchases, or even guided meditation sessions.
NikePlus integrates with Apple’s Wallet app too, enabling members to jump the queue and get personalised service at Nike stores and events with the use of a QR code saved in the Apple app. There’s also an inbox featuring the latest Nike news and details about upcoming events near the customer.
It’s a seamless integration of mobile app, in-store features and experience-based benefits that adds up to a compelling case for loyalty.
The brands that successfully evolve to embrace this new paradigm are those that are fundamentally confident about what they stand for and crystal-clear about the ‘why’ behind everything they do.
They’re open to engaging in an honest conversation with consumers and they’re willing and able to change because of that conversation.
Crucially, they’re also able to accommodate all this change without losing sight of the role that’s still played by products in-store and conventional marketing – neither of which is going anywhere any time soon.
No one’s saying this is an easy transformation to go through. But the brands that understand their “points of transaction” better than their competitors will create a value exchange which will provide meaningful connections with customers and commercial success for their business that could barely be imagined just a few years ago.
Originally published on AdNews.