The era of product nonsense is over – make eye contact with your custo

May 17, 2019

Every week there is a flood of financial news in Finland and abroad about clothing stores, toyshops, shopping centres, city centres, brands and specialized chains that have run into problems. These news stories often give online retail and the changed behaviour of shoppers as the reason for the problems.

The focus is in the wrong place and the battle is being fought on the wrong fields. The true struggle Is for customers’ souls. This struggle was begun years ago by Amazon, who realized that customers can be reached and won over faster online. The more the customers shops on Amazon, the better Amazon knows the customer. The store understands the customers’ needs, offers something appropriate for what they have selected, and sends them personalized marketing messages.

The best brands have realized that the Internet allows them to reach customers worldwide. The Internet can be used to build dialogue consumers faster, create meaning and get them to build your brand. Where necessary, brick and mortar stores have been placed in a role where they can compensate for the weaknesses of online retail. This can help in making products available more quickly and in offering better, more personalized customer service. Regardless of this the order is: first online, then physical stores.

Four changes in retail

1. The direct to consumer trend is steamrolling ahead

Thanks to globalization and the internet, supply and competition have grown rapidly. All products are available all over the world. Brands are finding it more difficult to be an authentically significant part of consumers’ everyday life. According to Havas Media’s annual global Meaningful Brands survey, 77% of brands could disappear overnight and make no difference to consumers. Brands have remained behind distribution channels without a touch or dialogue with the end customer.

Now brands have realized, that with the help of e-commerce they can begin to have a dialogue with consumers without other channels suffering. The best brands use e-commerce to increase their customer numbers and credibility in such a way that sales have grown in all channels, with resellers also benefiting. And that’s not all: consumers have been made part of the brand story. With the help of a direct dialogue, customers are part of the product development.

2. Needs-based marketing is killing product-centricity

Thanks to the competition, products are finding it more difficult to stand out with their features or price. Completely different things are becoming consumers’ choice criteria – ecology, meaningfulness and service. People want and need service. Choosing the right product for my needs and values is one of the most important services a seller can offer.

Indeed, marketing has changed from just marketing to deeds and customer experience. For example, the British company Simba does not just sell mattresses, but a better night’s sleep.

3. Brands go where customers already are

It’s no longer enough for brands to get customers to come to them: brands have to go where customers are. In the physical world, a range of experiential events are becoming more popular. Online marketplaces such as Amazon, Alibaba and Rakuten are taking over online sales and social media is beating traditional media. Brands can benefit from this by making their products and services available through these channels.

Clothing and interior brands have, for example, taken over Instagram, where customers can shop straight from the images. The store is also entering commodities. Inside games you can buy fan products, in cars you can buy additional parts and services, and so on.

4. When the online and physical worlds meet, customer experience is decisive

Technology brings e-commerce closer to physical reality. With a camera phone, a product in an online store can be turned into a 3D image in its own physical reality. A vase on sale on an online store can be placed on the consumer’s own table and viewed from different angles. In everything, the aim is to enable an excellent customer experience on the customer path all the way from information searching to the last mile of delivery. A fast push towards a transaction will not lead to good results when the goal is to decrease the client acquisition costs and increase the customer lifecycle value.

Are you still in the game?

If you start to act now, you will be among the winners. Every brand and company has to wake up and take part in the struggle for customers’ souls by listening, understanding and serving them. The time of product nonsense is over.

Speed and agility demand new competence, content, services, courage and technology. Fortunately, technology has developed and become cheaper thanks to SaaS programs. The time of never-ending projects is over. Companies now invest more in business, for example, into customer acquisition, logistics and services. Thanks to the competition, the costs of customer acquisition and retention have become a significant factor. Keeping them at a reasonable level requires a new kind of competence.

Over the last few years, we have thankfully managed to change technical online store projects into company-wide reform projects. Leadership, value proposition, message, operating models, channels and services have changed as well, meaning the brand has started to bloom and grow in a new way.

Where do I start?

Go to your company’s page and look at it with your customer’s eyes and mindset. The task of your site is to make it easier for the customer to buy and to increase sales, whether that’s online or not. Try to understand which customer solutions your company solves better than its competitors. Look at the general look, product texts and pictures. Think about whether your message is clearly phrased and understandable – do your message and the pictures on your website arouse feelings?

And most importantly, do all this on your phone. Only then can you give your opinion about how well it serves your needs as a customer. Did it take away all the fears and barriers to buying? You know that if it didn’t, you need to do something.

Juha Harju, CEO & founder, Woolman