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In the past two decades, there have been dramatic shifts in thinking around how best to engage customers, culminating in today’s obsession with personalized omnichannel marketing, sales and customer service. The phenomenon is not new (Proctor & Gamble introduced the “First Moment of Truth” in 2005), but recent technological advances have prompted organizations to re-examine whether they are prepared for this next wave of innovative engagement
Consider the last time you visited a bricks and mortar store. Was it a pleasant experience navigating through the crowded aisles of a grocery store, attempting to read nutritional information on the back of packaged goods? Was it uplifting to try on apparel that did not fit well and magnified all of your physical imperfections in the full length mirror of a closet-sized fitting room? Although anecdotal in nature, these examples illustrate why retailers are investing so much in redefining their in-store experiences, from wine bars in grocery stores to innovative fitting rooms built to provide data-driven white glove service.
Now consider the last time you visited a big box retailer. How much time did you spend in the store? Did you end up buying more than you had planned to purchase? Did you end up walking through multiple aisles on your way to checkout? Of course these in-store layouts are a product of careful planning designed to increase impulse purchases and add-ons, premium items that are often priced to cover loss leaders marketed to get customers in the door. Costco loses an estimated $30mm-$40mm USD annually on their rotisserie chickens (priced at $4.99USD, cheaper than an uncooked chicken), a small price to pay to entice customers to make a long commute with the potential to end in the purchase of a new television.
And so retailers find themselves at a crossroad, with proven strategies of pulling customers into a labyrinth of high margin products in a half day shopping marathon on one hand, and precise, data-driven personalized interactions powered by digital technology designed to get people in and out and on with their lives on the other. What’s the right path to choose? The answer is both!
By cultivating a culture of experimentation, testing/measuring and focusing on the needs of the customer, an organization can best position itself to create the next generation purchasing experience at the intersection of its own and its users’ needs (without crossing over into the “creepy zone”). Whether that intersection is in the middle of a hectic day of work and errands or a leisurely shopping weekend will be the real “moment of truth” that organizations will need to challenge themselves to identify and define.