Tech Trends 2017: Getting Personal with Consumers
It’s quite possible that no consumer goods company gets more personal with its consumers than Nestle Purina.
Last spring, the Just Right by Purina brand added new capabilities to justrightpetfood.com, which since 2014 has let dog owners answer questions (age, activity level, breed, body condition) to create a personalized food formula for their loved ones (via proprietary algorithms and human experts).
To get even more “sophisticated” with the recommendations, Purina began gathering information about the animals’ stool color. “Pet owners … can learn a lot by doing a quick evaluation” before disposing of the poop, the brand explained at the time.
Brands are learning a lot about their consumers these days, thanks to a plethora of digital tools that make both interacting with them and analyzing the resulting data about them a lot easier than it was even a few years ago.
Marketing has been the most common first “fix” on the digital journey for most CGs. In CGT’s survey, 66% of companies said they’ve already initiated digital transformation in the marketing space — the only functional area tackled by more than half of respondents. Supply chain came in second at 49% (see Figure 8 in the Overview section). Consumer engagement is also a priority at more companies (65%) than any other enterprise function (see Figure 12 in the Overview).
“We rely heavily on data to inform every aspect of our business, from product development to the digital experience,” says Dave King, chief technology officer at Madison Reed, a 3-year-old “online hair color company” whose products are free of the chemical additives typical in the category.
Digital consumer engagement centers on “Madi,” a proprietary chatbot that gives color consultations just as a human would do in a salon. Consumers submit selfies of their face and hair, answer a few questions and get a color recommendation. In 2017, the technology became a key component of a new in-store experience at retailer Ulta.
In mid-2016, Nestle Waters North America unveiled the Consumer Engagement Center, a digital learning lab housed in the New York City offices of marketing-solution partner Salesforce.
At the “CEC,” Nestle tracks the brand and topical conversations taking place in the social world and identifies relevant ways to contribute to the dialogue.
“Digital marketing is no longer simply about reach and frequency. Marketing is evolving into personalized consumer experiences, and our mission in this new reality is to better understand consumer needs, behaviors and trends,” explained Nestle Waters chief marketing officer Antonio Sciuto. “We are moving beyond building databases to cultivating communities.”
Jenn-Air understands that consumer engagement no longer ends at the purchase. The appliance maker’s ovens are equipped with IoT-enabled connectivity to an app that lets users check “doneness” and even start the cooking process remotely. They’re also compatible with Nest thermostats and boast a “Culinary Center” that uses advanced algorithms to determine ideal cooking times.
In early 2017, the app was upgraded to add voice–command capabilities through Amazon Alexa. “We’re getting closer to achieving frictionless, barrier-free cooking and entertaining,” Jenn-Air marketing director Brian Maynard boasted.
HarperCollins Christian Publishing joined the ranks of brands launching voice-controlled “Skills” for Alexa with “Devotionals,” an app presenting a daily audio clip culled from the works of the book imprint’s author stable.
“This is an unprecedented opportunity to gain new exposure and awareness around our authors’ great content … with a simple voice command,” said Sally Hofmann, HarperCollins’ senior vice president of direct-to-consumer sales and marketing.
Users who are especially inspired by particular clips can simply tell the transactionally capable Alexa to add the related books to their Amazon.com shopping carts.
The most overwhelming reason for this trend is pretty simple: consumers forced the issue. Once their target audiences began adopting websites, search engines, social media and ultimately mobile tools as key parts of their lifestyles — especially after they also began shopping and buying on-line — product manufacturers had no choice but to follow.
That’s also likely the biggest reason why engagement-enhancing tools such as cloud-based architecture, mobile apps and artificial intelligence/ machine learning were identified as the technologies most critical to organizational transformation (see Figure 11 in Overview section).
“To win in this reality, you need to always start from the consumer understanding,” Nestle Waters North America chief marketing officer (and CGT’s 2016 “CMO of the Year”) Antonio Sciuto told Ad Age recently. “Beyond that, you will need technology. It is the key to really make things happen.”
The ultimate goal is a deeper understanding of consumers that will let CGs customize not only marketing messages and promotional offers, but also product assortment and even the products themselves.
Getting all the way there requires companies to work back from the consumer-facing engagement tools they’ve employed for years to implement technologies and systems that will help them collect, analyze and institutionalize the data they’re collecting. It requires a consumer-centric mindset throughout the enterprise that will be fueled in large part by marketing-driven insights.
To wit: A mobile app that lets brands send relevant offers to consumers is a very nice marketing tool; an AI-enabled app like the Olay Skin Advisor, which uses selfies and survey answers to conduct skin analyses and make relevant product recommendations — then aggregates the incoming data to help Procter & Gamble’s future brand planning — has become critical to success.
Once marketing is done with the data, the next step “backward” is to connect the rest of the supply chain to provide insights to customer marketing, demand planning, product development and a host of other organizational needs (as this report covers in other sections).
MARTECH VS. MARKETING
An estimated 27% of marketing budgets are now spent on technology — which is more than the 22% devoted to paid media, according to a recent Gartner study. That signals a major shift in industry dynamics that is disrupting the status quo: Nestle Waters, for instance, has been using the Salesforce Marketing Cloud to bring social media tracking, community management and consumer market research in-house rather than farming the work out to traditional agencies, Sciuto told Ad Age.
Traditional agencies are responding: Momentum Worldwide in September unveiled a partnership with IBM Watson to launch Shpr Solutions, a proprietary platform offering “predictive and real-time analytics” to inform shopper marketing programs.
One future watchout will be to avoid the potential pitfall of relying too much on technology, automating so much of the engagement that personalization becomes far too impersonal. Real brand loyalty won’t be built on programmatic ad campaigns and relentless chatbots.
Meanwhile, consumer goods companies must also plan for “conversational commerce” in which consumers increasingly rely on their IoT-enabled devices to make some of the purchase decisions. “What will it be like when we have to market to the personal assistant?” SapientRazorfish’s David Hewitt asked at an industry conference last spring.
Perhaps only Alexa knows the answer to that one.
TABLE OF CONTENTS
- Tech Trends Report 2017: Transforming to the Digital Enterprise
Introduction & methodology
- Tech Trends Overview: High Expectations, Middling Progress
Everyone knows what must be done. Now, they just have to do it.
- A New Dawn for Analytics
New data sets require new skills and new processes.
- Redefining Trade Promotion
Is cognitive computing the key to the future?
- Moving to Outside-in Supply Chain Processes
Digital tools can transform every step in the system.
- Marketing: Getting Personal with Consumers
Digital tools make the promise of personalized engagement real — and required.
- NPDI: Enhancing Products, Improving Process
Transforming traditional methods of new product development.