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Personalization, Privacy and the Creep Factor

Posted by Julia Walker

Wed, Jul 25, 2018

online shopping

You’ve seen it before: a pair of shoes that follow you all the way from Zappos.com to Facebook, or even creepier, when you have a conversation about Patagonia and suddenly, Instagram serves you an ad for their latest down jacket. Today’s marketers don’t have to guess where to place their ads anymore. Instead, they track online behavior to tailor ads, offers, products, and experiences to the specific consumer.

Leveraging online consumer behavioral data for personalization is now a standard marketing strategy, but what are the implications for brands and consumers?

Personalization drives consumer behavior. In fact, 80% of people are more likely to do business with a company if it offers them a personalized experience. Amazon revolutionized personalization when they rolled out their product recommendation algorithm—a feature some attribute to their huge sales increase (29% in the second fiscal quarter) in 2012. And it’s only advanced since then. With the help of AI and big data, brands can deliver highly custom experiences to consumers. Now, personalization spans devices, following you from your tablet to your desktop, and can recommend your next TV binge or anticipate an unmet need.

Personalization can also inspire loyalty, which means a greater customer lifetime value and possible advocacy. With forty-four percent of consumers saying they will likely make additional purchases after a personalized shopping experience, this is a tremendous opportunity for brands to break through the clutter with tailored messaging and offers.

But is there such thing as too much personalization? As brands continue to collect data to better understand and serve their customers, where does the line between service and invasion of privacy begin to blur? InMoment's 2018 CX Trends Report found that 75% of consumers find most forms of personalization at least somewhat “creepy”. And while half of consumers admitted they’d still shop with the brand after a creepy experience, almost a quarter reported it would drive them to a competitor.

The stakes are high for companies collecting customer data: 70% of consumers would stop doing business with a company that experienced a data breach. And this data is exactly what enables brands to personalize their offerings.

So, we’ll continue to see this tension play out across industries—while consumers continue to expect more personalization, brands must deliver tailored experiences without risking the creep factor.

Julia Walker is a Project Manager at CMB and an avid online shopper whose decisions are often influenced by algorithm recommendations.

Topics: retail research, Artificial Intelligence, ecommerce, data privacy

You Are What You Wear: The Rise of Wearables and Customization in the Apparel Industry

Posted by Ed Loessi

Thu, Nov 10, 2016

I’d describe the fashion sensibility in our Boston office as…eclectic. The khaki and button-down/dresses and heels faction (hello Financial Services team!) mingles easily with the flannel and sneakers crowd (hello pretty much everyone else!). Of course, when it’s time to head to a conference or awards dinner, even the most casual CMBer will toss on something that’s appropriate to the occasion and crowd.

For most of us, especially those of us in professional services, our approach to work fashion is deeply influenced by a tension between expressing ourselves and fitting in. This tension finds an analog in two concepts from consumer psychology:

  • Personal Identity: How much a consumer’s relationship to a brand plays into their self-image and self-esteem
  • Social Identity: The sense of belonging or kinship consumers feel with others who use the brand

In recent blog posts we’ve discussed our work with the consulting firm VIVALDI to take a fresh look at their 2010 “Social Currency” concept. We evaluated how 90 brands across five industries fit into the lives of consumers.  Our results revealed seven critical components of consumers’ experience that brands must strengthen to influence the experiences and behaviors that drive engagement, purchase, and loyalty. Chief among these consumer experiences are Personal and Social Identity – which in the apparel industry are exemplified by the rise of customization and wearables.

sc pyramid.png

Customization

To keep up with the generation of customization and Millennial’s preference for personalization, brands now offer customizable products to their customers. Take footwear giant Converse. Converse is a subsidiary of Nike, Inc., which was the best performing brand in our 2016 Social Currency Report (across all industries) with an indexed Social Currency composite score of 120. 

While Converse still maintains its classic white Chuck Taylors, the brand has moved into the customization space to satisfy those consumers seeking personalization.  Customers can personalize their Converse, selecting everything from shoe type, height, collection, color, and size. Even though consumers are still “fitting in” by sporting the notable Converse brand, the personalized shoes also satisfy their need to express themselves.

Although not limited to apparel, the ability to offer customization on a broad and relatively affordable scale offers a tremendous opportunity to support and reflect fashion consumers’ personal identities in particular. [Tweet this!]

Wearables 

Brands that do well are those that continue to find ways to meet the needs of their customers. Enter the rise of wearable technology. Why? Because wearables can enhance both a consumer’s personal and social identity. Let’s again look at Nike. Nike scored 119 in Social Identity in our 90-brand study – highlighting its success in fostering a sense of belonging and kinship among its customers.

Nike entered the wearable space a few years ago with the introduction of the Nike FuelBand. Even though FuelBand had a short life, it was this wearable that got people engaging and competing with other users (even though FitBit was already in the market).

So why is the short-lived FuelBand’s narrative important? Because it underscores Nike’s commitment to finding innovative ways to enhance customers’ personal and social identities. Even though the physical bracelet didn’t work out, Nike remained committed to the wearable tech space by introducing Nike+, an Apple and Android compatible app that connects Nike users to its online fitness community.

And Nike isn’t the only successful brand in wearables. Many other companies that our report looked at are invested in wearable technology, notably ones that have scored high in Social Currency:

Social Currency - fashion.png

Notice the top scoring brands we measured are each engaged in wearable tech. Coincidence? I think not.

It’s a consumer’s world and brands are just living in it

A key finding of our research (you can download our free report on apparel here) is that consumers are loyal to brands that fit seamlessly into their lives and help them express who they are, what they like, and who they feel connected to. For example, does a brand reinforce a consumer’s self-image? Is a brand fostering a sense of belonging or kinship among its customers—a hallmark of true consumer-centricity? If brands can answer “yes” to the above, they’re doing something right.

 

Ed is CMB's Director of Product Development and Innovation. He thinks there is a game-changing product or idea within everyone, and it’s his job to dig it out. You can share ideas with him @edloessi.

Get our FREE apparel report and learn how Social Currency can help brand transformation:

Get the Report

And check out our interactive dashboard for a sneak peek of Social Currency by industry:

 Interactive Dashboard

Topics: brand health and positioning, customer experience and loyalty, retail research, Social Currency

How Top Beer Brands Brew up Social Currency

Posted by Ed Loessi

Thu, Sep 08, 2016

Last month, we released the results of our 5 industry, 90 brand study: Business Transformation through Greater Customer-Centricity: The Power of Social Currency—a collaboration between CMB and VIVALDI. In the coming weeks we’ll release 5 industry specific reports covering Beer, Fashion, Airlines, Automobiles, and Restaurants. This week we’re taking a closer look at 14 of the top brands in the Beer Industry in our new report: The Power of Social Currency: Business Transformation in the Beer Category.

For those of you who have been following these posts, you’ll recall that the genesis of this research was VIVALDI’s Social Currency concept. Introduced in 2012, Social Currency is a framework for understanding brands’ ability to fit into how consumers manage their social lives in today’s social, digital, and mobile context. Measuring and understanding the 7 dimensions (below) of Social Currency are critical to building strong brands in today’s market. The age of the brand ambassador is over—consumers don’t act in service of brands, they act in service of themselves—interacting with and promoting brands that help them express themselves.

SC_Pyramid.png

The wide world of beer

By most industry statistics, Americans consume just north of 6 billion gallons of beer every year. Thousands of varieties of beer are crafted in over 3,400 breweries across all 50 states. Although 90% of the beer is produced by just 11 companies, there is still an immense amount of brand building, marketing, advertising, and storytelling aimed at beer drinkers. Truthfully, this is the stuff of nightmares for brand builders. It’s one thing to be in a competitive market; it’s an entirely different thing to be in a market with so many companies trying to build a brand for a product that pretty much looks the same when poured into a glass. Whoa now! I’m sorry if I’m offending the beer connoisseurs, I realize that I’m ignoring the the vast differences between hoppy IPAs, chocolatey stouts, and Belgian Saisons, but you get the idea.

If you’re going to build a strong brand for beer today, you need to understand the personal and social identities of the consumer. You need the customer to know who the drinker of that beer is – is s/he a quirky creative, independent thinker, old-school beer and barbecue, or the person looking for that next beach party? From that, you need to create the social opportunities and content that allow each of those consumers to express themselves through your brand.

Each of the five brands (pictured below) that topped our measure of Social Currency, have established a clear picture of the person who drinks their beer and they understand why that’s important. Each brand has worked hard to provide engaging social and content opportunities for their consumers.

top5beers.png

How are these companies using Social Currency to build their beer brands?

Sam Adams: The Boston Beer Company’s co-founder, Jim Koch, embodies the brewery’s spirit of independence. This independence has manifested itself in the name chosen for their famous lager – Sam Adams Boston Lager, and it has been a part of the brand message since the very beginning. Their most recent commercial “Stay Independent” keeps to that message and entices the independent thinker to become a drinker of Sam Adams. The personal identity of the Sam Adams beer drinker is very clearly the independent thinker, not your average corporate beer drinker.


Budweiser:
The “King of Beers” – if anyone would have cause to worry about the numerous competitors in this market, it’s the King. But, this King still has his crown. Long known for its unique Super Bowl ads, Budweiser came out of the gate this past year with a bold attack on craft beer drinking. Budweiser reasserted its beer as “not craft”, “not imported”, “not small”, and “not backing down”. In delivering this message, against the powerful backdrop of its famous Clydesdale horses, it also reasserted the identity of its target market, the no-nonsense, deeply rooted and not swayed by the trends of the day beer drinker. This identity is strong and reliable.

 
Corona: Simple message - sand, sun, and lime wedges! Corona has long been associated with those beautiful summer days being pursued by happy people, looking for a place to relax, and have fun. Corona has used these simple messages extremely well and has built a perfect image of the personal identity of someone who drinks Corona.


The beer industry is unlike other consumer industries. It has a concentrated power base regarding brewing capacity, but its brand managers, marketers, advertisers, and social media teams must deal with literally thousands of brands in the form of small brewers competing for the same customers. Understanding how to use Social Currency is of vital importance in building a brand. By crafting messages that align with consumer’s personal and social identity, and creating social and content opportunities, beer companies can differentiate themselves in this crowded market. So pull up a stool, grab a pint, and learn how Social Currency helps insights professionals and marketers create content, and share the messages that support consumer identity—spurring engagement, purchase, and advocacy.

Ed is CMB's Director of Product Development and Innovation. He thinks there is a game-changing product or idea within everyone, and it’s his job to dig it out. You can share ideas with him @edloessi.

Download the beer report and let us show you how Social Currency can enable brand transformation:

Get the Report

And check out our interactive dashboard for a sneak peek of Social Currency by industry:

Interactive Dashboard

 

 

 

 

 

Topics: brand health and positioning, customer experience and loyalty, retail research, Social Currency

Getting Virtual at IIR Omnishopper: The Future of Retail

Posted by Julie Kurd

Tue, Jul 26, 2016

cy.pngAt this month’s IIR Omnishopper conference, all anyone could talk about was Pokémon Go.  Several research suppliers told me they’d downloaded it and everyone was marveling at its stellar adoption and usage rates.  I had my 13 year old son’s account on my mobile device, so I began the conference naively thinking ‘I’ll go out before the sessions start and catch a few Pokemon for him.’  I couldn’t stop, and despite the fact that CMB works with leading gaming companies, and we’ve got more than a few die-hard gamers on staff, I don’t consider myself a gamer.

How had I morphed into Cheffen Yobs from the moment I began to play? The answers are a case study in consumer motivation:

  • Primary motivation/goal: My initial, primary motivation/goal for Pokémon Go, of course was getting more creatures and points because why not? It was a hot new marketing opportunity and I anticipated being able to talk about it over lunch at the conference (the game rates high on helping me build my social and personal identity)!
  • Secondary motivation/goal: I quickly learned that Pokémon Go has history embedded in each stop, so I started learning interesting things about the city of Chicago. This motivated me to alter my destinations, because I was curious about a particular building or statue. I was looking in the ‘corners’ of Chicago city center, and I was discovering new art, new monuments, and new bridges.  Over the course of the 3-day conference, I walked through several great sections of Chicago. I went to about 12 hours of conference material but I set my clock to wake up earlier to play that game.  Typically at a conference I fly in and then I sit.  And I sit. And I sit.   
  • Unintended benefit: Many of my colleagues share their gamified solution to fitness at our office, and they push each other to exercise more, but my life is hectic and I just don’t add fitness to my priority list. Imagine my surprise when one of the unintended benefits of my trip was that I actually walked 10 km in a level of heat that I can’t even describe, and I didn’t even know I had walked so much until I got home and my son told me!

Questions and excitement about Pokémon Go also found their way into the conference sessions.  The Mall of America’s Emily Shannon talked about the Mall’s digital strategy. There’s the mundane—assigning every bathroom a different text number so you can text that the bathrooms are dirty, and there’s the delicious—hungry shoppers can ask ‘where can I get a great ice cream?’ and because the Mall of America has 12 ice cream stores, the Mall staff ask further questions about the ice cream preference (via text) and deliver an exceptional experience.  Shannon said that the Pokémon Go was definitely delivering the excitement and enthusiasm that are central to the Mall of America’s value proposition, so they were meeting and selecting strategies to increase engagement and delight among mall goers.  In the week following the conference, the Mall of America has launched a Trainer Lounge and tips for playing Pokémon Go at the Mall. 

The conference was exactly about engaging consumers along the path of discovery through purchase and repurchase to loyalty and advocacy.  Each presenter had a different take, and each brought us through their approaches, from full body Virtual Reality to eyeglass technology, cash register data, landscape assessment, qualitative consumer diary, strategy platforms, ideation, and survey trends.  Many speakers, including Ron Wetklow of Treasury Wine Estates, to Scott Young of from PRS IN VIVO, and Laura-Lynn Freck, of Red Bull talked about digital engagement driving physical engagement. 

In the consumer insights industry, engagement, primary and secondary motivations and unintended consequences are central to our work.  In the weeks since the conference, I’ve logged in a few times, but I don’t feel motivated to play.  Why?  1) the history of my suburb just isn’t that exciting, 2) there are only a few stops near my house and it’s not that interesting to go to the same spot 10 times 3) thanks to in-group norms—I’m not going to stand outside the library with 10 kids under 18 years old to play a game on my mobile device because they’re ‘not my tribe’. But, combine the game with my frequent traveling and make me learn stuff on my timetable and maybe even talk to people and I’ll play every time.  It’s been 10 days since the conference and I see the game everywhere, my bet is on the brands who can “catch” the opportunities that come from these uber-engaging tech-enabled phenomena.

Julie blogs for GreenBook, ResearchAccess, and CMB. She’s an inspired participant, amplifier, socializer, and spotter in the twitter #mrx community, so talk research with her @julie1research.

Did you miss our recent webinar on the power of Social Currency measurement to help brands activate the 7 levers that encourage consumers to advocate, engage, and gain real value? You're not out of luck:

Watch Here

 

Topics: technology research, consumer insights, conference recap, customer experience and loyalty, retail research

Getting Your Customers Beyond Price

Posted by Cara Lousararian

Tue, Mar 15, 2016

online_shopping.jpgCall me lazy or call me smart, but I now do nearly all of my gift shopping online. Shopping online is easy, but it also brings up a whole new question around loyalty to specific brands and retailers. Five to ten years ago, I felt like getting the best price/deal was more important to me than shopping for specific brands or at specific retailers. Maybe it’s because I’m older, earn more money, or buy for more people (hello, in-laws!), but I’ve started considering other things than just price, such as:

  • Return policy timeline. A 2 week return policy doesn’t cater to the super-organized planners (like me) who want to buy presents well in advance
  • Ease of returns. A gift that can’t be easily returned is an inconvenience, so I look for retailers with hassle-free returns
  • Product warranty or guarantee. Sure things break, but I definitely don’t want my recipient to pay for a replacement

Because you can’t feel, touch, or smell products that you buy online, other factors play a much more important role in the decision making process—I’ll pay a higher price for something just because I know the store and its policies are convenient for me and those that I’m shopping for. We’ve all gotten that ugly sweater without a gift receipt. No one wants to be “the bad gift giver” (sounds like a Seinfeld thing, right?).

Two retailers who get my business, despite the higher price tag, are Nordstrom and L.L. Bean. Here’s why they have my loyalty:

  • Last Christmas, I participated in a Secret Santa gift exchange with my husband’s family, and I was assigned my husband’s 25-year-old cousin. While I could have just bought him a Patriots t-shirt, I wanted to be more creative and thoughtful. I went to Nordstrom.com because of their superior return policy—they take anything back at any time. This allowed me to take more of a gamble on choosing his present because he could easily return or exchange it if he didn’t like it.
  • My sweet rescue dog, Nala, has an obsession with trying to “soften” her bed (i.e., paw at it repeatedly with her sharp nails). I’ve had her for 6 years, and I have lost count of the number of beds I’ve had to buy to replace ones that she’s ripped to shreds. I took a look at L.L. Bean’s dog beds because I know the store’s return policy and product guarantee rivals most other stores. I had a bit of sticker shock when I realized I would be spending $200 on a bed for my dog, but the extra expense was worth it knowing that I can return or exchange the bed at any time for I know that L.L. Bean will stand behind the product and will replace it at no additional cost to me. 

Online shopping has made it easy to switch brands/retailers with the click of a button, and this undoubtedly has an impact on customer loyalty. In this world of information overload, it’s becoming harder and harder for brands and retailers to truly differentiate their offerings, especially when they lack a captive audience in their physical store locations. 

This is where discrete choice modeling and/or segmentation can come in handy—especially when there’s a need to dive deeper into uncovering purchase drivers outside of price—since most consumers will tell you they want all of the product’s bells and whistles for the lowest possible price. At CMB, we spend a lot of time in the up-front design phase, as well as in the analysis phase, combining the art and science of research to help bring the customer journey to life. This is where proper questionnaire design trumps speed as we strive to keep the story and research insights at the forefront. 

How are you prioritizing customer convenience and experience?   

Cara is a Senior Research Manager at CMB and plans to buy stock in Nordstrom and L.L. Bean after reviewing her recent credit card transactions.

Our new Consumer Pulse study explores Millennial attitudes and behaviors toward banking and finance.

Download the full report here!

Topics: customer experience and loyalty, market strategy and segmentation, retail research