It is no longer enough for shopping to be easy and fruitful. It needs to also be personalized. “What’s marvelous about technology is that it allows for a much more intimate experience—to reach people one-on-one where and whenever they wish. It enables a completely new business model because it allows you to connect in a very personal way,” says Tamara Ingram, CEO of J. Walter Thompson.
Creating a personalized experience rests on customer data, generating the right insights from it and acting on these insights. The regulatory angle of data—exemplified by new laws about customer data protection—is an area of intensive scrutiny and change. No wonder then that for a majority of CEOs (89 percent), protecting customer data is hugely important. But customer data remains an asset which is prone to cybersecurity attacks and privacy concerns.
Julio Hernandez, KPMG’s Global Customer Center of Excellence and U.S. Customer Advisory Practice Lead, sees a debate unfolding over the next couple of years about permission versus presumption: obtaining permission from customers to use their data and meeting customers’ presumption about how this data will be used. Considering regulations such as the European Union’s General Data Protection Regulation, which allow the customers “to be forgotten,” Hernandez believes that companies have the opportunity to engage with customers by asking them what they want.
“A company can surmise what customers may want by looking at their past behavior. But they can also ask you: What do you want, what are you interested in? How would you like to be contacted? There’s an opportunity to engage in the conversation about how to better serve customers. It doesn’t all have to come from black-box analytics,” says Hernandez.
Companies have been gathering and analyzing reams of customer data, and for 93 percent of U.S. CEOs, the investments they have made in trying to personalize the customer experience have delivered the growth benefits they were hoping for. Yet almost a quarter (22 percent) say their companies do not live up to customer expectations for a personalized experience. That is because personalization does not equal relevance. Even if technologies deliver capabilities that allow companies to identify customers and talk to customers one-on-one, what they’re offering may not be relevant.
Many millennials have now been customers for some time, exposing all other customers to their shopping habits and expectations, thus “millennializing” all generations of customers. And yet, these digital natives are still a challenge for companies. Almost half of CEOs (46 percent) struggle with understanding how millennials differ from older customers and with adapting sales and distribution models to fit millennials.
“More millennials are also looking to align with companies that have a higher purpose,” added Rob Arning, KPMG’s Vice Chair of Market Development and Head of Citizenship. “There is a tremendous opportunity for companies to attract more millennial consumers if they consider how they are doing good in the community. Millennial consumers want to support companies that are purpose-driven. And as employees, millennials are looking to work at companies that make a social impact.”
To connect with millennial consumers, Wingstop, a restaurant chain specializing in chicken wings, is advancing digital platforms at an aggressive pace. Customers can ask Amazon's Alexa platform to order chicken wings, place an order on Facebook messenger or on Twitter, and also while in the car, via General Motors’ OnStar platform. “A big part of our customer base is millennial and multicultural, so we tend to lean on technology as our source of innovation,” says Charlie Morrison, Chairman and CEO of Wingstop Restaurants.
Lands' End CEO Jerome Griffith takes a contrarian approach and does not specifically target millennials. “I believe we have a big opportunity to keep marketing to our core target customers, who are frugal and value conscious and want great service and style. I think our opportunity is continuing to attract consumers that have the same makeup as the consumers that we have today,” says Griffith.
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