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Insight and critical customer-centric actions to drive remarkable growth in the constantly connected, omni-channel world.
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Customer-Driven Innovation:Winning in the Omni-channel Blur
April, 2011
Steven DennisPresident & FounderSageBerry Consulting, LLC
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Steven Dennis
• President, SageBerry Consulting, a boutique consulting firm focused on customer-driven growth and marketing strategy for retail, consumer and luxury brands
• Executive-in-Residence at SMU’s Cox School of Business
• Before founding SageBerry in 2009, Senior Vice President, Strategy, Business Development & Marketing, Neiman Marcus Group
• Prior senior leadership roles at Sears/Lands’ End, NutraSweet, Booz & Co.
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“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
- Charles Darwin
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Emerging consumer and market realities
1. New consumer attitudes & behaviors
2. Slow spending growth
3. Multi-channel morphing to omni-channel
4. A constantly connected—increasingly in-charge—
consumer
5. The death of the traditional purchase funnel
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New consumer attitudes & behaviors
• The recession has had a big impact on consumers of all stripes
• Many of these changes are permanent. With a few exceptions, today’s consumer is not the same person you served three years ago.
• How they spend has shifted and continues to evolve
• “Surgical shopping” still in play
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Slow spending growth
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Jan '07
Mar '07
May '07
Jul '07
Sep '07
Nov '07
Jan '08
Mar '08
May '08
Jul '08
Sep '08
Nov '08
Jan '09
Mar '09
May '09
Jul '09
Sep '09
Nov '09
Jan '10
Mar '10
May '10
Jul '10
Sep '10
Nov '10
Jan '11
Mar '11
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Persistent High Unemployment
% U
mem
ploy
men
t
Slow spending growth
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Q1 2006
Q2 2006
Q3 2006
Q4 2006
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
$150,000
$175,000
$200,000
$225,000
$250,000
Depressed Housing Prices
Slow spending growth
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Q1 2006
Q2 2006
Q3 2006
Q4 2006
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Continued High Savings Rates
% S
avin
gs
Multi-channel morphing to omni-channel
Multi-channel morphing to omni-channel
93.4% US CAGR
Multi-channel morphing to omni-channel
35.1% CAGR
Cross-channel Behavior
The constantly connected--increasingly in-charge-- consumer
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The constantly connected--increasingly in-charge-- consumer
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Sharing
The constantly connected, increasingly in-charge, consumer
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Generating Reviews
The constantly connected--increasingly in-charge-- consumer
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Validating Prices
The constantly connected--increasingly in-charge-- consumer
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And Sometimes Naming Their Own Price
The traditional purchase funnel is dying
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Consumers now engage in an omni-channel blur
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So what?
• Half-empty: With all this change, many companies’ understanding of their customers and prospects is frighteningly out of date.
• Half-full: For companies with keen consumer insight, there are big opportunities to gain share.
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The key is to be intensely customer-driven
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Slow Growth +
Shifting Consumer
Desires= Battle for Share
of Wallet
Today’s Competitive Advantage:
Understanding more about your customer than your competition
and turning that insight into action
Driving growth through customer innovation
1. Identify opportunities along the customer relationship
corridor
2. Treat different customers differently
3. Defy the “sea of sameness”
4. Redefine the value equation
5. Remember: It’s the experience stupid!
6. Embrace the age of conversation & collaboration
7. Consider m-commerce’s potential to change everything
8. Avoid the trap of the promiscuous shopper
9. Continuously experiment 22
1. Identify opportunities along the customer relationship corridor
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Awareness/Familiarity Consideration Discovery Purchase Repeat
Purchase Grow Preferred Loyalist/evangelist
2. Treat different customers differently
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2. Treat different customers differently
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1Deep Customer
Insight
2ActionableCustomer
Segmentation
3RobustAnalytics
4CustomerSpecific
Strategies
2. Treat different customers differently
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2. Treat different customers differently
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Employs persona-based segmentation to drive differentiated store design,
customer service and target marketing
Leverages updated loyalty program and segment specific targeting to retain high value customer and grow share of wallet with high potentials
3. Defy the “sea of sameness”
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Exclusive Product
3. Defy the “sea of sameness”
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Authenticity &Craftsmanship:
Rational benefits to justify a premium price
Incredible Bang For the Buck:
That gives a commodity item emotional value
Reinforce brand value, regardless of price point
3. Defy the “sea of sameness”
• Game-changing: challenges category assumptions
• Buzz-worthy: drives business but also attention to the brand
• Results: all passes sold out within one week• Generated user-created blogs, Twitter accounts
and Facebook groups • Used as a foundation for marketing by other
travel marketers• Traffic to JetBlue’s Web-site up 700%
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Innovate the delivery
4. Redefine the value equation
• Positioning: Online “sample” sales of designer/luxury merchandise
• Tactics: • “Flash sales”: Limited quantities of deeply discounted
merchandise available for short duration• Members only, base grown primarily through
user networking• Daily, mass-customized emails
• Results:• 4 million+ members• Started in 2007• 2011 sales expected to exceed $500 million• Branching out into Men’s, travel and other categories
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Gilt Groupe’s new business model
4. Redefine the value equation
• Positioning: Retail format designed for aspirational fashionistas
• Tactics: • Evolve real estate strategy from factory outlet
centers to major metropolitan areas• Source product directly from manufacturers
to hit key price points• Launch supporting web presence
• Results:• Off 5th (Saks): 55 locations and growing• Last Call (Neiman Marcus): 30 stores and growing• Nordstrom Rack: 76 stores, to open 16 this year• Bloomingdale’s and Lord & Taylor opening their own
versions
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Mine emerging segments
5. It’s the experience stupid!
• Positioning: The super-store for shoes on the web
• Tactics: • Enormous assortment
• Free and easy returns
• Super helpful, empowered customer service reps
• Results:• Nearly $1 billion in annual sales in under 10 years
• Legendary customer service
• Acquired by Amazon for $1.2 billion last year
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Find your “Purple Cow”
5. It’s the experience stupid!
• Positioning: “Patient First”• Tactics: Re-define the service model
• Invest heavily in staff and physician training• Create a “stress-free” patient environment• Practice team medicine• Manage brand comprehensively• Support a “no stars” culture
• Results:• Dramatic expansion in “profits”• Industry leading patient satisfaction results• Industry leading recovery rates• Successful expansion into satellite locations
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Address major dissatisfiers
5. It’s the experience stupid!
• Positioning: Accessible fashion in the store and on the web
• Tactics: Multi-year investments to create a seamless multi-channel experience• Shared inventory• Virtual assortment available to
in-store customers• Unified messaging
• Results: Nordstrom continues to gain share with enormous growth in direct to consumer
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Be channel agnostic
6. Embrace the Age of Conversation & Collaboration
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7. Consider m-Commerce’s potential to change everything
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Link to shop.org “Future of Shopping” video:
http://www.youtube.com/watch?v=h0N-mkuK_DI
Bricks & Mobile
8. Avoid the Trap of the Promiscuous Shopper
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9. Continuously Experiment
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Where are they now?
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Get started.
It’s later than you think.
What better time than now?
Q & A
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Contact Information
Steven DennisPresident and FounderSageBerry Consulting100 Highland Park Village, Suite 200 Dallas, Texas 75205www.sageberryconsulting.com Phone: (214)-520-6555
Email: [email protected]: http://stevenpdennis.wordpress.com
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