#FlowOverFrictionmyrbis.averydennison.com/digital-edition/flow-over... · human expectations, shopper experience and customer intelligence. It offers strategic and practical insight

The business, brand and human impact of RFID and IoT Technologies to create FLOW OVER FRICTION and revolutionize the customer experience

#FlowOverFriction

02 #FlowOverFriction #FlowOverFriction 01#FlowOverFriction Contents

“Connected products allow us to go beyond what's possible...creating happiness”

Francisco Melo Vice President and General Manager Global RFID Avery Dennison

Executive Summary

Executive Summary

The pursuit of happiness is the most universal motivation in humanity. It underpins our behavior and the desire of how we wish to spend our time. It’s this complete immersion in the here and now that researchers refer to in Positive Psychology as FLOW. Although this isn’t a new term, its application to the new world is. As technology has become an enabler in our everyday and begun to break down the borders between our physical and digital lives, it’s essential companies understand the new dynamics of FLOW in a connected age to turn consumer happiness into business growth.

This is the holy grail for retail. As experiences become the new battleground, retailers and brands must focus on the “micro moment” that influences consumer engagement, purchase and post-purchase satisfaction. Just as happiness in life is based on a series of connected moments, successful customer experiences are based on connecting a seamless supply chain, shopper and product journey. Where previously this may have been difficult, the emergence and convergence of advanced technologies such as RFID and the Internet of Things is creating a new shopping paradigm that combines a FLOW of data and a FLOW of experience to positively influence a customer's FLOW of happiness.

This guide will highlight the business, brand and human opportunities from creating FLOW OVER FRICTION across stock visibility, brand transparency, human expectations, shopper experience and customer intelligence. It offers strategic and practical insight with technology available right here and right now for retailers to increase loyalty and a brand’s Net Promoter Score. Most importantly, it helps retailers and brands to deliver against the only success metric that customers value: happiness.

Contents

Executive Summary 01Part 1. Introducing FLOW 04Part 2. When retail works, it FLOWS 08Part 3. FLOW OVER FRICTION 10Part 4. Impact of FLOW on NPS 22Part 5. Key Takeaways 26 References 28 Contact Details 30

Advanced technologies such as RFID and the Internet

of Things is creating a new shopping paradigm

02 #FlowOverFriction #FlowOverFriction 01#FlowOverFriction Contents

“Connected products allow us to go beyond what's possible...creating happiness”


Executive Summary

Executive Summary

The pursuit of happiness is the most universal motivation in humanity. It underpins our behavior and the desire of how we wish to spend our time. It’s this complete immersion in the here and now that researchers refer to in Positive Psychology as FLOW. Although this isn’t a new term, its application to the new world is. As technology has become an enabler in our everyday and begun to break down the borders between our physical and digital lives, it’s essential companies understand the new dynamics of FLOW in a connected age to turn consumer happiness into business growth.

This is the holy grail for retail. As experiences become the new battleground, retailers and brands must focus on the “micro moment” that influences consumer engagement, purchase and post-purchase satisfaction. Just as happiness in life is based on a series of connected moments, successful customer experiences are based on connecting a seamless supply chain, shopper and product journey. Where previously this may have been difficult, the emergence and convergence of advanced technologies such as RFID and the Internet of Things is creating a new shopping paradigm that combines a FLOW of data and a FLOW of experience to positively influence a customer's FLOW of happiness.

This guide will highlight the business, brand and human opportunities from creating FLOW OVER FRICTION across stock visibility, brand transparency, human expectations, shopper experience and customer intelligence. It offers strategic and practical insight with technology available right here and right now for retailers to increase loyalty and a brand’s Net Promoter Score. Most importantly, it helps retailers and brands to deliver against the only success metric that customers value: happiness.

Contents

Executive Summary 01Part 1. Introducing FLOW 04Part 2. When retail works, it FLOWS 08Part 3. FLOW OVER FRICTION 10Part 4. Impact of FLOW on NPS 22Part 5. Key Takeaways 26 References 28 Contact Details 30

Advanced technologies such as RFID and the Internet

of Things is creating a new shopping paradigm

02 #FlowOverFriction #FlowOverFriction 03

01. Stock Visibility

02. Brand Transparency

03. Human Expectations

04. Shopper Experience

05. Customer Intelligence


01. Stock Visibility

02. Brand Transparency

03. Human Expectations

04. Shopper Experience

05. Customer Intelligence

04 #FlowOverFriction #FlowOverFriction 0504 Part 1. Introducing FLOW

Part 1.

Introducing FLOW

Part 1. Introducing FLOW

“We need an ‘anti-channel’ mindset to create channel agnostic experiences where the focus on the human connection outweighs the mechanism”

Mayur Gupta VP Growth & Marketing Spotify

The pursuit of happiness is one of the most central human motivations in life (Kauffman). A positive state of mind, built from connected moments of happiness, creates a value in our life that lasts far longer than the smile itself (Baumeister). What’s more, a positive state of mind drives positive actions and behaviors (Fredrickson). Happiness is what we all desire. But feelings influenced by chemicals in the brain are changeable and complex, making them not just hard to understand, but hard to predict. Responsive to so many variables, they can be positively enhanced, but also negatively impacted if something stands in our way.

This insight parallels with modern retail, where leveraging happiness is the holy grail. Reliant on digital technologies, an “instant” mindset is developing (Forbes) in which shoppers’ expectations are becoming even more changeable with feelings reflecting a myriad of “micro moments” (Google). This means more moments where retail can get it wrong. An understanding of the human state is powerful for retailers, particularly as those that innovate in the customer experience can directly build quantifiable value and success (McKinsey).

"The pursuit of happiness is one of the most central human

motivations in life"

Dr Scott Barry Kaufman Psychologist

#FlowOverFriction

04 #FlowOverFriction #FlowOverFriction 0504 Part 1. Introducing FLOW

Part 1.

Introducing FLOW

Part 1. Introducing FLOW

“We need an ‘anti-channel’ mindset to create channel agnostic experiences where the focus on the human connection outweighs the mechanism”

Mayur Gupta VP Growth & Marketing Spotify

The pursuit of happiness is one of the most central human motivations in life (Kauffman). A positive state of mind, built from connected moments of happiness, creates a value in our life that lasts far longer than the smile itself (Baumeister). What’s more, a positive state of mind drives positive actions and behaviors (Fredrickson). Happiness is what we all desire. But feelings influenced by chemicals in the brain are changeable and complex, making them not just hard to understand, but hard to predict. Responsive to so many variables, they can be positively enhanced, but also negatively impacted if something stands in our way.

This insight parallels with modern retail, where leveraging happiness is the holy grail. Reliant on digital technologies, an “instant” mindset is developing (Forbes) in which shoppers’ expectations are becoming even more changeable with feelings reflecting a myriad of “micro moments” (Google). This means more moments where retail can get it wrong. An understanding of the human state is powerful for retailers, particularly as those that innovate in the customer experience can directly build quantifiable value and success (McKinsey).

"The pursuit of happiness is one of the most central human

motivations in life"

Dr Scott Barry Kaufman Psychologist

#FlowOverFriction

06 #FlowOverFriction #FlowOverFriction 07Part 1. Introducing FLOW Part 1. Introducing FLOW

The key is to eliminate frictions. The gaps that prevent us from not just getting what we want, but feeling the way we want to feel. Like feelings, frictions are also complex and transient making them hard to predict. For retailers to truly win, they too need to be in the moment. To be everywhere through omnichannel marketing isn’t enough anymore, retailers need to be omnipresent.

Previously this was impossible, but with new connected technologies this is now a reality. There is a new shopping paradigm emerging in which engagement, purchase and loyalty are closely aligned with a “human-first” retail strategy and cutting-edge technology. By joining the dots between the entire supply chain, shopper and customer journey, a retailer can create a powerful, connected and seamless experience. Retailers that are omnipresent, in the moment, every moment can drive customer happiness, loyalty and ROI. In short, the future of retail is here, it’s now, it’s open to retailers that create FLOW OVER FRICTION.

Avery Dennison has developed this guide using psychological, retail and business insights to provide a practical overview of how a FLOW strategy can be applied in your business to drive customer excellence. Beyond redefining FLOW for the connected age, we have applied the concept to retail business frictions and outlined the opportunities available to businesses today. This guide will take a step back to help retailers truly deliver against the only success metric that customers value: happiness.

To be everywhere through omnichannel marketing isn't enough anymore, retailers need to be omnipresent

06 #FlowOverFriction #FlowOverFriction 07Part 1. Introducing FLOW Part 1. Introducing FLOW

The key is to eliminate frictions. The gaps that prevent us from not just getting what we want, but feeling the way we want to feel. Like feelings, frictions are also complex and transient making them hard to predict. For retailers to truly win, they too need to be in the moment. To be everywhere through omnichannel marketing isn’t enough anymore, retailers need to be omnipresent.

Previously this was impossible, but with new connected technologies this is now a reality. There is a new shopping paradigm emerging in which engagement, purchase and loyalty are closely aligned with a “human-first” retail strategy and cutting-edge technology. By joining the dots between the entire supply chain, shopper and customer journey, a retailer can create a powerful, connected and seamless experience. Retailers that are omnipresent, in the moment, every moment can drive customer happiness, loyalty and ROI. In short, the future of retail is here, it’s now, it’s open to retailers that create FLOW OVER FRICTION.

Avery Dennison has developed this guide using psychological, retail and business insights to provide a practical overview of how a FLOW strategy can be applied in your business to drive customer excellence. Beyond redefining FLOW for the connected age, we have applied the concept to retail business frictions and outlined the opportunities available to businesses today. This guide will take a step back to help retailers truly deliver against the only success metric that customers value: happiness.

To be everywhere through omnichannel marketing isn't enough anymore, retailers need to be omnipresent


The cognitive psychologist, Csíkszentmihályi’s seminal work Flow: The Psychology of Optimal Experience showed us that people are happiest when they are in a state of FLOW. It’s the ultimate positive mental state. A state of complete absorption where nothing else matters. Focused and happy, doubt disappears as you are immersed in the activity at hand. It is the optimal state of motivation, engagement and enhanced memory. “It is when we feel truly fulfilled” (Mihaly Csíkszentmihályi).

This is the holy grail for retail and a truly rewarding customer experience. In an era when time is a highly valued commodity, FLOW is a state where you consider time well spent and/or time saved to do the things where you get most enjoyment. For retail, a shopper in FLOW is a confident shopper, a happy shopper, one who makes decisions without doubt and feels good long after the purchase itself. It means real engagement with the brand, increased sales, long-term loyalty and ROI.

FLOW is a concept with a human lens through which to focus retail and marketing strategies. It makes brands agile, able to meet the individual expectations of customers moment-to-moment and overcome the major frictions to create a seamless journey from the start through to the end of the product’s life cycle. FLOW is the secret to real consumer happiness. By applying FLOW to a shopping context, retailers can unlock win-win rewards for both them and for their customers far beyond those currently achieved.

We have evolved the concept of FLOW in the connected age. We have added new dimensions that demonstrate how businesses that create FLOW of data and the FLOW of experiences will positively influence an individual’s FLOW of happiness.

Part 2. When retail works, it FLOWS Part 2. When retail works, it FLOWS

Part 2.

When retail works, it FLOWS

“It is by being fully involved with every detail of our lives that we find happiness”

Mihaly Csíkszentmihályi Psychologist

Flow Connection Opportunity

FLOW of DATA Connected product Gathering item-level intelligence from manufacturing to shopping to purchase to usage, providing data throughout the journey end-to-end

FLOW of EXPERIENCE Connected channels Bridging the supply-chain & shopper journey, physical & digital, store & home to create a seamless and uninterrupted customer experience

FLOW of HAPPINESS Connected feelings Meeting the emotional and psychological needs of modern consumers, driving a desired positive mental state and human happiness

FLOW is a concept with a human lens through which to focus retail

and marketing strategies

#FlowOverFriction


The cognitive psychologist, Csíkszentmihályi’s seminal work Flow: The Psychology of Optimal Experience showed us that people are happiest when they are in a state of FLOW. It’s the ultimate positive mental state. A state of complete absorption where nothing else matters. Focused and happy, doubt disappears as you are immersed in the activity at hand. It is the optimal state of motivation, engagement and enhanced memory. “It is when we feel truly fulfilled” (Mihaly Csíkszentmihályi).

This is the holy grail for retail and a truly rewarding customer experience. In an era when time is a highly valued commodity, FLOW is a state where you consider time well spent and/or time saved to do the things where you get most enjoyment. For retail, a shopper in FLOW is a confident shopper, a happy shopper, one who makes decisions without doubt and feels good long after the purchase itself. It means real engagement with the brand, increased sales, long-term loyalty and ROI.

FLOW is a concept with a human lens through which to focus retail and marketing strategies. It makes brands agile, able to meet the individual expectations of customers moment-to-moment and overcome the major frictions to create a seamless journey from the start through to the end of the product’s life cycle. FLOW is the secret to real consumer happiness. By applying FLOW to a shopping context, retailers can unlock win-win rewards for both them and for their customers far beyond those currently achieved.

We have evolved the concept of FLOW in the connected age. We have added new dimensions that demonstrate how businesses that create FLOW of data and the FLOW of experiences will positively influence an individual’s FLOW of happiness.

Part 2. When retail works, it FLOWS Part 2. When retail works, it FLOWS

Part 2.

When retail works, it FLOWS

“It is by being fully involved with every detail of our lives that we find happiness”


Flow Connection Opportunity

FLOW of DATA Connected product Gathering item-level intelligence from manufacturing to shopping to purchase to usage, providing data throughout the journey end-to-end

FLOW of EXPERIENCE Connected channels Bridging the supply-chain & shopper journey, physical & digital, store & home to create a seamless and uninterrupted customer experience

FLOW of HAPPINESS Connected feelings Meeting the emotional and psychological needs of modern consumers, driving a desired positive mental state and human happiness

FLOW is a concept with a human lens through which to focus retail

and marketing strategies

#FlowOverFriction

10 #FlowOverFriction #FlowOverFriction 1110 Part 3. FLOW OVER FRICTION

Part 3.

FLOW OVER FRICTION

“Creating customer experiences that go well beyond what is expected starts with RFID”

Bill Toney Vice President, Global Market, RFID Avery Dennison

Part 3. FLOW OVER FRICTION

Frictions cost retailers time, money and trust by creating gaps that prevent a brand from delivering against ever-shifting expectations. Traditional retail models need to keep pace with this rapid pace of change by leveraging the opportunities of new, leading technologies that give products a digital identity. This allows effective tracking and deep insight to underpin commercial, marketing and digital transformation. With RFID and IoT technology, retailers can begin to create FLOW OVER FRICTION by responding to consumer tensions in real-time.

To demonstrate the unparalleled opportunities of these technologies, individually and combined, we’ve identified how they can be applied to five major frictions at different stages across the manufacturing, store and product ownership journey – all connected, all driving business ROI, all achieving customer happiness.

RFID can lead to a 10% improvement

in shrink reduction

#FlowOverFriction

10 #FlowOverFriction #FlowOverFriction 1110 Part 3. FLOW OVER FRICTION

Part 3.

FLOW OVER FRICTION

“Creating customer experiences that go well beyond what is expected starts with RFID”

Bill Toney Vice President, Global Market, RFID Avery Dennison

Part 3. FLOW OVER FRICTION

Frictions cost retailers time, money and trust by creating gaps that prevent a brand from delivering against ever-shifting expectations. Traditional retail models need to keep pace with this rapid pace of change by leveraging the opportunities of new, leading technologies that give products a digital identity. This allows effective tracking and deep insight to underpin commercial, marketing and digital transformation. With RFID and IoT technology, retailers can begin to create FLOW OVER FRICTION by responding to consumer tensions in real-time.

To demonstrate the unparalleled opportunities of these technologies, individually and combined, we’ve identified how they can be applied to five major frictions at different stages across the manufacturing, store and product ownership journey – all connected, all driving business ROI, all achieving customer happiness.

RFID can lead to a 10% improvement

in shrink reduction

#FlowOverFriction

12 #FlowOverFriction #FlowOverFriction 13Part 3. FLOW OVER FRICTION Part 3. FLOW OVER FRICTION

Stock VisibilityWith an estimated inventory loss of $1.1 trillion to the retail industry (IHL Group) and inventory shrinkage cost rising to above $48.9 billion last year alone representing 1.44% of sales (National Retail Federation), optimizing the supply chain is of paramount importance for every retailer.

The negative impact of ignoring this is twofold. From a business perspective, frictions in the supply chain decreases productivity, wastes time and lowers profits. However, frictions upstream can have an impact on the experience downstream in-store too. When staff aren’t equipped with accurate information on product availability it can lead to either a lost sale, lost trust, or both.

New retail technologies offer a solution for stock visibility, meaning that rather than building strategies on “guesstimates” and accepting shrinkage as part of their plans, retailers can be much more effective with forecasting and management. By utilizing RFID chips in product labels, that can be read at regular points along the supply chain, retailers can increase accuracy of their exact location in the supply chain, store room and shop floor. RFID gives access to item-level data that keeps you up-to-date on where inventory is and enables items to be read with no line of sight, increasing efficiency.

3.1

RFID leads to an increase in SKU level accuracy increased from 65%–99%

“High inventory accuracy is usually not obtainable and certainly not sustainable without RFID”

Dr Bill Hardgrave Auburn University

Customers receive their products up to 90% faster and a retailer can make up to nine times more sales from RFID-enabled back to front replenishment

Supply chain optimization, including faster verification and quality process, unlocks value from inventory availability, by directly linking it to customer expectations and needs at point-of-purchase. The “out of stock” experience can be reduced from 40 - 20% building customer confidence that the brand can deliver what they what, when they want it, where they want it. By creating FLOW over stock visibility friction, brands can create a positive mindset across the shopper journey. This leads to consumer happiness in-the-moment.

Avery Dennison is a global leader in RFID-enabled

technologies with more than 800 patents and applications,

and state-of-the-art manufacturing capabilities

located around the world


Stock VisibilityWith an estimated inventory loss of $1.1 trillion to the retail industry (IHL Group) and inventory shrinkage cost rising to above $48.9 billion last year alone representing 1.44% of sales (National Retail Federation), optimizing the supply chain is of paramount importance for every retailer.

The negative impact of ignoring this is twofold. From a business perspective, frictions in the supply chain decreases productivity, wastes time and lowers profits. However, frictions upstream can have an impact on the experience downstream in-store too. When staff aren’t equipped with accurate information on product availability it can lead to either a lost sale, lost trust, or both.

New retail technologies offer a solution for stock visibility, meaning that rather than building strategies on “guesstimates” and accepting shrinkage as part of their plans, retailers can be much more effective with forecasting and management. By utilizing RFID chips in product labels, that can be read at regular points along the supply chain, retailers can increase accuracy of their exact location in the supply chain, store room and shop floor. RFID gives access to item-level data that keeps you up-to-date on where inventory is and enables items to be read with no line of sight, increasing efficiency.

3.1

RFID leads to an increase in SKU level accuracy increased from 65%–99%

“High inventory accuracy is usually not obtainable and certainly not sustainable without RFID”


Customers receive their products up to 90% faster and a retailer can make up to nine times more sales from RFID-enabled back to front replenishment

Supply chain optimization, including faster verification and quality process, unlocks value from inventory availability, by directly linking it to customer expectations and needs at point-of-purchase. The “out of stock” experience can be reduced from 40 - 20% building customer confidence that the brand can deliver what they what, when they want it, where they want it. By creating FLOW over stock visibility friction, brands can create a positive mindset across the shopper journey. This leads to consumer happiness in-the-moment.

Avery Dennison is a global leader in RFID-enabled

technologies with more than 800 patents and applications,

and state-of-the-art manufacturing capabilities

located around the world


Brand TransparencyThere are two big costs associated with transparency. The first and most commonly associated is related to sustainability. In a recent study, Unilever found that brands are missing out on $1.1 trillion by not proving their social and environmental credentials. The second cost is related to counterfeit goods, which costs the United States $29 billion to $41 billion annually (The Commission on the Theft of American Intellectual Property). The financial costs are very real, meaning retailers that don’t elevate transparency on their business agenda are limiting the opportunities to create competitive advantage and future growth. Additionally, if customers can’t access clear information on a product’s origin it can erode brand trust.

There is huge opportunity for retailers to harness sustainability and authenticity through technology. Not only can a brand innovate across the entire supply chain to make it fully transparent, it can also use it to tell more authentic stories in marketing and digital activity. Brands can also protect themselves against counterfeit goods that damage brand reputation, product equity and sales margins.

RFID provides a smart, simple solution that gives businesses the ability to turn a missed opportunity into a competitive advantage. Connected

“intelligent” labels provide consumers with instant access to product information and authentication about where, how and when their product was made. It can present a new level of connection with narratives that build an emotional bond. This can be further enhanced when videos are used to celebrate the people and processes behind a product’s craftsmanship. From a counterfeit perspective, RFID offers overt, covert and digital data that can form the foundation of a brand protection program. However, this level of assurance doesn’t just protect the brands themselves, but also their customers. Genuine products go through global compliance ensuring safety, ethical and environmental standards are met and products come with official warranties that safeguard a customer’s satisfaction and rights.

A brand showing that it cares gives customers peace of mind. Taking proactive responsibility means brands can offer customers one less thing to worry about, a worry that can very quickly escalate into a much bigger friction in a customer’s experience. By actively addressing this and giving consumers confidence in the moment, retailers can subtly influence decision-making with psychological triggers that result in a state of FLOW.

Part 3. FLOW OVER FRICTION Part 3. FLOW OVER FRICTION

3.2

“Quantified and qualified facts will be in high demand and consumers will expect greater transparency as standard, whether this is related to manufacturing processes or how efficacious a product is”

Catherine Cotteney Trends Manager, Mintel

“Companies that can move fast in the supply chain can move

fast in the market”

Julie Vargas Director, Digital Solutions

Avery Dennison

Avery Dennison’s Janela™ solution, powered by the EVRYTHNG Smart

Products Platform, enables products to have a unique, serialized identity

to provide unrivaled transparency


Brand TransparencyThere are two big costs associated with transparency. The first and most commonly associated is related to sustainability. In a recent study, Unilever found that brands are missing out on $1.1 trillion by not proving their social and environmental credentials. The second cost is related to counterfeit goods, which costs the United States $29 billion to $41 billion annually (The Commission on the Theft of American Intellectual Property). The financial costs are very real, meaning retailers that don’t elevate transparency on their business agenda are limiting the opportunities to create competitive advantage and future growth. Additionally, if customers can’t access clear information on a product’s origin it can erode brand trust.

There is huge opportunity for retailers to harness sustainability and authenticity through technology. Not only can a brand innovate across the entire supply chain to make it fully transparent, it can also use it to tell more authentic stories in marketing and digital activity. Brands can also protect themselves against counterfeit goods that damage brand reputation, product equity and sales margins.

RFID provides a smart, simple solution that gives businesses the ability to turn a missed opportunity into a competitive advantage. Connected

“intelligent” labels provide consumers with instant access to product information and authentication about where, how and when their product was made. It can present a new level of connection with narratives that build an emotional bond. This can be further enhanced when videos are used to celebrate the people and processes behind a product’s craftsmanship. From a counterfeit perspective, RFID offers overt, covert and digital data that can form the foundation of a brand protection program. However, this level of assurance doesn’t just protect the brands themselves, but also their customers. Genuine products go through global compliance ensuring safety, ethical and environmental standards are met and products come with official warranties that safeguard a customer’s satisfaction and rights.

A brand showing that it cares gives customers peace of mind. Taking proactive responsibility means brands can offer customers one less thing to worry about, a worry that can very quickly escalate into a much bigger friction in a customer’s experience. By actively addressing this and giving consumers confidence in the moment, retailers can subtly influence decision-making with psychological triggers that result in a state of FLOW.

Part 3. FLOW OVER FRICTION Part 3. FLOW OVER FRICTION

3.2

“Quantified and qualified facts will be in high demand and consumers will expect greater transparency as standard, whether this is related to manufacturing processes or how efficacious a product is”

Catherine Cotteney Trends Manager, Mintel

“Companies that can move fast in the supply chain can move

fast in the market”

Julie Vargas Director, Digital Solutions

Avery Dennison

Avery Dennison’s Janela™ solution, powered by the EVRYTHNG Smart

Products Platform, enables products to have a unique, serialized identity

to provide unrivaled transparency


Human Expectations$62 billion is lost by US companies each year following bad customer service (Forbes). Good service comes from meeting customer expectations, but incredible service comes from anticipating and exceeding human expectations. With time considered to be the most important variable in behavior (Mayer), businesses must understand the implications of the retail service on this precious human resource.

We know from psychology that when people use their time effectively, or spend it doing the things they enjoy most they are at their happiest (Shapiro). When things get in the way of this it causes distress, distraction and anxiety. This means that people either want a fast service that saves them time, or an experience so enjoyable that it is considered time well spent. The challenge for retailers is that these expectations are changeable in the moment, highly personalized and hyper-contextual. Predicting this is impossible, so the only way for a modern business to win is by creating a service where both can co-exist and to be responsive to the individual in the “shopping micro-moment”. An insight echoed by Forrester’s recent study finding that 64% of consumers expect companies to respond and interact with them in real-time.

Getting this wrong can have big commercial costs. The New Voices survey found that following a poor customer experience, 56% would never use the company again and 25% would tell their friends not to either. However, brands that get it right empower customers by giving them a choice of how they wish to shop, encouraging a positive feeling at point-of-purchase. Furthermore, this positive feeling is highly contagious through word-of-mouth, with 72% of customers sharing their positive experience with six or more people (Kolsky).

A new retail world requires a new retail mindset. Retailers must shift from an omnichannel obsession to an “omnipresent” strategy that is always connected, always listening and always adapting around transient needs. Connected technology provides a customer experience that meets fluid expectations. When RFID and IoT technology come together in-store it can provide a versatile shopping experience suited to each individual consumer, allowing them to shop how they want, when they want. For example, RFID-enabled smart mirrors can allow consumers to find the right item, color and size instantly giving them a much more immersive experience. Rebecca Minkoff tripled clothing sales last year with interactive touch screens that located and requested items as well as providing styling tips. Ultra convenience can also be provided through self-service kiosks or mobile checkout speeding up the buying process and arranging delivery direct to their home. IoT technology can complement RFID by allowing consumers to digitally connect through smartphones, making the shopping experience more interactive, shareable and personal.

The combination of both technologies can exceed consumer expectations through hyper-personalization. It allows a consumer to feel like the brand truly understands who they are and cares. When retail is on the customer's terms they’re not just willing to engage more, but they’re happier. This creates a positive state of mind with complete absorption in the activity at hand and a sense of timelessness. Put simply, it creates FLOW OVER FRICTION.

3.3

$62 billion is lost by US companies each year following bad customer service

Forbes

64% of consumers expect companies to respond and interact with them in real-time

Forrester

“It’s no longer a one size fits all. There are wide variations in how

different generations interact, shop and communicate. The one common

need for all generations is the requirement for speed and

ease of experience"

Julie Vargas Director of Digital Solutions

Avery Dennison

Every Janela™ product is “born” digital with the ability to capture real-time data, meaning retailers

and brands can respond in-the-moment to deliver against transient human feelings


Human Expectations$62 billion is lost by US companies each year following bad customer service (Forbes). Good service comes from meeting customer expectations, but incredible service comes from anticipating and exceeding human expectations. With time considered to be the most important variable in behavior (Mayer), businesses must understand the implications of the retail service on this precious human resource.

We know from psychology that when people use their time effectively, or spend it doing the things they enjoy most they are at their happiest (Shapiro). When things get in the way of this it causes distress, distraction and anxiety. This means that people either want a fast service that saves them time, or an experience so enjoyable that it is considered time well spent. The challenge for retailers is that these expectations are changeable in the moment, highly personalized and hyper-contextual. Predicting this is impossible, so the only way for a modern business to win is by creating a service where both can co-exist and to be responsive to the individual in the “shopping micro-moment”. An insight echoed by Forrester’s recent study finding that 64% of consumers expect companies to respond and interact with them in real-time.

Getting this wrong can have big commercial costs. The New Voices survey found that following a poor customer experience, 56% would never use the company again and 25% would tell their friends not to either. However, brands that get it right empower customers by giving them a choice of how they wish to shop, encouraging a positive feeling at point-of-purchase. Furthermore, this positive feeling is highly contagious through word-of-mouth, with 72% of customers sharing their positive experience with six or more people (Kolsky).

A new retail world requires a new retail mindset. Retailers must shift from an omnichannel obsession to an “omnipresent” strategy that is always connected, always listening and always adapting around transient needs. Connected technology provides a customer experience that meets fluid expectations. When RFID and IoT technology come together in-store it can provide a versatile shopping experience suited to each individual consumer, allowing them to shop how they want, when they want. For example, RFID-enabled smart mirrors can allow consumers to find the right item, color and size instantly giving them a much more immersive experience. Rebecca Minkoff tripled clothing sales last year with interactive touch screens that located and requested items as well as providing styling tips. Ultra convenience can also be provided through self-service kiosks or mobile checkout speeding up the buying process and arranging delivery direct to their home. IoT technology can complement RFID by allowing consumers to digitally connect through smartphones, making the shopping experience more interactive, shareable and personal.

The combination of both technologies can exceed consumer expectations through hyper-personalization. It allows a consumer to feel like the brand truly understands who they are and cares. When retail is on the customer's terms they’re not just willing to engage more, but they’re happier. This creates a positive state of mind with complete absorption in the activity at hand and a sense of timelessness. Put simply, it creates FLOW OVER FRICTION.

3.3

$62 billion is lost by US companies each year following bad customer service

Forbes

64% of consumers expect companies to respond and interact with them in real-time

Forrester

“It’s no longer a one size fits all. There are wide variations in how

different generations interact, shop and communicate. The one common

need for all generations is the requirement for speed and

ease of experience"

Julie Vargas Director of Digital Solutions

Avery Dennison

Every Janela™ product is “born” digital with the ability to capture real-time data, meaning retailers

and brands can respond in-the-moment to deliver against transient human feelings


Shopper ExperienceOver 50% of all customer interactions happen during a multi-event, multi-channel journey (Mckinsey). However, 89% of customers get frustrated when they need to repeat their issues to multiple representatives (Accenture), and 45% of US consumers will abandon an online transaction if their questions or concerns are not addressed quickly (Forrester). While retailers have advanced in an omnichannel world by creating presence across different touchpoints, the real friction arises with inconsistency in the consumer journey where people feel like they are interacting with a completely different brand.

These gaps can create obstacles on the decision-making and purchase journey, road-blocking a sale, increasing churn rates and restricting the ability to build relationships that underpin long-term loyalty. Forrester has identified that 75% of consumers expect consistent experiences across multiple channels, with 73% likely to switch brands if they don’t get it. The commercial implication is that consumers can take their business elsewhere, particularly with the ease, choice and speed at which people can switch to competitors in the digital age.

Omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel (Google), however it’s just the start not the

end goal for modern retail. Rather than creating lots of mini-experiences where gaps can easily arise, retailers need to create “bridges” that result in one frictionless experience between touchpoints, platforms, devices and apps. The opportunity for a consistent journey across channels means that people can pick up where they left off without having to subscribe or sign-in again. This saves time and displays a more empathetic side to the brand that understands modern shopper journeys are no longer linear. By retailers rethinking their omnichannel customer engagement strategy they can retain an average of 89% of their customers, as compared to 33% for companies with weak omnichannel strategies (Aberdeen).

The solution is to center your omnichannel strategy around a new channel, one that offers unique and powerful engagement opportunities: your product. By connecting products through IoT technology, brands can create consistency from in-store through to home and life. With the increased item level retailers can also make their product available online to be shipped from store or distribution center as and when the customer desires.

The product becomes an open gateway into a brand’s world where customers can access product information, exclusive offers and complementary services that allow them to gain added value from their purchase and ownership. Furthermore, now that QR Codes can be directly recognised through built-in technology in new smartphone cameras, the experience is even more seamless than using specialist apps.

By creating “micro FLOW” moments between consumer touchpoints, retailers can turn a disconnected, time-wasting and frustrating experience into one that is easy, natural and fluid. The outcome is an optimal journey that creates an optimal state of mind, replacing barriers to shopping with active learning to leave a positive impression on the brand. Overall, by using connected products as your leading channel, it acts as the conduit between customer engagement, happiness and loyalty by advocating a more consistent and enjoyable shopper experience.

3.4

Over 50% of all customer interactions happen during a multi-event, multi-channel journey

McKinsey

Omnichannel shoppers have a 30% higher lifetime value than those who

shop using only one channel

Google

“People don’t always remember what you say or even what you do, but they always remember how you made them feel”

Maya Angelou Poet

Janela™ is digitizing a minimum of 10 billion apparel products

for some of the world’s leading brands and retailers, enabling

personalized content and exclusive consumer experiences


Shopper ExperienceOver 50% of all customer interactions happen during a multi-event, multi-channel journey (Mckinsey). However, 89% of customers get frustrated when they need to repeat their issues to multiple representatives (Accenture), and 45% of US consumers will abandon an online transaction if their questions or concerns are not addressed quickly (Forrester). While retailers have advanced in an omnichannel world by creating presence across different touchpoints, the real friction arises with inconsistency in the consumer journey where people feel like they are interacting with a completely different brand.

These gaps can create obstacles on the decision-making and purchase journey, road-blocking a sale, increasing churn rates and restricting the ability to build relationships that underpin long-term loyalty. Forrester has identified that 75% of consumers expect consistent experiences across multiple channels, with 73% likely to switch brands if they don’t get it. The commercial implication is that consumers can take their business elsewhere, particularly with the ease, choice and speed at which people can switch to competitors in the digital age.

Omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel (Google), however it’s just the start not the

end goal for modern retail. Rather than creating lots of mini-experiences where gaps can easily arise, retailers need to create “bridges” that result in one frictionless experience between touchpoints, platforms, devices and apps. The opportunity for a consistent journey across channels means that people can pick up where they left off without having to subscribe or sign-in again. This saves time and displays a more empathetic side to the brand that understands modern shopper journeys are no longer linear. By retailers rethinking their omnichannel customer engagement strategy they can retain an average of 89% of their customers, as compared to 33% for companies with weak omnichannel strategies (Aberdeen).

The solution is to center your omnichannel strategy around a new channel, one that offers unique and powerful engagement opportunities: your product. By connecting products through IoT technology, brands can create consistency from in-store through to home and life. With the increased item level retailers can also make their product available online to be shipped from store or distribution center as and when the customer desires.

The product becomes an open gateway into a brand’s world where customers can access product information, exclusive offers and complementary services that allow them to gain added value from their purchase and ownership. Furthermore, now that QR Codes can be directly recognised through built-in technology in new smartphone cameras, the experience is even more seamless than using specialist apps.

By creating “micro FLOW” moments between consumer touchpoints, retailers can turn a disconnected, time-wasting and frustrating experience into one that is easy, natural and fluid. The outcome is an optimal journey that creates an optimal state of mind, replacing barriers to shopping with active learning to leave a positive impression on the brand. Overall, by using connected products as your leading channel, it acts as the conduit between customer engagement, happiness and loyalty by advocating a more consistent and enjoyable shopper experience.

3.4

Over 50% of all customer interactions happen during a multi-event, multi-channel journey

McKinsey

Omnichannel shoppers have a 30% higher lifetime value than those who

shop using only one channel

Google

“People don’t always remember what you say or even what you do, but they always remember how you made them feel”

Maya Angelou Poet

Janela™ is digitizing a minimum of 10 billion apparel products

for some of the world’s leading brands and retailers, enabling

personalized content and exclusive consumer experiences


Customer Intelligence“Bad data” costs the US over $3.1 trillion a year (Harvard Business Review). This occurs from organizations not validating data accurately, as well as not gathering the most important data. As Einstein noted: “not everything that is measured is important, and not everything that’s important is measured”. The friction isn’t associated with gathering volumes of data, it’s about gathering the right data and turning it into intelligence quick enough to make it useful. Data strategies that are limited to sourcing generic customer information at purchase or through newsletters will fail to gain any real intelligence that can influence future engagement.

The negative implication of missing and misutilization of customer data goes beyond just lost productivity, to a brand having little real-time visibility that increases customer frustration (Forbes). Brands will always be one, two or three steps behind their customers, meaning expectations are unmet, communications are untargeted and potential sales missed.

Organizations that leverage customer behavioral insight from data analytics outperform peers by 85% in sales growth and more than 25% in gross margin (McKinsey/ Gallup). With connected products becoming owned media channels, they offer a unique window into the lives of customers and

the relationship they actually have with the item. Contextual product data showing how, when and where it is being used offers a line of sight that is arguably more insightful than just where a product was bought. With 73% of consumers choosing to do business with retailers who use personal information (Accenture), post-purchase customer intelligence creates a level of intimacy that has previously never been attainable.

In the “Age of the Customer” meeting hyper-personalized expectations requires hyper-personalized customer intelligence. Products born digital™ can capture real-time data both in-store and post-purchase with each digitally connected label becoming an access point for direct, personalized and two-way communication. It allows a brand to create a targeted post-purchase campaign based on accurate behavioral metrics.

Personalization makes brands behave more human. It builds attachment by getting closer to the social needs and motivations of the customer. When a customer attributes human qualities to a brand, neuroscience shows us that it results in “super engagement”. When a customer is emotionally involved in a dialogue with a brand they are communicating without distraction. By giving their full attention and increasing concentration, a study by Harvard University has proven that people are happiest. Post-purchase, contextual data from connected products is an effective way of creating FLOW OVER FRICTION and achieving competitive advantage through intimate moments between the brand and customer.

3.5

“Bad data” costs the US over $3.1 trillion a year

Harvard Business Review

Organizations that leverage customer behavioral insight from

data analytics outperform peers by 85% in sales growth and more than

25% in gross margin

McKinsey/Gallup

“Emotions and feelings are not a luxury...they are a way of guiding our own judgments and decisions”

Antonio R Damasio Neuroscientist

Janela™ offers real-time data from smart, connected devices,

products, and environments to build deeper, more intelligent

connections with customers


Customer Intelligence“Bad data” costs the US over $3.1 trillion a year (Harvard Business Review). This occurs from organizations not validating data accurately, as well as not gathering the most important data. As Einstein noted: “not everything that is measured is important, and not everything that’s important is measured”. The friction isn’t associated with gathering volumes of data, it’s about gathering the right data and turning it into intelligence quick enough to make it useful. Data strategies that are limited to sourcing generic customer information at purchase or through newsletters will fail to gain any real intelligence that can influence future engagement.

The negative implication of missing and misutilization of customer data goes beyond just lost productivity, to a brand having little real-time visibility that increases customer frustration (Forbes). Brands will always be one, two or three steps behind their customers, meaning expectations are unmet, communications are untargeted and potential sales missed.

Organizations that leverage customer behavioral insight from data analytics outperform peers by 85% in sales growth and more than 25% in gross margin (McKinsey/ Gallup). With connected products becoming owned media channels, they offer a unique window into the lives of customers and

the relationship they actually have with the item. Contextual product data showing how, when and where it is being used offers a line of sight that is arguably more insightful than just where a product was bought. With 73% of consumers choosing to do business with retailers who use personal information (Accenture), post-purchase customer intelligence creates a level of intimacy that has previously never been attainable.

In the “Age of the Customer” meeting hyper-personalized expectations requires hyper-personalized customer intelligence. Products born digital™ can capture real-time data both in-store and post-purchase with each digitally connected label becoming an access point for direct, personalized and two-way communication. It allows a brand to create a targeted post-purchase campaign based on accurate behavioral metrics.

Personalization makes brands behave more human. It builds attachment by getting closer to the social needs and motivations of the customer. When a customer attributes human qualities to a brand, neuroscience shows us that it results in “super engagement”. When a customer is emotionally involved in a dialogue with a brand they are communicating without distraction. By giving their full attention and increasing concentration, a study by Harvard University has proven that people are happiest. Post-purchase, contextual data from connected products is an effective way of creating FLOW OVER FRICTION and achieving competitive advantage through intimate moments between the brand and customer.

3.5

“Bad data” costs the US over $3.1 trillion a year

Harvard Business Review

Organizations that leverage customer behavioral insight from

data analytics outperform peers by 85% in sales growth and more than

25% in gross margin

McKinsey/Gallup

“Emotions and feelings are not a luxury...they are a way of guiding our own judgments and decisions”

Antonio R Damasio Neuroscientist

Janela™ offers real-time data from smart, connected devices,

products, and environments to build deeper, more intelligent

connections with customers

22 #FlowOverFriction #FlowOverFriction 2322 Part 4. Impact of FLOW on NPS

Part 4.

Impact of FLOW on NPS

“FLOW is not a component of happiness, but rather a cause of it”


Part 4. Impact of FLOW on NPS

In the modern retail landscape there are ever-increasing consumer variables for retail to deliver against. Thus, most retailers measure success with a range of isolated metrics. In an omnichannel world this doesn’t make sense, because it ignores the consumer experience as a whole. As such, we believe that Net Promoter Score (NPS) is a much more comprehensive metric with which to calculate omnichannel success. It is a single measure that reflects both an index of consumer experience and customer loyalty through analysis of their subsequent behavior. By default it is human-first.

NPS is based on one simple question: On a scale of 0 to 10, with 10 being highest, what’s the likelihood that you would recommend us (our company) to a friend or colleague? The Temkin Economics of Net Promoter report shows that this willingness to recommend a retailer leads to a high NPS and correlates directly with high customer loyalty. With customer loyalty falling behind in the digital age this is a vital focus for retail to ensure ROI.

Furthermore, research shows that 90% of people trust recommendations from people they know, 70% trust an online social post in which a consumer recommends a retailer or product, but only 10% of people trust advertising (Forrester). For this reason, NPS is not only a reflection of retail getting it right, but can denote a very efficient marketing strategy as well.

NPS is a crucial metric of success in a human-first

retail environment

#FlowOverFriction

22 #FlowOverFriction #FlowOverFriction 2322 Part 4. Impact of FLOW on NPS

Part 4.

Impact of FLOW on NPS

“FLOW is not a component of happiness, but rather a cause of it”



In the modern retail landscape there are ever-increasing consumer variables for retail to deliver against. Thus, most retailers measure success with a range of isolated metrics. In an omnichannel world this doesn’t make sense, because it ignores the consumer experience as a whole. As such, we believe that Net Promoter Score (NPS) is a much more comprehensive metric with which to calculate omnichannel success. It is a single measure that reflects both an index of consumer experience and customer loyalty through analysis of their subsequent behavior. By default it is human-first.

NPS is based on one simple question: On a scale of 0 to 10, with 10 being highest, what’s the likelihood that you would recommend us (our company) to a friend or colleague? The Temkin Economics of Net Promoter report shows that this willingness to recommend a retailer leads to a high NPS and correlates directly with high customer loyalty. With customer loyalty falling behind in the digital age this is a vital focus for retail to ensure ROI.

Furthermore, research shows that 90% of people trust recommendations from people they know, 70% trust an online social post in which a consumer recommends a retailer or product, but only 10% of people trust advertising (Forrester). For this reason, NPS is not only a reflection of retail getting it right, but can denote a very efficient marketing strategy as well.

NPS is a crucial metric of success in a human-first

retail environment

#FlowOverFriction

24 #FlowOverFriction #FlowOverFriction 25Part 4. Impact of FLOW on NPS

NPS is a crucial metric of success in a human-first retail environment, as customer recommendations are a reflection not just of customer satisfaction, but also customer fulfillment that drives positive behavior. If a retailer gets it right they turn the consumer from a passive purchaser into an active promoter. This is the science behind shopping. Neuroscience shows us that emotion drives action (Ekman). In the retail environment this translates as: fulfillment drives purchase and recommendation.

It is important to note that Csíkszentmihályi's work shows that the FLOW state is followed by a sense of achievement, satisfaction and positive fulfillment. In other words, a sense of fulfillment is an effect of being in FLOW. As Dr Bill Hardgrave (Auburn University) points out, every retail store has the capacity to become a “mini fulfillment center”, an environment for FLOW. Consumer behavior is driven by how far a retailer can deliver against, or fulfil co-existing consumer needs: choice, speed, convenience and price. Previously retailers have only been able to deliver against one or two of these, potentially leaving a consumer ultimately unfulfilled.

By using RFID intelligently to remove the five main frictions outlined above, for the first time a retailer can deliver against all four factors simultaneously. With inventory accuracy, global compliance and in-store technology, time is no longer wasted and cost is taken out of the supply chain. Convenience of service is delivered by blending online and in-store technology saving the consumer time and ensuring ease of discovery, delivery and transaction. Above all, retailers can offer the choice of how you want to shop, where you want to shop and when you want to shop. Consumer fulfillment and the optimal shopping experience is the pathway to creating FLOW.

FLOW, the state behind customer happiness, reflects fulfillment. The associated positive emotional state is what drives consumer behavior turning a detractor or a passive consumer into an active promoter, driving up NPS and allowing a retailer to not just survive, but thrive.

NPS is not only a reflection of retail getting it right, but can denote a very efficient marketing strategy as well

Consumer fulfillment and the optimal shopping

experience is the pathway to creating FLOW


24 #FlowOverFriction #FlowOverFriction 25Part 4. Impact of FLOW on NPS

NPS is a crucial metric of success in a human-first retail environment, as customer recommendations are a reflection not just of customer satisfaction, but also customer fulfillment that drives positive behavior. If a retailer gets it right they turn the consumer from a passive purchaser into an active promoter. This is the science behind shopping. Neuroscience shows us that emotion drives action (Ekman). In the retail environment this translates as: fulfillment drives purchase and recommendation.

It is important to note that Csíkszentmihályi's work shows that the FLOW state is followed by a sense of achievement, satisfaction and positive fulfillment. In other words, a sense of fulfillment is an effect of being in FLOW. As Dr Bill Hardgrave (Auburn University) points out, every retail store has the capacity to become a “mini fulfillment center”, an environment for FLOW. Consumer behavior is driven by how far a retailer can deliver against, or fulfil co-existing consumer needs: choice, speed, convenience and price. Previously retailers have only been able to deliver against one or two of these, potentially leaving a consumer ultimately unfulfilled.

By using RFID intelligently to remove the five main frictions outlined above, for the first time a retailer can deliver against all four factors simultaneously. With inventory accuracy, global compliance and in-store technology, time is no longer wasted and cost is taken out of the supply chain. Convenience of service is delivered by blending online and in-store technology saving the consumer time and ensuring ease of discovery, delivery and transaction. Above all, retailers can offer the choice of how you want to shop, where you want to shop and when you want to shop. Consumer fulfillment and the optimal shopping experience is the pathway to creating FLOW.

FLOW, the state behind customer happiness, reflects fulfillment. The associated positive emotional state is what drives consumer behavior turning a detractor or a passive consumer into an active promoter, driving up NPS and allowing a retailer to not just survive, but thrive.

NPS is not only a reflection of retail getting it right, but can denote a very efficient marketing strategy as well

Consumer fulfillment and the optimal shopping

experience is the pathway to creating FLOW


26 #FlowOverFriction #FlowOverFriction 2726 Part 5. Key Takeaways

Part 5.

Key Takeaways

“If consumer happiness is the roof of the house, then RFID is the foundation”


Part 5. Key Takeaways

Modern retail demands that both convenience and experience co-exist or businesses risk becoming obsolete. FLOW OVER FRICTION is a new retail concept for the connected age, combining human understanding with cutting-edge technology to create returns beyond previously expected. When retail works, it flows. There are three key takeaways that retailers and brands can leverage to begin the journey of digital transformation:

• FLOW creates a positive “retail butterfly effect”: Every retail micro moment is connected, where even a tiny event can elicit a huge effect in a totally different area of the business. This “butterfly effect” can occur at any point along the product journey. For example, an item that’s not available in-store when expected due to inventory inaccuracy can create consumer frustration and lose future consideration. Tiny frictions can cause giant losses, however this effect can be positive too, particularly with FLOW’s ability to optimize each micro moment. By making sure every gap is bridged the positive effects can be exponential. RFID and IoT technologies are simple pathways to small wins that can have a big impact across the business. In knowing how small wins in manufacturing can lead to big wins in digital marketing, substantial gains can be achieved for both the retailer and consumer that go far beyond those expected.

• FLOW creates “never-ending narratives”: Loyalty is based on the strength of brand relationships and is a predictor of a customer’s Lifetime Value (LTV). In the digital age this is becoming harder to achieve over the long-term due to the increased level of extreme choice, ease and availability of alternatives. IoT connected products open a previously invisible window into customers’ lives, offering new and more meaningful ways to engage. Furthermore, they gives brands the ability to engage in continuous, consistent and constructive “never-ending narratives” with which to strengthen brand love. This engagement is driven by FLOW as the product becomes a direct channel with which the brand can communicate, from making product suggestions or introducing new collections to curating aspirational brand moments and events.

• FLOW creates happiness, the new metric of success: Happiness is no longer a soft metric, it has been proven to translate into commercial success, because positive emotion actively drives positive behavior. Thus, happiness must become the new metric of success. A strategic measurement review that explores the correlations between active engagement, emotional response and repeat sales will provide a window into the “happiness score” of a customer. FLOW and its creation of happiness has both a cause and effect that goes beyond the individual and the business.

#FlowOverFriction

Happiness is no longer a soft metric, it has been proven to translate into

commercial success

26 #FlowOverFriction #FlowOverFriction 2726 Part 5. Key Takeaways

Part 5.

Key Takeaways

“If consumer happiness is the roof of the house, then RFID is the foundation”


Part 5. Key Takeaways

Modern retail demands that both convenience and experience co-exist or businesses risk becoming obsolete. FLOW OVER FRICTION is a new retail concept for the connected age, combining human understanding with cutting-edge technology to create returns beyond previously expected. When retail works, it flows. There are three key takeaways that retailers and brands can leverage to begin the journey of digital transformation:

• FLOW creates a positive “retail butterfly effect”: Every retail micro moment is connected, where even a tiny event can elicit a huge effect in a totally different area of the business. This “butterfly effect” can occur at any point along the product journey. For example, an item that’s not available in-store when expected due to inventory inaccuracy can create consumer frustration and lose future consideration. Tiny frictions can cause giant losses, however this effect can be positive too, particularly with FLOW’s ability to optimize each micro moment. By making sure every gap is bridged the positive effects can be exponential. RFID and IoT technologies are simple pathways to small wins that can have a big impact across the business. In knowing how small wins in manufacturing can lead to big wins in digital marketing, substantial gains can be achieved for both the retailer and consumer that go far beyond those expected.

• FLOW creates “never-ending narratives”: Loyalty is based on the strength of brand relationships and is a predictor of a customer’s Lifetime Value (LTV). In the digital age this is becoming harder to achieve over the long-term due to the increased level of extreme choice, ease and availability of alternatives. IoT connected products open a previously invisible window into customers’ lives, offering new and more meaningful ways to engage. Furthermore, they gives brands the ability to engage in continuous, consistent and constructive “never-ending narratives” with which to strengthen brand love. This engagement is driven by FLOW as the product becomes a direct channel with which the brand can communicate, from making product suggestions or introducing new collections to curating aspirational brand moments and events.

• FLOW creates happiness, the new metric of success: Happiness is no longer a soft metric, it has been proven to translate into commercial success, because positive emotion actively drives positive behavior. Thus, happiness must become the new metric of success. A strategic measurement review that explores the correlations between active engagement, emotional response and repeat sales will provide a window into the “happiness score” of a customer. FLOW and its creation of happiness has both a cause and effect that goes beyond the individual and the business.

#FlowOverFriction

Happiness is no longer a soft metric, it has been proven to translate into

commercial success

28 #FlowOverFriction #FlowOverFriction 29References

“Connected products allow us to go beyond what's possible... creating happiness”


References

Abe J. (2014) Differential Emotions Theory as a Theory of Personality Development. Emotion Review Vol 7 (2)

Baumeister R, Vohs K, Aaker J, Garbinsky E. (2013) Some Key Differences Between a Happy Life and a Meaningful Life. The Journal of Positive Psychology 8 (6)

Brown K. W. & Ryan R. M. (2003). The Benefits of Being Present: Mindfulness and its Role in Psychological Well-Being. Journal of Personality and Social Psychology 84 (4)

Csíkszentmihályi M. (1990) Flow: the Psychology of Optimal Experience (1st edition) New York: Harper & Row

Damasio A. (2006) Descartes’ Error: Emotion, Reason and the Human Brain. (New edition) Putnam Publishing

Ditty S. (2017) Transparency is trending. Fashion Revolution

Ekman P. (2004) Emotions Revealed: Understanding Faces and Feelings. (New edition) W&N

Kashdan T, Biswas-Diener R & King L. (2008) Reconsidering Happiness: the Costs of Distinguishing between Hedonics and Eudaimonia. The Journal of Positive Psychology Vol 3 (4)

Pretz J. Totz K & Kaufman S. (2011) The Effects of Mood, Cognitive Style, and Cognitive Ability on Implicit Learning. Learning and Individual Differences 20 (3)

Rampl L et al. (2016) The Role of Emotions in Decision-Making on Employer Brands: Insights from Functional Magnetic Resonance Imaging (fMRI). Marketing Letters Vol 27 (2)

Rigoli F, Chew D, Dayan P & Dolan R. (2017) Learning Contextual Reward Expectations for Value Adaptation. Journal of Cognitive Neuroscience 201

Seligman M. (2012) A Visionary New Understanding of Happiness and Well-being. Nicholas Brealey Publishing

Shapiro S. (2001) Illogical Positivism. American Psychologist 56 (1)

Sheldon K, Kashdan T, Steger M. (Ed) (2011) Designing Positive Psychology: Taking Stock and Moving Forward New York, NY: Oxford University Press

Wong P. (2011) Positive Psychology 2.0: Towards a Balanced Interactive Model of the Good Life. Canadian Psychology 52

Wong P. (2012) The Human Quest for Meaning: Theories, Research, and Applications. Personality and Clinical Psychology 2nd Edition

Zaltman G. (2016) Marketing’s Forthcoming Age of Imagination. AMS Review

#FlowOverFriction

28 #FlowOverFriction #FlowOverFriction 29References

“Connected products allow us to go beyond what's possible... creating happiness”


References

Abe J. (2014) Differential Emotions Theory as a Theory of Personality Development. Emotion Review Vol 7 (2)

Baumeister R, Vohs K, Aaker J, Garbinsky E. (2013) Some Key Differences Between a Happy Life and a Meaningful Life. The Journal of Positive Psychology 8 (6)

Brown K. W. & Ryan R. M. (2003). The Benefits of Being Present: Mindfulness and its Role in Psychological Well-Being. Journal of Personality and Social Psychology 84 (4)

Csíkszentmihályi M. (1990) Flow: the Psychology of Optimal Experience (1st edition) New York: Harper & Row

Damasio A. (2006) Descartes’ Error: Emotion, Reason and the Human Brain. (New edition) Putnam Publishing

Ditty S. (2017) Transparency is trending. Fashion Revolution

Ekman P. (2004) Emotions Revealed: Understanding Faces and Feelings. (New edition) W&N

Kashdan T, Biswas-Diener R & King L. (2008) Reconsidering Happiness: the Costs of Distinguishing between Hedonics and Eudaimonia. The Journal of Positive Psychology Vol 3 (4)

Pretz J. Totz K & Kaufman S. (2011) The Effects of Mood, Cognitive Style, and Cognitive Ability on Implicit Learning. Learning and Individual Differences 20 (3)

Rampl L et al. (2016) The Role of Emotions in Decision-Making on Employer Brands: Insights from Functional Magnetic Resonance Imaging (fMRI). Marketing Letters Vol 27 (2)

Rigoli F, Chew D, Dayan P & Dolan R. (2017) Learning Contextual Reward Expectations for Value Adaptation. Journal of Cognitive Neuroscience 201

Seligman M. (2012) A Visionary New Understanding of Happiness and Well-being. Nicholas Brealey Publishing

Shapiro S. (2001) Illogical Positivism. American Psychologist 56 (1)

Sheldon K, Kashdan T, Steger M. (Ed) (2011) Designing Positive Psychology: Taking Stock and Moving Forward New York, NY: Oxford University Press

Wong P. (2011) Positive Psychology 2.0: Towards a Balanced Interactive Model of the Good Life. Canadian Psychology 52

Wong P. (2012) The Human Quest for Meaning: Theories, Research, and Applications. Personality and Clinical Psychology 2nd Edition

Zaltman G. (2016) Marketing’s Forthcoming Age of Imagination. AMS Review

#FlowOverFriction

30 #FlowOverFriction

© 2017 AVERY DENNISON - All Rights Reserved. Any reproduction strictly prohibited. Various third party trademarks and trade names are used herein and are the property of their respective owners. Some of the trademarks appear for identification purposes only.

Any resemblance to actual people, living or dead, or events, past, present or future, is purely coincidental. The products/concepts discussed or provided are not to be construed as an endorsement of any product or company.

Contact

For PR & marketing: Maria-Teresa Ortiz Marketing Communications Manager [email protected] @mariateresany

For business opportunities: Julie Rodgers Vargas Director, Digital Solutions and Brand Protection [email protected] @julievargasad

www.rbis.averydennison.com Avery Dennison 1319 Osnats Point San Antonio TX 78258 @avydenRBIS

Documents

#FlowOverFrictionmyrbis.averydennison.com/digital-edition/flow-over... · human expectations, shopper experience and customer intelligence. It offers strategic and practical insight