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The DigiTal BaBy

ProgrammaTic commerce™ anD The DigiTal reTail revoluTion

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The challenge of shopping for your babyBecoming a parent is a physical, emotional, organisational and logistical challenge. Many aspects of parents’ lives will change forever, and one element in particular is the change to shopping habits and the contents of shopping baskets... be they physical or virtual.

In addition to the sheer volume of new products to buy, another challenge is that babies are always changing, so not only are you always having to buy products, you’re also constantly having to tweak what you buy – as your baby gets bigger, so does its nappies. Trying to keep up with all this change, and making sure that you have the right equipment and products for your baby, is beyond difficult.

No parent wants its baby to do without, and certainly not when it comes to products related to their health and wellbeing. But most parents have experienced a moment when they have forgotten to restock wipes or nappies. To be honest, it’s surprising that parents don’t forget more often; parents are shattered after months and years of interrupted sleep.

Organisations need to help customers, and help themselvesWhy then do we leave it up to the parents to ensure that they have the proper provisions? Why do companies, whose job it is to sell these products, not see the opportunity they have to make their customers’ lives easier, while increasing loyalty through ease and convenience? Surely such a win-win shouldn’t be ignored.

Imagine if all of these products, so essential to the smooth running of the household, were easily re-ordered, or even re-ordered automatically? Imagine if the age and size of your

baby could be tracked, and the right products sent to parents at exactly the right time? Wouldn’t that be a load off parents’ minds? And imagine if, by virtue of the convenience, customers remained more loyal to their brand or retailer of choice? Well this future is coming, and it’s called “Programmatic Commerce”*.

This article looks into how Programmatic Commerce and its principles can be implemented, using baby care as an example. Any organisation operating in today’s digital-first world should be thinking about the future development of its ecommerce strategy and how it can best serve its customers’ future needs. In the case of programmatic, this future is already underway, and brands, retailers and smart device manufacturers – as well as you and I – have a huge role to play.

The future is programmaticProgrammatic Commerce is a term coined by Salmon to describe the phenomenon of connected devices making purchase decisions on behalf of consenting consumers and businesses based on pre-programmed parameters and learned preferences. This process of automated purchasing has been driven by the rise of the Internet of Things and smart devices, and by the increasing comfort of customers to share their data.

This new approach to ecommerce has the capacity to change the way that many industries operate. It has the capacity to fundamentally shift brand loyalty, reduce the propensity of customers to brand switch, and to increase convenience, speed and ease of doing business for the customers themselves. One of those industries prime for a revolution is baby care.

*Programmatic Commerce is a trademark of Salmon Ltd.

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The building blocks are already in placeWhy is the baby care industry such an opportunity?

Programmatic Commerce works best where patterns of buying behaviour can be tracked and/or estimated. Most babies are tracked along a scale using the very rudimentary elements of age and weight, either of which can either be estimated, or with a little thinking and investment, known.

The potential of this huge group of new customers buying products, seeking information, and building new brand loyalties has long been known. Organisations have already attempted to harness the potential of this group by creating communities around new parents and the birth of babies in an attempt to grow their revenue.

Take Boots for example. Its Parenting Club allows parents to sign up from pregnancy to when their child is 3 years old. It offers parents 10 points for every £1 spent on the Boots Advantage Card, personalised offers, a free magazine and expert advice, and gifts for you and your baby. What does Boots get in return? It gets data about a parent and its baby. Using this data it can grow sales through targeted offerings. Everyone wins right? Kind of.

And what about Bounty? Anyone who has had a child knows that when you’re still in the maternity ward, Bounty has a pack delivered to you with the first essentials that you need, the concept being that you will then sign up to the Bounty community which gives new or expectant parents free packs, development emails, offers and a community.

Then there’s the FMCGs and their nappy brands. Take Pampers for instance. Its Pampers Club app enables you to gain loyalty points by taking

pictures of your receipts as proof of purchase. These points can then be exchanged for rewards for you and your baby from the Pampers Club brochure.

So essentially, all these groups give you rewards for your data – and that’s mighty fine.

Yet the reality is that most new parents are facing other, bigger challenges than who offers the best personalised reward. In fact, research conducted by the Pregnancy, Birth & Baby national support service in Australia in 2015 (read more here) found that the 5 main challenges facing new parents were:

1. Not enough sleep (for the parents)

2. Sleeping and settling (for the baby)

3. Feeding the baby

4. Recovering from childbirth

5. Coping with the ongoing care of other children.

What new parents don’t have is a lot of time. What they need is ease and convenience, and help.

What if in addition to the personalised offers in exchange for their data, parents actually had their lives made easier by those organisations with whom they exchange their information?

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how can brands take these relationships to the next level?That’s where programmatic can come into play by fusing hardware capable of capturing information, data about the parent and baby, and the ability to automatically replenish.

Let’s take the changing mat as an example. What if, when the customer signed up for Boots, Bounty or Pampers, they were either given, or offered at a discounted price, a changing mat which also had the ability to weigh their baby? This hardware could be linked to an online profile with one of these suppliers.

This would allow the ongoing tracking of a baby’s weight, and give an insight into its size. The size of the baby, would in turn affect the right size of nappies for the baby. The parent could be notified that they might want to consider increasing the size of nappies and be asked if they’d like to order.

And what about replenishment? Perhaps, using the example of Amazon Dash, which has launched in the UK, buttons could be added into the mat and used to re-order nappies, wipes and ointments when they were running out. A simple press of one of the Dash buttons is all it would take to get some new stock in the post.

Now that would save time and increase convenience. It would also have the added benefit of ‘locking in’ the customer to a relationship with one brand and its associated products. Both sides – customer and organisations – could enjoy the mutual benefits.

Or could you even take it a step further? By tagging specific products and introducing connected hardware – such as nappy storage boxes or dispensers – the stock levels of these items could be tracked automatically, and without any input form the customer, new products could be ordered when stock is running low.

Imagine knowing that an organisation like Boots or P&G is tracking your baby’s development and making sure that you always have the right products at the right time. All you need to do is exchange your data, and give them permission to re-order on your behalf. And all those personalised offers and rewards that were being given out before? Well those can still be applied or offered. Isn’t this the ease and convenience that new parents need and the sticky relationships that brands crave?

losing control?The flipside of these advances is the issue of trust; the rather Orwellian feeling that your baby is being watched (at least from a data perspective) and the fear that the system could go wrong and your house taken over by re-ordered nappies.

All of these are valid concerns, but each of them totally manageable.

Take data for instance. If you buy your nappies via your supermarkets or retailers like Boots, and use a loyalty card, then data about your bundle of joy is being shared anyway, and inferences about its age and weight being made. What Programmatic Commerce does is make customers’ data work harder and better for them – helping to make their lives easier.

In terms of re-ordering, the automation of this process can also be managed. At first, the advice is to start slow, to allow a human approval before automatic re-ordering takes place. After time, once the customer feels at ease with the frequency of re-purchasing, a fully automated system can be used. And of course, the easiest way to allay customers’ fears is to ensure that the relationship can be halted and changed whenever they want.

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lock-in and lock-outThe future of programmatic and the baby industry will be defined by first mover advantage. The organisation that makes its customers’ lives easier through this new ecommerce approach will be able to ‘lock in’ customers to an ongoing and mutually beneficial relationship.

Those organisations which wait risk being ‘locked out’ of the relationship, with extremely limited opportunities to tempt customers back.

This is not only a new dawn of ecommerce, but a new dawn of loyalty; when computers, data, ease and convenience define the brands that are bought, and the propensity to switch brands gets ever smaller.

conclusionSo watch this space. While the act of giving birth may not have changed since the dawn of time, the act of parenting may soon be revolutionised by a data-driven and data-led replenishment model called Programmatic Commerce.

So get familiar with this new concept. Industry experts are citing it as the next big thing in digital, and tellingly, your customers will be ready to embrace it within 2 years. Salmon has recently conducted a major piece of research into UK consumer attitudes to the coming programmatic age, highlighting its impacts for brands, retailers and smart device manufacturers.

Download your complimentary report at Salmon.com.

Get in touch with Salmon at info@salmon.com.

about the author

hugh FletcherDigital Business Consultant, Salmon Ltd.

Hugh helps organisations prepare themselves for, and implement, digital change. This strategic consultancy is based on innovations and developments within the digital commerce sector. With close to 12 years client-side experience – much of that with Audi – he brings a unique perspective forged by his client experience.

Link it to: https://www.salmon.com/en/programmatic-com-merce-report/

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