The New Era Of Individualized Commerce
Digital consumers have taken the wheel. What can marketers do?
Everywhere we look, technology is accelerating at breakneck speed.
In the palm of our hands, we hold more computing power than NASA had to send Apollo 11 to the moon. It’s not surprising anymore to see news from some distant, remote corner of the world go viral in seconds. Massive technological advancements have dramatically impacted customers, and their expectations are higher than ever before, in a world where they can access anything anywhere anytime.
As marketers, we have to step back and ask how all this impacts the relationship we have with today’s consumers.
It used to be easy for marketers to define their brands by simply broadcasting what they were all about through TV and radio spots. But with the advent of social media, customer reviews, and smartphones, that power has shifted, and more often than not, brands are now defined by the consumer rather than the marketer.
While the pillars of the broadcast era were segments and ad spend, in today’s new digital age, the pillars are individuals and data. This new age is defined as individualized commerce.
Individualized commerce is a customer-centric strategy that puts the individual at the heart of the brand experience. This means responding to the specific context of consumers (time of day, geolocation, etc.), their individual interests, previous experiences with the brand, and current intent.
As a consumer, you are intuitively presented with information that’s relevant to you before you even have to ask for it. In many areas this approach is becoming the norm, and we can all feel the difference between an uninformed experience and a more intelligent experience (although oftentimes it’s so natural, we barely know it’s happening). These intuitive experiences are typically characterized as being “individualized.” Individualization has already arrived in many surprising places and is setting such a high water mark, those who don’t upgrade their experiences look and feel antiquated and clunky.
The transformation to individualized commerce has already happened in radio and music. Radio was once a broadcast, segmented channel that reached broadly defined audiences by creating large buckets of listeners. There were (and in many ways, still are) R&B, adult rock, and a dozen other segments.
As a listener, it wasn’t about you. It was about you, plus 100,000 other people kind of like you. You were lucky if you liked every other song. And you had to put up with a lot of commercials. Fast forward to today and look at how music has evolved with Spotify, Pandora, and Apple Music. If you don’t like one of the songs when you’re using these applications, give it a thumbs down. Mark as favorites the songs you like the most. And the result of these expressed interests is that now you have your own dedicated stations tailored to your individual tastes and mood—available to you anytime, on demand.
Up until recently, Google’s results depended on collaborative filtering. Basically they used other people that had similar searches to present the results Google thought would help the searcher the most. But at a certain point, the results peaked in terms of their relevancy, and Google saw an opportunity to make them even more targeted.
And while you may not have noticed this change, Google has shifted to an individualized approach. To make results as relevant as possible, Google leverages the user’s past searches, location, time of day, and all the elements Google could tie to the individual. Now, everyone experiences this increased relevancy, and it’s so intuitive that you may not have ever noticed it, but you’re certainly benefiting from it every day.
Other examples of individualized commerce are sitting right in the palm of your hand. By and large, the user experience on a smartphone is centered on its owner. By now, most of us are accustomed to getting an alert that’s something like: “Dinner with the boss, 7:30. Traffic is light. Leave in the next 10 minutes to be on time.”
Here’s another example: iPhone’s QuickType and the Google Keyboard on Android both do a ridiculously good job of predicting the words you’ll want to use in any given context. They adopt to your style and language, and even provide response options differently according to whether your conversation is with business contacts (more formal, for example, “yes”) or friends (more casual, for example, “yeah”). And weather alerts tell you if it’s supposed to rain exactly where you are standing in the next 15 minutes. The list of individualized experiences on smartphones is never-ending.
While there are great examples of where individualized commerce has already taken hold, there are many more places where it hasn’t. And in those places, the consumer can feel that these experiences are not as intuitive and easy as what they experience elsewhere.
For example in travel, it seems like consumers have to start over with their preferences for hotel category and rental car type, while frequently searched itineraries are not always recalled. Simply having a departure city default to the airport that’s geographically closest to the user isn’t enough.
For retailers, it means evolving way beyond sending me three emails a week about children’s items, just because I once bought a T-shirt for my nephew. Retailers can do a better job at paying attention to not just my past, but also my current interests as a unique individual. Consumer expectations are being set every day by brands that have either already pivoted to the individualized commerce approach or by startup brands that are innovating faster than their aged competition. The digital savvy consumer is expecting great experiences wherever they turn, and unfortunately for many brands, that puts them on a very fast timer to potential irrelevance.
This new era of individualized commerce is not only beneficial for the consumer, it’s beneficial for the companies. Successes in individualized commerce are measured by higher conversion rates, higher customer satisfaction, and higher brand loyalty.
These are all great things that brands inspire to earn and maintain, and individualized commerce gives them the tools to create that bond with their consumers more than they ever had before. The question is: Which brands are going to grab this brass ring in an era of individualized commerce?