Note: This post was originally published in the D!gitalist on April 26th, 2017
The most disruptive force in the consumer products (CP) industry today is the consumer. Always on, socially networked, and hyper-informed, they’re in a position of power like never before.
How things have changed.
In the old days, many consumers would accept poor buying experiences – mostly because they had nowhere else to go. But today, CP companies can no longer depend on captive consumers who are reliably channeled to a few retail outlets in the physical world, where the bulk of control exists on the supply side of the equation. In a digital economy, consumers can buy anywhere – in an instant.
The new baseline
This change has led to an emphasis on outcomes. Why? Because when consumers can go anywhere, they need a reason to choose you. Nobody is saying that the product isn’t important. In fact, you need to be as solid as ever on that front, because with so many options to choose from, consumers won’t stand for poor quality. But today – at a time when there’s just so much more that goes into the consumer’s perception of value – product quality is the new baseline. It’s assumed. Get it wrong and you’re not even in the game.
Given this baseline, the action for attracting and keeping consumers is the end-to-end experience that you create and deliver for your brand. The negative spin on this is the “absence of hassle” argument – namely that for more and more consumers today, it’s just not worth it to have a frustrating experience when dealing with a brand. If that’s what you deliver, more consumers will go elsewhere.
While true enough, this perspective is limiting. What should really excite CP companies are the more positive opportunities to be had by focusing on delivering better outcomes. This is where personalization comes into play.
New opportunities for personalization
In a digital economy, sales and marketing teams have an opportunity to understand consumers better and more intimately than ever before – down to the individual. By monitoring social media and analyzing an abundance of available data in real time, you can understand consumer wants in the moment and respond with tailored offerings for a “just for me” experience that keeps consumers coming back.
As a side note, it’s important to distinguish personalization from options. The idea of personalization in a digital economy is not so much that you can offer (and manage) a dizzying array of different styles, colors, models, etc. That’s the old model of configurability – and with such busy digital lives, the last thing consumers want to do is spend time choosing from endless options. Today, personalization is more about delivering the right product and experience based on what you know about the consumer at the right time. This makes the experience effortless for your consumers – which is highly valued.
How does AI fit in?
But how do you execute? Artificial intelligence (AI) can help. A simple definition of AI is the ability of computers to think like humans – only on a scale that no single human can achieve. According to a new SAP white paper, Distilling Data: Machine Learning and the Promise of AI in Consumer Products, AI has great relevance to CP in its ability to act as “the missing link among three variables: massive data stores, mass personalization of products and customer experiences, and the ability to navigate and win in today’s complex business environment.” AI algorithms, the paper suggests, are able to:
- Find patterns and predictions across the large, highly complex data sets that are common in today’s CP landscape
- Predict, with remarkable accuracy, next-best action outcomes and embed these predictions in real-time transactions at massive scales
- Filter out and recognize bias from data-based facts
It’s the combination of accurate insight and the ability to act quickly – often in a predictive capacity, even before consumers know what they want – that makes AI an invaluable tool for sales and marketing teams in the CP industry. Leveraging these kinds of capabilities, companies can deliver tailor-made products and follow-on services that result in the just-for-me outcomes that today’s consumers are looking for.
There’s a lot more to say about personalization and the role of AI, but consider this a start. To learn more, dive into the white paper here.