Moderated by Marisol, NFI Retail Forum is a private meeting of our trusted network in the Retail sector to exchange past learnings, and inspire ourselves to build a better future. It was presented in three blocks. On each block, we discussed with an established company and a challenger from each sector.
With the hope of COVID-19 vaccines becoming available to the population within the next month, preparing for the post-COVID era becomes a top priority. That's what we did on November 26th, during the NFI Retail Forum moderated by Marisol Menendez (Head of Open Innovation at NFI) in which our trusted network exchanged learnings and trends shaping the future in regards to sales, emotions, infrastructure and customer experience around payments, and connecting in-store with digital experience.
Sales today: Emotional Sales
Juan Calos Jimenez (Sales Director at Puma Group) is a believer in a sustainable and better world based on the relevance of emotions. It is no coincidence that 80% of decisions we make are based on emotions. Garner predicts emotions will be a big portion of tech in the upcoming years. Emotional selling after COVID-19 pandemic will mean there is a common effort from brands to create more quality in the relationships and content, decluttering the messages customers are exposed to in order to ensure relevance. During our conversation, Juan Carlos proposed a more holistic perspective to Sales (Emotional Sales) with a five-steps go-to-market strategy to manage the full chain of client relationship, that calls for both full confidence among stakeholders, as well as sustainability and social responsibility:
Start with the Mission: It's critical that employees know why the company exists and why the connection with the consumer is important. This is a great selling argument.
New way of Planning: Change the mindset in which the sales team approaches the account. Sales Rep must have a people-centered mindset in which there are no sellers and buyers but individuals interacting (emotional selling). We also live in a digital world and we have to make sure we know how to use the tools effectively (e.g. e-commerce and social media) (digital selling). It is important to connect to customers on a deeper level.
Full integration model (FIM): Promote radical change in how we make a relationship with the accounts. Traditionally, the company has a goal that is often different to that of the account/customer. The proposal is to break the borderline between account and supplier, working towards a same common goal as a joint venture. It could go as far as integrating the PnL
Point-Of-Sale (POS): Provide the retail, as the owner of the POS, the best tools to engage with the consumer and provide the best experience possible. This is a paramount responsibility of brands.
End Consumer: Replace a one-sided product selling approach to an emotion-based conversation.
COVID-19 has turned content into the backbone of the way we relate as a society. In addition to a change in mindset within our companies to perform better, Cristina de la Peña (CEO at Synapbox) believes we can leverage available information and tools to understand our consumers on deeper levels.
Although data gives marketers insights about how brands connect to consumers, Cristina thinks current methods are failing to answer why we connect in certain ways with some brands or specific kinds of content. According to her, focus groups and scenario planning are outdated methods, hence, no longer effective for emotion-based communications with consumers whose behaviors are constantly changing.
As we are exposed to vast quantities of content, brands need to stand out from the noise and be relevant. There is an increasing need to identify how emotions relate to performance. That's why Synapbox developed a human-centered AI to optimize and predict relevant interactions among brands and consumers in real time, using aggregated data of tracked biometrics and behavioral reactions towards stimulus (in this case, content). "With Uber we actually achieved to understand what were the elements related to a 50% reduction in cost of acquisition for a user to get a trip - that's huge", she mentioned.
Both Cristina and Juan Carlos agree on one key message: emotional management is not just a “nice to have”, it has an important effect in sales and ultimately, in the bottom-line.
Payments and checkouts
Emotions are not strange to payments - they are usually a source of stress, especially when it doesn't work. That is what Lars Sjögren (CEO at P27 - The Nordic Payment Platform) and André Lovestam (CEO at Zwipe) shared when discussing regional challenges and opportunities arising since the outbreak of the COVID-19 pandemic.
P27 is the largest project on payment infrastructure in Europe, standardizing payments through a ‘superhighway’ that will connect 27 million people in the nordics and beyond. Zwipe is pushing the boundaries of new card payments towards a contact-free experience.
While P27 exists to reduce friction (and emotions) involved in payments through standardization of payment infrastructures, Zwipe works on biometric payment cards. They both agree that there is huge transformation happening in the payments sector. IOT is changing the way we interact with people and bots.
COVID-19 pandemic has dramatically increased the growth of contactless transactions, particularly in the nordics: In Norway, the share of contactless transactions has increased from 35% in January to 77% in November; in Sweden, from 44% to 60%; and in Denmark and Finland the contactless share is actually 86% and 70%, respectively. On the supply side, technological advances have brought the cost down dramatically.
However, André claims the benefits of biometric over contactless technologies in payment cards: further convenience, privacy, and security (the biometric data is not connected to any database that could be hacked and stays in the card itself). Studies done by Zwipe show that customers are willing to pay for biometric payment cards and there is no need to get new payment terminals for it to work. From the retailer point of view, this opens an opportunity for differentiation in a way that can also be profitable depending on the customer's segment. There is also significant progress globally in central banks for digital currencies.
The challenge remains on having disconnected or not standard payment processes and infrastructures across markets. As Lars Sjögren puts it, we’re transitioning away from cards; from batch payments towards real-time. Now it’s time to explore what real-time can do for us.
Digital Strategy and Future
With the lockdown, companies around the world accelerated things they were already working on within the innovation or digital transformation space. We explored this new context from other of our speakers, that she calls The New Convenience: People have moved from social groups to bubbles with close friends and family, timelines have changed from “soon” to “now” and this has created new needs in terms of how to shop. Prior to the pandemic, convenience was a feature retailers could offer to customers, typically offline, but now they do not have any other option if they want to stay relevant. Moreover, this convenience has to be translated into the digital world. This means not only being able to shop online and enjoy same-day delivery, but also, being able to choose the day and time to get the items delivered. Another interesting aspect that came to light is the need for a personal touch. For example, when shopping beauty products online, customers still need professional assistance in choosing the right products. These questions are not typically something customer service can answer. There is an ever-increasing need to bring a human touch and extended capabilities (e.g. visual search) to digital experiences.
“Omnichanel is in the past”. Digital strategy isn't only digital. “Nowadays we have evolved into one funnel (the brand) that offers a great experience independently on the media or channel”. Gaurav Mehta (VP and Global Head of Alliances and Ecosystem at Capillary Tech) also mentioned the relevance of integration through the customer journey: online and offline are no longer disconnected silos with parallel strategies. This is why consumer data platforms gained traction during this year. Capillary provides a consumer data platform to brands and retailers in over 30 countries. Through their solution for loyalty programs they have identified key factors of consumer engagement success by understanding consumer behavior both before and after they have adopted the loyalty program (e.g. are they buying more or less, what are they buying). In this sense, important variables are: the way the program is designed, how generous it is, how have you defined your tiers, how have you understood the segment of the customers and placed them in a particular tier, what is your expiry strategy, what is your point-earning strategy. In terms of behaviors, they have identified that instant gratification is one of the best conversion strategies that also excite customers.
In times of COVID-19, they have seen an increased interest from retailers for loyalty programs to ensure customer retention and claim that customers who successfully adopted these programs spend twice as much as others.
Although there have been some fears around e-commerce overtaking physical stores, both Gaurav and Cristina agree that this is not something that will become a reality in the near future. Instead, the prediction is that physical stores will adopt more technology to track, know, and engage with customers through relevant interactions that empower brand visibility. Both channels will coexist and feed each other to provide a seamless consumer experience.
New Retail Frontier: The Last Mile
Online sales have blown up during the COVID-19 lockdown and some of the statistics are mind-blowing. According to Tom Doyle (AVP EMEA at Bringg), the future challenge of last mile delivery isn't really a logistics or supply chain problem, but rather a data problem. The delivery has to be cost effective, convenient, and meet customer’s expectations, while the product must be available. While consumer expectations are sky-high today mainly set by companies like Amazon, Uber, and Netflix, they are going to be even higher in the upcoming years when the majority of consumers are Millennials and Generation X and Y. We can agree 2023 is today, because COVID-19 accelerated advances that were predicted to happen only then in most sectors. Some retailers do not even have the right infrastructure today to serve the online sales within the promised timeframe. That is what Bringg is working to solve in over 50 countries and also the reason retailers are moving from one fulfillment model to a few of them (deliver to a locker, pick-up, same day delivery, next day delivery, etc). The transformation is not only technological, but also strategic - the company purposely needs to be ready to transform its supply chain and last mile operations and get visibility on what happens after checkout. The good news is, by implementing platforms like Bringg, retailers can choose which metrics to prioritize (e.g. sustainability, cost, quality, availability) to provide the best customer experience.