Anticipate Needs to Earn Loyalty
By John Hennessy
According to Forrester Research, as covered by Chief Marketer, meeting the consumer’s current needs isn’t enough to guarantee success. A marketer must also anticipate future needs.
In a recently released report, Forrester analyst Christine Spivey Overby dubs this proactive approach “consumer-focused innovation” and outlines its three basic principles:
- “Consumers are active co-innovators.” According to Ms. Overby, “More and more, companies are using consumer insights to shape innovation from an embryonic concept to market
testing.” By way of example she cites Nestle’s “relationship centers” in France and Japan, where nutritionists, marketers and execs respond to more than 200,000 queries and
requests from consumers every year. - “Consumers’ latent needs are as important as their explicit needs.” This is a corollary to the rule of marketing that advises taking focus groups with a pillar of salt, since
consumers often don’t consciously know–let alone can tell you–what it is they want or need. - “Experience trumps products.” Starbucks is the oft-cited example here of how a company can distinguish itself by the experiential circumstances in which it wraps its products.
Or as Ms. Overby says, “Consumer products firms will avoid the commodity death spiral by selling experiences–not products.”
Moderator’s Comment: What can retailers and marketers do to help satisfy the future needs of shoppers?
I like the way Ms. Overby expands the marketing discussion to include the anticipation of future needs. She could add a fourth principle: Shopper purchase
history can be used to not only anticipate but satisfy future needs.
Shoppers who consistently purchase the latest fashions should be informed when the new styles arrive. This helps the shopper satisfy their penchant for
style, saves them time and increases sales for the proactive retailer.
Shoppers who are shifting away from prepared foods and showing cook-at-home traits should be supported through increasingly challenging recipes with expanding
ingredient and preparation options.
Retailers could use their purchase history to execute both examples. These and other examples based on thoughtful use of purchase history will make shoppers
more comfortable in their decision to rely more on a specific retailer. The net result will be more sales for the retailer. –
John Hennessy – Moderator
I agree with Warren that consumers cannot tell you what they need in the future any more than they can tell you what they want right now. I can’t envision a consumer waking up one day and saying, “I really need a Swiffer” and a star was born. All the historical data trends won’t be able to predict the new hot products, and focus groups…well, I’ll leave that one alone.
One thing I do know is that consumers do recognize a really good idea when they see it. So manufacturers must take a lead role in product development in the future. If they concentrate on this area, and retailers concentrate on service and shopping experience, then that combination will be a winner.
Often the best way to anticipate consumer needs in one industry is to examine the way consumers are behaving in another industry. Consumers don’t consider their needs in discrete categories, the way those manufacturing or selling the products do. To a consumer, many of their needs flow out of a consolidation of daily experiences – experiences between themselves, other consumers, and other products in their lives. Look at the Walkman – kids wanted to listen to their music, adults didn’t. Thus, the consolidation of experiences between consumers showed some smart marketer where an unmet and, most likely unrealized, need was. Future needs don’t usually drop out of the sky; they are built, layer by layer, until some clever marketer recognizes them. The only thing that distinguishes future needs from current needs is the speed at which we recognize them. Let’s look outside our industry and recognize that future needs are being built right now.
Is it really the retailer’s job to anticipate shopper needs? It seems to me that product manufacturers – from fashion to food – customarily lead this particular parade. Certainly retailers can provide innovative shopping experiences, but a box of cornflakes is still a box of cornflakes, whether you boogie through Stew Leonard’s or trudge through a dilapidated Albertsons.
Yes, Amazon and others offer unique and singularly captivating ways to buy stuff. But, the medium is the “stuffage.” (Will Marshall McLuhan haunt me for that?)
Banking on the success of a shopping “experience” is a crapshoot. I went to the Prom and had a great time. I went to the Prom and had a terrible time. The Prom-provided experience was identical in both cases, but emotions, conditions, Janie’s corsage, etc. have an unmanageable, unpredictable bearing on the final experience.
Here’s a related thought: We’ve all heard the term “quality time” used during discussions on parenting. This is a bogus concept because we can’t manage our children’s memories. They’ll remember what they remember, just as we remember what we remember from our childhoods. It’s random. The same concept applies to shoppers. We can’t manage their experiences. All we can do is consistently deliver the very highest level of service we can and hope for the best.
I would submit that consumers are generally competent at choosing what they want now from among available choices. But they don’t generally know what they are going to want tomorrow. This is a core challenge, which is why we study consumer behavior and attitude, not just their stated preferences or hypothetical ratings.
I’d also draw attention to Overby’s third point – regarding customer experience. Most competing products are interchangeable. The experience is the differentiator that matters. It’s not the coffee that counts; it’s the coffee bundled within the service and the selling environment.
Purely product-focused marketers tend to overlook the experience factor. I say it’s the real foundation of loyalty.
With all due respect to Warren, as a futurist myself, I’d like to believe there is something to what we do. That said, it is impossible to predict the future, but it is possible to help direct the future by shaping offerings to meet plausible future consumer needs. Of course, before that happens, we just have to know a lot more about the consumer than we currently do.
It’s interesting that this discussion about retailers understanding and anticipating consumer needs is connected with the discussion (below) about Amazon.com. Amazon.com is the leader, in the virtual world, of leveraging consumer information to build sales and shopper loyalty. They have been compelled to be more active in their marketing, as they need to try even harder than bricks and mortar retailers to remain “sticky.” To date, most of the bricks/mortar cats have been able to survive with the passive approach of merely presenting what they have in the store today. However, as competition continues to escalate, retailers will need to lean on the advantage they have as a physical retailer, which means not only anticipating consumer needs, but using their store environments to physically bring to life the ideas and the information and the inspiration that shoppers need to make confident purchase decisions and to fall in love with a retailer.
Retailing has always had a component of art, in addition to science. The growth of data and the analytical management of product assessment has tended to overshadow the art, which is more often about some individual’s vision and belief that consumers will like a product or an experience.
I believe that the sheer scale of both retailers and some of their suppliers today has limited the role of the art of retailing. It’s pretty hard to bet millions on gut feel and even harder to do so in a public company which tends to be risk-averse.
This is why the best retailers today are almost all regional rather than national, private rather than public, and have cultures that encourage dynamic change and innovation, even at the risk of failure.
The future is never a sure bet – but it’s a certainty that the past is not a perfect guide.
As our parents and grandparents were sold foods, groceries,
packaged goods, and other products based on the retailer knowing shoppers, a minimal amount of understanding / research for present and future needs of consumers, was done.
Needless to say, the lifestyles of today’s shoppers has changed dramatically, compared to ones of 10 and 20 years ago. As such, the demands and needs of consumers are in a continuous evolving mode. And here is where retailers, who do engage and monitor their shoppers and their competitors’
consumers, can stay ahead of the curve, if you will.
Each generation, and segments within, look to the same retailer to provide their present and future needs and demands.
So a retailer has to be multi versed, or determine what segment would be most profitable. Staying on top of the consumer can bring major sales and profit rewards for retailers by engaging the shopper and, in turn, bridges to loyalty. Hmmmmmmm
Most shoppers like a good idea when they see it and particularly when it comes to food and groceries. Obviously, in a lot of cases, shoppers do not even realize they wanted or needed something until they see it. That alone is why many people go shopping. And when you combine neat new items with a special shopping experience, then the magic happens.
Successful retailers must be innovators and be able to identify/predict things that will have appeal. Sometimes this can be achieved by using data, sometimes by watching what shoppers (and competitors) do, and sometimes by doing a lot of talking and listening with their customers.
Sorry, no magic bullets exist. Scan data and focus groups are about what’s already happened, not the future. Predictions are often more inaccurate than accurate. Remember the book, Megatrends? I was just reading Jack Trout’s “Big Brands, Big Trouble,” and he points out that three of the 10 “megatrends” written about were already well underway, and the other 7 never happened. He cites an endless series of how predicting consumer behavior, by well-known think tanks, has failed. To quote one more, from “Cyberia” by Douglas Rushkoff, “Futurism isn’t prediction anymore. It’s state-of-the-art propaganda. It’s future creation. Futurists put their clients in a state of fear and then explain that they hold the secret knowledge that can save them.” The best course I know of is staying close to the market, talking to people continuously, and going by the SWAG technique (Scientific Wild-Ass Guess).
Aw, rats. I forgot that one of the guys I respect most in the industry is a futurist. Sorry, Ryan. I tend to think of you in terms of “guru,” and not futurist. And remember, I was quoting someone else!