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Let's get phygital: It takes more than digital data to drive growth

Pietro Leone

Global Chief Operating Officer

Geometry Intelligence

Pietro.Leone@geometry.com

 

 

This year, Amazon Prime Day 2017 reached new heights, with year-on-year sales up 60 percent thanks to a record number of Prime members shopping across 13 countries.

 

Meanwhile, pure e-commerce companies are moving into the high street, as news of Amazon’s acquisition of Whole Foods leads to inevitable speculation that previously digital pure-plays will ultimately all open physical stores. In point of fact, China’s Alibaba has announced a physical store strategy.

 

Online retailers were once expected to destroy their bricks and mortar cousins. Instead, the two worlds have merged, and the reality is phygital.

 

If shoppers are no longer thinking in terms of channels, why should stores and brands?

 

In this new phygital world, the traditional purchase decision journey (PDJ) is losing its relevance. The role of traditional demographics and attitudinal forecasting is slipping; just think about recent election results on both sides of the Atlantic.

 

Many consultancies continue to deliver analysis based on digital data via tech tools. I believe this is an easy sell that fails to dig deeply enough to deliver real insight into what drives purchase. True, digital plays an important role in our understanding, reducing errors that can arise when people incorrectly recall their own behaviour. But this is just one side of the coin. True purchase-decision insight comes from a blend of self-declaration and digital. By reading both, we can reduce the level of error almost to zero.

 

In my experience, if we ask hundreds of people about their buying behavior in a particular, we uncover a truth and convergence far richer than could be achieved simply from a journey through the digital world.

 

José Neves, founder, co-chairman and CEO of fashion e-commerce platform Farfetch, validates the need to think beyond digital data only: “How can you really be serious about data when 92 percent of the action is happening in stores and you are not collecting data in stores?” My view exactly. With the right tools, we can judge how a store visit has impacted on online purchase behavior – how the store manager has influenced the decision, and so on. This would not revealed in digital-only analysis.

 

The future of business acceleration is in a blended purchase decision journey.

 

The methodology of many PDJs sits in mapping business against shopper expectations at one end, and creating a marketing map leading to the communications strategy at the other. My view is that the magic comes from a bridge between the two, which aligns a business to shopper understanding, assessing what the company has to offer and what the customer wants to buy. This blend of purchase decision journey insight is essential to business acceleration in a future where I see business models organized and innovating according to behavior – not product.

 

In the complex and highly complicated telecommunications sector, using this blended model, we have identified a unique consumer segments with differentiated behaviors. These 14 segments spanning mobile and broadband use have allowed us to create a focused acquisition strategy for a brand in the sector. There is a tailored messaging strategy for each segment, which helps improve marketing budget efficiency, and is a completely new way to look at prepaid and post-paid segments. It provides a clear roadmap to accelerate significant customer conversion.

 

More recently, we have used this methodology to support  a premium-service global airline that was being, challenged by low-cost carriers. We discovered that, faced with complicated and at ties overwhelming choice, customers typically surrender to price-driven decisions, favoring low-cost carriers. Our recommended route to market was to shorten the journey travelers take when booking a flight, engage more during the inspiration phase when excitement for the travel-to-come is at its highest level, and, persuade them to go directly to booking options and seal the deal.

 

Customer behavior rather than product will drive business success.

 

Customers will soon expect brands and retailers to know exactly who they are as soon as they make contact. And shopper knowledge is critical to help businesses accelerate performance through customer behavior rather than the product and service. That future is already here.

 

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