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While everyone is talking about transformation in the world digital age, it’s easy to forget that the biggest threat to business doesn’t come from machines, but from “old-school” companies that act mechanically. So how do you successfully future-proof a company for the fourth industrial revolution? You remain human, even when you face digitization.
In the face of ever-changing consumer trends, only the most adaptable companies can stay afloat and thrive. And yet too many companies assume that their target audience consists of static individuals with fixed interests – a mindset that thwarts even the most strategic company. Figuring out who your true customers and consumers are, what they want, and how to serve them isn’t a one-off process or mathematical equation. When it comes to keeping up with consumer trends, B2C companies must follow the retail ritual: Identify, Listen, Observe, Innovate, Iterate.
In order for businesses to give their customers what they want, the entire business must be aligned with who the customer is and how best to serve them. Employees working in their siled roles too often fail to align their own priorities with organizational goals. Leaders need to encourage teams to look beyond their individual functions to appreciate the bigger picture of the business—that is, reaching and satisfying consumers. For a B2C company to run like a well-oiled machine, it needs to be driven by people who share a common understanding of success.
Of course, none of this is possible until companies know exactly what their “real” customers are compared to their “real” consumers. Prior to 2019, global building materials company James Hardie focused on marketing to builders and contractors rather than to retailers (the real customers). To better understand the people who influence dealership decisions, a specialist marketing team was brought in to analyze the demographic of homeowners remodeling their homes.
The results showed that women homeowners were the key decision-makers in the remodeling process – the real consumers – and so James Hardie’s team set out to reach this target audience in the market. By hiring popular DIY TV hosts Chip and Joanna Gaines from Magnolia Homes (and fixed upper material)The company’s reputation and trust with women homeowners skyrocketed, which in turn represented significant value for the real customers (the dealers).
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Once you’ve identified your true customers, it’s time to start listening. While machine learning is great for tracking consumer behavior, there is no substitute for direct, human conversations. While this communication can take the form of online surveys and focus groups, you’ll get the most authentic and useful feedback when you meet your customers in their own environment.
In the consumer goods division of multinational 3M, that lesson took a rare, sticky form: a 3×3 inch Post-It note. While product sales were booming in the US, numbers in Asia were grim. To better understand this discrepancy, 3M sent a team of marketers and R&D personnel to Japan to investigate. The feedback from Japanese consumers was overwhelming and unanimous: “It’s just too big.”
After listening to consumers, you also need to watch what they are doing. In contrast to computer analysis, holistic observation requires human empathy. By observing consumer behavior first-hand, one can identify not only usage, habits and attitudes, but also unmet needs – laying the groundwork for true innovation.
Through on-site observations, 3M was able to shed light on a key design flaw of the Post-It note: its shape did not yet take into account the way other cultures write their languages - a fact that had not been taken into account in early prototypes. While many Western cultures write left-to-right using the Latin alphabet, Japanese consumers write top-down using hiragana, katakana, and kanji characters. As such, the size and shape of the only Post-Its in existence were not conducive to the global workplace. By failing to think about a universal design early on, 3M severely limited its market penetration in Asia.
Similar to handwriting, the mechanics of our work are often unconscious – especially when it comes to everyday or domestic tasks. Taking unconscious habits into account is essential for innovation. For example, while home appliance makers like LG and Samsung were prioritizing more high-tech features for their multi-mode washer-dryers, Electrolux took a different tack. Between 2012 and 2014, Electrolux shifted its focus toward acute, consumer-centric research: instead of boasting a suite of electronic devices and a fleet of engineers; The company conducted a series of behavioral studies.
Viewing the footage from the staged laundry rooms revealed patterns in consumers’ laundry habits that consumers had not expressed in previous surveys. In order to throw the dirty laundry into the washing machine and start the washing machine as quickly as possible, consumers tried to do so without touching the dirty laundry – and by pressing as few buttons as possible. Such crucial, simple facts went unnoticed or undervalued by the competition, but Electrolux was able to use these insights when developing a new model.
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The difference between innovation and invention lies in both foresight and imagination. For companies to truly innovate, they must not only understand their consumers’ existing behaviors, but also anticipate their future preferences and deliver a personalized experience tailored to their unmet (and often unmet) needs.
By investing in their true consumers, 3M and Electrolux have helped drive change through innovation. By interacting directly with Japanese consumers in their own region and language, 3M was able to bridge the cultural divide and design a new form of Post-It that better serves a global workforce: the slimmer 0.5″ x 2″ Post-It flag an international hit. Electrolux’s next washing machine also proved to be a crowd pleaser, both in form and function: the sleek design comprised mainly three simple buttons – colours, white and activewear – and the machine’s new door function enabled target groups (women with an average height of 1 .70 m you can open the machine with your hip, which makes for an even more efficient and hands-free operation.
If your company has been able to create new products and solutions by identifying, listening and observing your real consumers – congratulations! Now do it again. That’s the nature of B2C business. Like any relationship between a business and its target audience, this one needs nurturing and nurturing. The retail ritual is just that: habitual and ongoing. The storyboard is constantly being erased and redrawn. Despite AI’s increasing predictions, you’ll never know what consumers are thinking unless you interact with them as human beings with ever-evolving needs and wants.