How controlling your recommendations system can drive sales growth
Greg Cox, chief product and technology officer, Experticity.
It’s impossible to open up a business publication today without reading something about the changing landscape of retail. First, the mom-and-pop shops disappeared, then established retail doors started closing, and now some big box staples are shutting down. There is nuance, of course. Some categories – consumer electronics, for example – have faced a steeper downturn than others, but it’s impossible to deny the fundamental shift that’s underway. Yet relatively little is made of what is a leading indicator of this shift: the decline of traditional retail as a system for distributing product information, advice and recommendations.
One thing hasn’t changed. Consumers still need help, particularly when they’re making a considered purchase. Yesterday, most of that help came from a sales associate, but today it comes from many more places. Before making a considered purchase, 82 percent of people do research online. Consumers are more likely to find help in their online and offline social circles, and in the reviews they read on e-commerce product pages. Product experts, the people who give advice and make recommendations, are everywhere. They’re the ski-instructor at Snowbird, our IT-specialist neighbor, a beauty vlogger on YouTube, the guide on our fly fishing trip and the professional chef we meet at a dinner party. They have these buying conversations every day, making fifteen times more recommendations than the rest of us.
Consumers need advice and recommendations that they can trust
Consumers also expect more from these product experts than ever before. If you’ve been in a retail store asking for advice recently, you may have found yourself in the position of knowing more about the product than the sales person after just a little bit of cursory online research. For this type of self-informed customer, general advice and generic recommendations no longer cut it. As consumers, we’re less interested in the best product, and more interested in what is best for us. We’re more cynical than we used to be, and we’re very aware that commissions, spiffs, and other incentives might influence someone’s recommendation – whether it’s in a store, an online review, or an Instagram post.
The impact on brands is profound. In a pre-Amazon world, brands knew exactly where to find the product experts that mattered to consumers: All they needed to do was look to their retail relationships. Now retail sales associates (RSAs) represent only one subset of the experts that matter. Without access to other groups of influential experts, brands have no direct way to educate them about products. And they have no systematic way to put newly launched products in their hands. They’ve lost the ability to give them the first-hand experience that is so critical to an authentic and useful recommendation.
Brands need feedback from experts
Also lost to the brand in this shift is an important source of consumer information. Companies that sell consumer products can survey and interview RSAs to solicit their product feedback, and get their observations of consumer behavior. What questions are shoppers asking? Where do they go in store? Which competitors are hottest? What do consumers really want? Today brands need to get beyond retail and speak to all product experts. Quantitative and qualitative research is valuable, but it’s no replacement for the human-to-human interactions that happen between product experts and consumers.
There is good news
The same technology that’s killing retail as we once knew it, also provides the means to reach and engage this expanding population of product experts. We can find them online, where they are raising their hands – @-mentioning brands in social media, showing off their expertise in blog posts and reviewing products on ecommerce sites. We can give them the ability to build a profile with credentials that reflect their expertise. We can use big data and machine learning to figure out which experts matter to a brand, and which brands matter to an expert.
And we can create sophisticated experiences – web, mobile and offline – to give special access to the product experts that matter the most. Access to early product information, access to entertaining product education, access to discounted products, the ability to give input that shapes products of the future, and recognition as a product expert. Crucially, this access needs to come with no strings attached. Brands must resist the urge to require a quid pro quo. Instead, they should trust in their product’s benefits to drive the recommendation. Ultimately, if they can’t look to their products to make the difference, then they have bigger problems to solve.
Retail is no longer the primary source of product experts, but it remains an important place to find and empower them. Because the bar has been raised on the quality of recommendations, product education for RSAs is more important than ever. Even more so because these RSAs are people with lives outside the retail floor. They are giving advice online, offline, and in line at the supermarket. They are building careers and establishing their credentials as product experts. Brands need to build relationships with the best RSAs that go beyond their employment status. Ultimately, it isn’t their employment at a retailer that makes them a product expert: It’s their knowledge, experience and passion.
The new reality of product advice and recommendations represents a huge challenge to brands. The crutch of traditional retail is gone, but the network of product expertise that has replaced it is much more powerful. Brands can leave recommendations to chance, or they can actively increase the likelihood of quality recommendations from the people who matter most: product experts. For the brands that take control, this represents a new and massive source of differentiation.
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