WILL PREDICTIVE MARKETING MAKE RETAIL LESS FUN?

Every retail leader has “build a better predictive marketing program” on their to-do list this fall. Savvy marketers are using their growing troves of shopper data to predict what customers might want to buy next,  and then merchandising these items at every touchpoint.

In many categories, it is beginning to feel like shoppers no longer need to stop and consider what they actually might want to buy; they just refresh their social media feeds and let retargeted ads remind them what is on their list. Author Kevin Kelly calls this the “filtering effect,” and he identifies it as one of a dozen technocultural trends that will reshape society by 2050. He predicts that in the coming years the retail landscape will shift from “mass personalization” to “mass customization.”

 In this not-so-distant future, shoppers will look to filters (brands, curators, friends) and algorithm-powered recommendation engines to deliver customized clothing, food, transportation, and more–on demand. In retail, this could mean that most if not all experiences will involve browsing and selecting from a highly customized set of options that past selections suggest a shopper will like. As Kelly notes, “the filters have been watching us for years; they anticipate what we will ask. They can almost autocomplete it right now...To some degree we will rely on the filters to tell us what we want.”

WILL DATA CREATE A RETAIL FILTER BUBBLE?

 This incredible ability to individualize the retail offer sounds great at first blush. Shoppers have too little time to wade through too many choices, and data-driven marketing is a powerful solution. But the promise of such a hyper-curated universe also begs the question: if the filters narrow everything, what is being left out?

As retailers get better and better at offering customers only things they are highly likely to want – are we building a retail filter bubble? One that may eventually diminish the retail experience?

 The concept of the “filter bubble” describes the result when a constant personalization of (mostly online) content isolates people from news and information that does not align with their existing beliefs and search habits. Many argue that putting on such blinders – knowingly or unwittingly – can create tunnel vision, narrow one’s worldview and foster a negative “groupthink.” This has led to a movement to encourage individuals to “pop” the news filter bubble and preserve the diversity of online news and content, and even tech players like Google have joined the effort.

While the consequences for retail may not be quite so dire, it is troubling to imagine a retail world where shoppers mostly browse and purchase items that an algorithm has determined they will probably like.

At best, that sounds boring and staid in a category and culture that values the novel and unique. At worst, it could leave shoppers feeling dispassionate and uninspired. In a heavily filtered retail world, it is not a stretch to imagine retailers will see less brand and product diversity in shopper baskets, lower trial of new brands, and have fewer opportunities to surprise customers with an unexpectedly satisfying product.

That last point is the stickiest for me. Research supports the idea that unexpected discoveries are a critical element of the retail experience. In a large global study conducted by McCann Truth Central a few years, two-thirds (66%) of respondents said that they are looking to be inspired while shopping and over half (57%) worried that they will discover fewer new things if companies always show them exactly what they are looking for.

Culturally speaking, we know that deciding to buy something (or not) is a way for shoppers to define themselves and express their values. Do we really think customers will be happy to cede the bulk of their purchase decisions to a faceless algorithm, no matter how sophisticated or precise?

CAN SERENDIPITY SAVE THE RETAIL EXPERIENCE?

 So if we worry that too much data will make the retail offering predictable and uninspired, what’s the solution? Serendipity.

Serendipity is the unexpected discovery of something you had no idea you’d want, in a time or place when you were actively looking for it. Like my new Blackwing pencil collection – the perfect gift for an upcoming wedding anniversary, discovered cleverly merchandised at the checkout counter of my neighborhood bookstore. Or the Mr. Davis undershirt brand I bumped into while browsing a high-end watch site. (Editorial note to my wife: Just looking, I promise.)

The thrill of the find has historically been a key part of the brick and mortar retail experience. It’s the invitation to browse the storefront window, the thrill of the hunt during a flash sale, or the unexpected find in the holiday catalog. However, the move to data-driven transactions is crowding it out.

I recently heard the President of Chronicle Books describe an emphasis on serendipity as a key part of the retail strategy that has helped the company thrive where competitors struggle. “Our books have to be discovered,” she noted, underscoring the fact that simply battling it out on the shelves of Barnes and Noble or building a better recommendation algorithm would not cut it for the brand.

There is a kernel of wisdom in this strategy for all retailers. Besides pushing for more sophisticated big data competencies (which we surely should continue), it’s time to consider how to design a little bit of serendipity into the retail experience. It will keep shoppers out of a retail filter bubble and ensure that we continue to find ways to surprise and delight them.

A few real-world examples hint at attempts to design an element of discovery into a brand experience. Square recently opened curated showrooms. Havianas launched a series of summer pop-up shops in unexpected locations like a New York Ferry. And, Nordstrom launched Olivia Kim pop-up shops that introduced shoppers to a novel Korean eyewear brand.

These all facilitated finds in the physical world, but there is an opportunity to bring an element of surprise discovery into the online shopping experience too. I’ve challenged myself to think about how to weave online serendipity into my strategic thinking for 2018 and beyond.  Could a retailer or brand:

1.       Allow customers who are increasingly mindful of the filter bubble effect to opt-in to random email recommendations?
Real World Inspiration: New York Times writer Steph Yin subscribes to a handful of science-themed Twitter bots to provide “serendipitous notes that take me out of my day, if only fleetingly.”

2.      Build a bot that facilitates serendipitous discoveries on an eCommerce website?
Real World Inspiration: The SF MOMA developed an app that makes contextual recommendations, guiding visitors to unexpected works of art based on their physical location within the museum.

3.       Create their own monthly subscription service, offering an assortment of unexpected products that surprise & delight?
Real World Inspiration: Bespoke Post provides men a themed box of novel products, true to the brand personality but not curated to an individual’s taste and purchase history

At the end of the day, the march to a data-driven retail landscape is inevitable, and more personalized retail offers provide benefits for retailers and their customers.

However, in a world where shopper data work against the joy of discovery, there will also be value in preserving the power of the unexpected find. In the months and years ahead, let’s plan to deliver more serendipity, shall we?