Building the Next-Generation Shopping Experience

Not every connection must lead to a transaction...but...

Building the next-generation shopping experience is not a function of how much money you spend on marketing. It is driven entirely by how well you can manage your customers’ recency and frequency of engagement. Not every connection must lead to a transaction. But every moment of contact should lead your customer to want to either complete the next transaction or recommend that a friend should do so. 

Sounds easy, but let’s be honest: A “next-generation” shopping experience is – by definition – beyond reach. Consumers gravitate toward what entices them, and in doing so they leave behind a confounding trail of real-time feedback and indirect evidence of what worked. What are you supposed to do with that feedback?

What you can do is to start looking for patterns in their entire shopping behavior. The tools to do so are readily available and in one prominent case (Google Analytics) free on an entry level. Because your customers (and customers-to-be) are leaving more and more data for you to evaluate every day, you will have plenty of ways to optimize the recency and frequency of their online activity, through your owned properties and unowned spaces like social media and ratings and reviews.

Call Your Mother

Recency and frequency are two-thirds of the power trio “RFM” with “monetary value” as the “M”. RFM is defined as follows:

·      Recency – How recently did the customer purchase?

·      Frequency – How often do they purchase?

·      Monetary Value – How much do they spend?

If this seems antiseptic you can congratulate yourself for still having a soul, for this is just a measurement framework and not a commerce model. Tactics that surprise and delight, or deliver enchantment, feed into increasing any of the three metrics, but the magic of the shopping experience isn’t implicit in the framework.

To add some humanity into all this, think about your favorite relative, your spouse/partner, or your best friend: How recently have you seen or spoken with them? The foundation of most relationships is based on recency and frequency. You are compelled to connect with these loved ones as often as you can. This gives you an abiding principle for developing your own breakthrough shopping experience: It must be something that your ideal shopper will find irresistible, worthy of regular contact with your brand even if a transaction isn’t involved. Giving without the expectation of anything in return is what defines unconditional love. Unconditional love from its customers is the goal of every commercial enterprise.

Going online to search for breakthrough consumer experience case studies can – at a much lower investment rate than hiring a consultant – deliver a range of thought-provoking models for you to consider. Limiting your search to the past 18 months (for relevancy’s sake) will reveal a few obvious trends. These trends aren’t enough to build a business on, because they all represent a moment in time driven by a specific set of circumstances. But they all do point to increasing the recency and frequency of engagement with your customers. You will see the word engagement a lot because engagement in the commercial sense is the gateway drug to a relationship with your consumer.

Which is what the “R” of CRM stands for. “Relationship” is another vital part of building the next-generation consumer experience. Having a relationship with an individual means knowing them well, which is represented by interactions that are tuned to the individual’s preferences. Another word for this is personalization, which in commerce achieves an increase of recency and frequency of engagement by making the shopping experience fall somewhere close to center on the Venn diagram of Easy, Fun, and Worthwhile.

Shopping Is Digital and Physical

PSFK, the retail and consumer experience consultancy, recently highlighted two brand activations from Prada and Reebok that are worthy of your note. Aligned with the kick-off of Paris Haute Couture week, ‘Prada Mode’ immersed members of Prada’s community of brand fans in an exhibit themed around data collection and identity creation as well as featured live performances and fine dining. While this has nothing to do with clothing or commerce, it rewarded brand devotees with a unique way to “experience a particular theme or facet within contemporary creative culture, as well as connect in real life over an ephemeral, unrepeatable experience” in the words of PSFK.

Similarly, the Unlocked program by athletic apparel brand Reebok was created last year to build a community around fitness while rewarding its most loyal members. Not only do participants receive points that they can accumulate and use to unlock experiential perks, they receive credit for activity like social media posting and attending experiences, a strategy that rewards engagement and interaction above all. The program enables top-tier members to enjoy exclusive experiences like concert series and partnered events, forging connections to other elements of culture and media.

In analyzing these case studies PSFK nailed the central point: “Programs like these fundamentally change the way brands assign value to their customers, looking beyond transactions into more meaningful measures.” While our column focuses on digital activations, the fact is many brands and retailers are balancing their efforts between their online and offline presences. According a recent Google / Ipsos study, 47% of total global purchases are completed online. Depending on whether you see this as “a whopping 47%” or “only 47%”, it does reveal the balance that consumers maintain in their shopping lives.

This balancing of efforts puts brands and retailers in the unanticipated position of being networks for activity and socialization. Remember the earlier cheeky comment about the notion of ‘community’ making a comeback? It’s not happening anywhere else except in retail. In a world where all major retailers and marketplaces are competing for the “everything, anytime, delivered tomorrow” prize, brands can still differentiate themselves by delivering experiences that keep customers close to the brand and compel them to share their new allegiances widely.

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Blockchain’s Natural Place in E-commerce

The way to build confidence with consumers is not through hackable technologies or middlemen. It’s transparency.

For centuries we, as buyers, sellers, loaners, borrowers, voters, and citizens have been trained to place our trust in centralized authorities, which serve as the foundation upon which various types of transactions can occur.

Keep in mind the notions of “trust” and “central authority” as we chase this topic. Because we’re going to dive into the proper role of blockchain in e-commerce. Blockchain takes these two cornerstones of commerce and turns them on their respective heads, replacing the presumptive need for “trust” with cryptographic, indelible proof.

Click here for more on this re-run of this post