MarTech Interview with Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce
Could you tell us about your role and the team/technology you handle at your company?
When it comes to the future of commerce, many organizations are just not thinking far enough ahead – they are too ‘heads-down’ thinking about this week’s, this month’s or maybe this year’s figures. But while they are ‘heads-down’, some major players in the market are very much ‘heads up’ – and are defining customer experiences and expectations.
My role is to connect the dots of all the technological and business advances in the commerce market, to package and summarize these for our clients, and to provide them with actionable ways to fight back and ensure that they remain relevant in the future.
The work that my team does spans across research, insights, innovation, technology, and strategy. At first sight, many people argue that this information and knowledge should be something that organizations themselves should possess. But the frenetic pace of business and the unrelenting pressure of delivering results make taking time out to see the larger picture very hard to come by.
We don’t judge our clients for not knowing what the future holds, we just help them to shortcut the process to get to the strategic decisions that they need to make to keep themselves relevant.
B2B marketers are taking lessons from B2C/Retail Marketing teams. What specific advice do you for B2B Marketing teams when it comes to leveraging technologies?
To deliver the right message to the right person, segmentation is vital. But segmentation in B2B must happen on a number of axes – including business level, role level, and personal level. In many ways, B2B marketers must be more knowledgeable about their customers as they must target them as workers, decision-makers, and consumers. They must be appealed to both rationally and emotionally. Using buying personas is often a helpful first step to segmenting B2B customers, and working out which products, service, and messages are right for them.
Use Social Media
Traditionally the preserve of B2C, B2B marketers must also harness the benefits of social media. For businesses, one of the most obvious social tools is LinkedIn, allowing for hyper-targeted advertising. But other social media platforms can work too – after all, B2B customers are consumers too, and massively influenced by their experiences online, most notably Amazon. And if we’re focusing on them as individuals, and appealing to their emotion, then social media can be a useful way of presenting a less corporate view of the company.
Automation Is Not King or Queen!
Particularly when it comes to CRM, there is much talk about automation. This is helpful when the volume of data is very high. But if the focus is too much on the automation itself, then the real value can be missed. And the real value of automation is the information that automation can provide and the decisions taken as a consequence.
According to you and your interactions with tech leaders, which 5 technologies would transform the retail space by 2025?
Increasingly, we see more commerce being conducted through Voice. Our research indicates that at present, 7% of all online sales are conducted using Voice, 15% of consumers are likely to start using Voice in the next 12 months, and 40% intend to purchase using Voice in the next 2 years.
At present, the Voice market is being controlled by some of the large tech innovators who have realized that controlling the Voice interface lies in providing both the hardware and the software. It is no surprise that Amazon, Google, Alibaba, and Apple are leading this charge.
But what about all the other retailers and brands? What is their Voice strategy, if they even have one? What are their Zero UI corporate identity guidelines?
One important factor to mention when talking about Zero UI and Voice is that as a new interface and sales channel it can seem daunting. After all, haven’t we only just got to grips with being ‘mobile-first’? However, I would argue that understanding and testing voice can be quick and easy. Creating simple proof of concepts can prove voice’s value (or not) to businesses, and enable easier operationalization.
Omnichannel and Data
Many questions that we get asked involve the health and the survival of the high street. Sentiment amongst commerce leaders is not all that positive when it comes to physical shopping. Why then are the likes of Amazon and Alibaba investing in physical stores?
The answer is that they have realized that customers do not want to exclusively shop through one channel, but want the freedom to seamlessly transition between digital and physical.
Our research tells us that when it comes to Gen Z (16-24-year-olds) 53% would prefer to shop with a retailer that has physical stores. And when it comes to Generation Alpha (6-16-year-olds) 74% like seeing the same thing online as in-store, and 75% like the experience of physical shopping.
But physical shopping can only survive if it re-invents itself as an experience worth having. 52% of Gen Z said they expected digital store experiences to be innovative, while 27% of Gen Alpha said that they wanted physical shops to have areas where they could interact with toys and gadgets.
Seeing how Amazon and Alibaba have approached physical retailing, and watching how the likes of Walmart have responded, shows how using data to define cross-channel experiences will be vital to successful organizations in the future, who will all be operating Omnichannel operations.
With 49% of Generation Z getting their inspiration from social media, and 55% of Generation Alpha claiming that they are likely to buy a product or service if their favorite YouTube or Instagram star is wearing or recommending it, social media clearly has a large audience in the initial stages of the purchase journeys.
Customers across the board want range, ease, speed, and convenience. And getting inspiration through social, then leaving the platforms to search and buy, certainly is not convenient. That’s why social commerce will become huge in the future.
Delivery and Digitalization
One of the key battlegrounds in the future of commerce is delivery. Customers on average are happy to wait just 2.9 days for their deliveries to arrive. But for the younger generations, expectations are even quicker – with 16-24-year-olds wanting delivery in 2.6 days and 6-16-year-olds in just 1.9 days. In fact, 20% of 6-16-year-olds claim that they would never shop with an online retailer who cannot deliver the next day.
With such high demands, organizations need to think slightly differently. For instance, while it might be hard to deliver a physical product within 24 hours, it’s a piece of cake if that product is digital and downloadable – and it’s this convenience that the future generations are after; because 55% of 6-16-year-olds would rather buy or download something digital rather than something physical.
Although we may not notice it, we are edging towards our online ordering becoming more automated. At present, 13% of online customers have active subscriptions. Much has been made of the subscription economy, but the challenge is that it relies on the “intelligence” of the human to decide on the order intervals. Enter Programmatic Commerce – the phenomenon of computers and AI making purchase decisions on behalf of consenting consumers based on pre-programmed settings and data.
Sounds like pie in the sky? In our Future Shopper study, we asked customers if they’d be interested and 18% said they planned to be using this form of automated ordering within 12 months.
What are your predictions on the future of retail and e-commerce Marketing? How do you prepare yourself for the disruptions resulting from AI and chatbot messaging?
This is a question in two parts, so let’s start looking at my predictions for the future of retail and e-commerce
The future is certainly looking like one where the big marketplaces will rule the roost. Our data indicates that this is actually something that customers want, with 62% saying that they are excited by the idea of buying all their products through one retailer.
But will it just be one retailer? While in the West there is heavy dominance from Amazon, in East, Alibaba is the major player. Each of these organizations has its skillsets and infrastructural specialties. But who will win? The e-commerce war will define the commerce experience for customers in the future.
And with most of these organizations understanding that customers are not loyal to them as ‘brands’, but loyal to the services they provide, we will enter into an era of better, faster services for customers.
While the marketplaces will continue to hoover up customers by offering range, ease, speed, and convenience, direct-to-consumer (D2C) brands and organizations can continue to exist if they focus on WACD (What Amazon Can’t Do).
With 74% of 16-24-year-olds claiming that Amazon is not the best experience for brands, and 43% going to brand’s sites for inspiration, D2C brands should focus on offering added value to their customers to help them convert. Some areas to investigate might include specialism and curation, having a purpose or strong values, creating a community, and so on.
Ethics and Morals
One message coming out loud and clear from the next generation of shoppers is the concept of ethics and morals. 18% of 6-16-year-olds said that they would prefer to shop for sustainable products, while 66% said they wanted to buy from companies doing good in the world.
The polarization of the high street
As we’ve said before, physical retailing is not dead. But most consumers are craving experiences, and if high street stores fail to provide an attractive experience or don’t play a vital role in their organizations’ Omnichannel ambitions, then their chances of survival will be slim. The effect that this will have on the high street is that, on the one hand, we will have highly experiential shops such as Apple stores rubbing shoulders with the down-and-dirty betting shops. It is the middle of the road retailers that need to be asking themselves what their role is on the high street.
The next question, how do you prepare yourself for the disruptions from AI and chatbots?
The first point to make here is that we don’t perceive AI and chatbots to be particularly disruptive. On the contrary, for those organizations that can effectively embrace these two technologies the solutions that they provide are actually conducive to smoother and better customer experiences.
Conversational commerce is when brands use messaging apps like WhatsApp and WeChat, or Voice assistants like Alexa and Google Home, to communicate directly with customers. Companies have been using it for a while now. However, the next step is integrating payment methods into the experience. For example, Apple has partnered with Burberry, Four Seasons, Hilton and Marriott to test their conversational commerce function, Business Chat.
For this year’s Black Friday shoppers should expect to see conversational commerce and bots offering exclusive offers. Last year, for example, Amazon had exclusive offers available only on Alexa. These offers were created to drive the adoption of using Alexa to make purchases, with voice being extremely conducive to impulse purchases.
Overall, conversational commerce is still in the early stages of adoption and I expect to see companies test the concept further during this year’s Black Friday. Don’t forget conversational commerce has been used in China for years, where consumers can buy almost anything directly via WeChat; the west is still catching up.
Conversational commerce is going to be one of the more personal ways that brands can connect with customers. It will also require a change of mind-set as customers will be able to buy products without even visiting a brand’s website.
How do you see Mobile Commerce Technology evolving with the maturity of Customer data platforms and personalization techniques?
The mobile phone is at the centre of the personalized experience. It is with you all the time and with every day that passes its functionality increases. For example, only a couple of years ago if you forgot your wallet at home you would have to go back for it. Now you can quite happily pay for transport and your lunch with your phone. This also means that with every day the opportunity for personalization grows as our devices capture more and more data about us. The problem with all this data is making sure that we use it in a meaningful way. This will force all companies to become a data processing company. Then, in a world where privacy is becoming a key word companies have will to earn customers trust first and foremost.
What we are going to start to see in the future is a move away from mobile as other technologies start to take over some of the responsibilities of traditional mobile, again you can see this happen with devices like the Apple Watch and other wearables. We also have to think beyond traditional ‘mobile’ as other technologies like biometrics and programmatic commerce become commonplace.
Amazon recently announced $70b Q3 revenue. What kind of retail landscape do you foresee in the coming years?
Some of the changes in the retail landscape have been discussed in previous questions, so in this answer, I’ll look at how Amazon will act and change the retail landscape in the coming years. Undoubtedly, Amazon is excellently placed to cement its position as a major player in the retail landscape. It will do this in several ways:
Focus on Prime: Prime is Amazon’s best market penetration tool. In the UK, Prime penetration sits at 49% while in the States it’s 68%. And 46% of 6-16-year-olds claim to have access to a Prime account. Our stats also indicate that not only does Prime improve customers perceptions of Amazon, but also encourages them to spend more. Increasing the number of Prime customers through key retail peaks, purchasing of TV rights, and quicker delivery will encourage more people to sign up and spend with Amazon.
Owning the interface: As mentioned before, Amazon now owns the majority of product searches online, pushing Google into second place. It has also really pushed into the voice market. In fact, 51% of 6-16 year olds claim to enjoy speaking to Alexa. Its move into content production and purchase of sports rights shows how it wants to own the streaming and downloading space too. Even more intriguing is the move of its sister brand – Blue Origin – into space. Could it be that Jeff Bezos is trying to own the space interface too? But the real point that I’m making is that for many organisations to be successful in the future of commerce, there will be a heavy reliance on Amazon and its infrastructure.
Not WACD but WADNDRNBPWITF: While there are some areas of e-commerce that Amazon does not do, this allows organizations to take advantage of WACD (What Amazon Can’t Do). Take ethical behavior for instance. While this is not something that Amazon is famed for, Jeff Bezos recently signed up to make Amazon carbon neutral by 2040. In other words, it’s less WACD and more WADNDRNBPWITF – what Amazon does not do right now but probably will in the future!
Do consumers actually feel the pinch of constant brand messaging and communication over mobile — what is the best way brands can mellow these down without losing their messaging ideas?
This may sound too simplistic, but it’s the blunt nature that brands use data that frustrates customers. In other words, the data, and the way that it is used needs to be more intelligent. Targeted ads need to go one step beyond what a customer searched for and what they left in their basket, to considering them as people, who they are shopping for, and what they actually purchased. More often than not, customers are open to Marketing when it benefits them – either through a deal, or a note on declining stock…
Another avenue to use is referrals and influencing. This way, consumers receive Marketing messages from people that they want to hear from. Our research indicated that for consumers aged 6-16, 28% said that friends were their biggest influence, while online influencers themselves accounted for 24%. Utilizing the right influencers, and encouraging sharing of messaging between friends can, therefore, be a fertile way of communicating in a less invasive, more personalized way.
Tag a retail brand that you find perched at the top of tech adoption and customer engagement?
It’s boring to say, but for me, it’s Amazon – an example of an organization that innovates, that thinks horizontally about the products it can offer, that gives its customers value through its Prime program, and which is dedicated to better service. As mentioned before, when 72% of customers say they wish that all retailers offered the same services like Amazon, that really tells its own story.
Thank you, Hugh! That was fun and hope to see you back on MarTech Series soon.
Hugh is a Senior Marketing and e-commerce expert with over 15 years of Client and agency-side experience at both strategic and operational levels. He is responsible for marketing, most notably lead generation for Wunderman Thompson Commerce through the usage of multi-channel awareness and marketing activities.
He has proven track record of delivering business, revenue and profit growth in both B2B and B2C environments on both Client and agency sides.
Specialities: eCommerce, strategic business consultancy, online brands, digital marketing, owned digital platforms, multi-channel commerce and marketing strategies, management of multicultural and multi-functional teams, applied innovation, speaking.
The MTS Martech Interview Series is a fun Q&A style chat which we really enjoy doing with martech leaders. With inspiration from Lifehacker’s How I work interviews, the MarTech Series Interviews follows a two part format On Marketing Technology, and This Is How I Work. The format was chosen because when we decided to start an interview series with the biggest and brightest minds in martech – we wanted to get insight into two areas … one – their ideas on Marketing tech and two – insights into the Philosophy and methods that make these leaders tick.