World Economic Forum: 3 Ways Companies Should Think Differently About Their Products

Keeping up with the changing needs and expectations of customers is on every retailer’s agenda as they invest for the future. But the more we talked to our customers, the clearer it became that their whole end-to-end experience, at every touch point, is critical. It’s not just the service provided by the retailer that counts.

Retailers must realize that not only their customer experience teams but every unit in their organization, impacts on the customer’s experience. Traditional operating models must innovate to reflect this. The following three levers will be critical to the successful models of the future.

1. Consider personas rather than customers

Companies need to build their operating structures based on the needs of personas. The traditional practice of segmenting customers shopping behaviour and product preferences is no longer an effective differentiator for retailers.

For example, all moms may buy the same products for their homes, kids and babies. But the routines of a stay-at-home mom and working mom are very different. For working moms, convenience, limited time concerns and choosing the best products are important factors when purchasing, our research shows. But for stay-at-home moms, getting the right deal for the best products is key.

Alternative delivery options such as click and collect, lockers or delivery before and after work hours are differentiators for working moms. Such services do not play a major role for stay-at-home moms. While working moms have more time to spend on social media after 9pm, others use social media earlier in the day.

To attract and retain these customers, retailers should design not only special marketing strategies but also different service models. Instead of working in silos, companies should be designing teams that can understand different personas and build product selection, sales, marketing and services according to the needs of these customer groups. These teams would involve a wide range of capabilities and skills operating together.

2. The product team is key

A company’s agility and ability to adapt is the second critical lever to success. The future is still a mystery to us, and we don’t know what disruption lies ahead. The retailers who win will be those who keep up.

The chief product officer and their team are a key function. They must take a very product-centric stance approach to their duties, and stay hyper-focused on customer needs. This team should decide how the company’s product evolves over time and ensure continuous innovation.

Product roles involve an insatiable drive for improvement, both with a micro and macro focus. They should make the core product better over time, steadily and noticeably. Observing trends and disruptive models across all sectors and regions is key so that they can stimulate change ahead of the curve.

These teams should be cross-functional, based on either a customer problem that needs to be resolved or dedicated to innovation. They should also foster internal entrepreneurship. If a positive culture of product development can be promoted, teams work better towards the same goal, in our experience. This can hugely improve the customer’s experience.

3. Managing your company is not enough. You need to manage your ecosystem too

Every retailer operates in an ecosystem, involving suppliers, manufacturers, merchants, technology partners and the extended workforce. We believe these ecosystems will continue to expand. Therefore, beyond providing the best experience for customers, companies should improve processes and structures for others in their ecosystem.

Companies which excel at this will gain a competitive edge by becoming the priority for their suppliers and manufacturers. They will also have more access to extended talent.

If companies take these three approaches to transforming their business culture, using new operating models and different perspectives, we believe they will be successful. They will win the hearts and loyalty of their customers, suppliers, partners and workforce.

This article was originally published on www.weforum.org, viewed 6 Dec, 2017