Using the advantages of technology to connect better with your customers
As our physical world grows more digitized and connected, technology seems to have become largely about efficiency and utility. In digital marketing, for instance, programmatic, direct response and performance marketing are currently the dominant models. Who we reach and how many seems to have become more important than the content or experience we reach them with. Yet, as the latest neuroscience tells us, engagement with brands and products, like most things in life, is a fundamentally emotional rather than rational process.
Somewhere along the way, brands lost sight of the importance of empathetic connections with human beings. Paradoxically, this is happening right at the time when technology has an extraordinary ability to amplify and respond to emotions. Using Internet of Things and smart product technologies – from mobile devices and sensors to real-time cloud applications – physical and digital interactions can now be merged into a unified set of connected brand experiences.
We know that emotions inform almost every human decision—driving our behaviors, underpinning relationships, and leading to loyalty. As digital technology becomes increasingly ubiquitous, it is changing the dynamic of our emotions and our connection to brands.
Building on our partnership in #BornDigital™ apparel and footwear, EVRYTHNG and Avery Dennison have released a report that seeks to understand this change. It explains the role of physically-experienced emotions in a digitally-connected world and how data reveals a new dimension of brand experience that integrates technology with humanity. We call this “Digital Emotional Intelligence.”
Digital Emotion and the Hedonic Shopper
The context in which we interact with each other and the world around us has become increasingly and pervasively augmented by technology. It’s not just the tools we use to socialize, work, play, learn, consume, transact and experience the world around, that have changed — but also how we understand, perceive, manage, and communicate emotions digitally.
We define Digital Emotions as “human emotions that, while still experienced in the body, are primarily influenced, augmented, composed, or expressed through digital technology.” This could be a digital interface like smartphones or data collected from sensors in the objects and environment around us.
Due to the speed and virality of internet communications, and because online social networks are larger and broader, Digital Emotions are more contagious than their physical counterparts. Updating your Facebook status or posting on Instagram, for instance, can trigger an emotional response with someone thousands of miles away.
When it comes to applying digital emotion in retail and creating experiences that encourage people to buy more, some consumers are more susceptible than others. One academic study identified two different types of shoppers: “Utilitarian Shoppers,” who are more concerned with convenience and transactions, and “Hedonic Shoppers,” who prefer to shop for fun, enjoyment, stimulation, and affective gratification. Targeting consumers who shop with their heart more than their head (combined with the impossibility of competing head-on with the pure efficiency of e-commerce) are why retailers like Lululemon, Lush Cometics and Nike create distinctive and memorable shopping experiences from yoga classes and in-store spas to full size basketball courts. Research shows that these kind of hedonic shopping experiences, particularly ones that are digitally enhanced, are strong predictors of positive word-of-mouth and anticipation of a return visit to those retailers.
Digital Emotional Intelligence
Digital Emotional Intelligence (DEQ) is a framework to apply our understanding of Digital Emotion. DEQ can be defined as “the ability to digitally sense emotional response—our own or other people’s—and to use this affective information to guide thinking, behavior, and decisions.” It’s a framework for brands to understand, anticipate and respond to human emotion across physical and digital channels and use data intelligence from connected products, people and places to create deeper, more emotional connections with their customers. As Dr. Philip Powell says, “DEQ gives brands the ability to understand the interpersonal dynamics in the connected space by using data intelligence to create empathy.”
In other words, DEQ means harnessing the flood of contextual, real-time data from smart products, connected devices, digital interfaces, and Internet of Things sensors to drive more effective personalization at scale.
Brands can identify the most effective touch points to capture and generate contextual, real-time data throughout the customers shopping journey and post-purchase – for example, IoT smart products, connected devices, digital interfaces, and sensors. They can use real-time decision making to interact with consumers in a more personalized, emotional way ‘in the moment’, and then apply machine learning algorithms to extract more valuable insights over time to better engage consumers, increase conversions and sales, and drive loyalty.
There are three key ways brands can apply DEQ:
- Accuracy: Through physical products, environments, and social relationships, brands can digitally process human emotion, design more effective physical-digital consumer journeys, and more effectively guide and influence consumer choices. Smart and digital products can augment our senses by delivering a new range of data inputs on what is being experienced in specific moments, thereby revealing and predicting emotional response. This allows content experiences to be far more targeted and relevant, and communication more personal and perfectly timed, which lets brands get closer to customers.
- Anticipation: Using data, brands can understand the consumer’s state of mind in a particular moment, anticipate expectations before they’ve been set, and respond in real-time. By combining emotional personality profiles with dynamic decision-making and content delivery, brands can digitally create empathy with consumers. As an example, an appliance could detect consumer frustration when the same button is pushed multiple times and trigger a customer service chat session. Or say apparel products allows consumers to unlock curated musical playlists by scanning them at point of sale and post-purchase – analyzing the real-time streaming playlist preferences would reveal information about how a person feels in that moment and allow retailers to test which product content or incentives work best.
- Application: The more physical objects and environments become digitally connected, the more contexts brands can engage consumers in—and the more opportunities to convert points of emotional connection into sales. Smart products play a crucial role in multi-channel marketing. As omnichannel paths to purchase become more evolved and connected, the one constant that brand brands can truly control is the product. A smart product can adapt its role and service to the context of use and create a cohesive, individualized experience throughout the shopping journey.
Return on Emotional Investment
Brands that leverage DEQ have a powerful competitive advantage. Research shows that fulfilling emotional needs drives customer engagement, conversion, and loyalty. For instance, our work with smart products has revealed that consumers scanning smart products spend 23 percent longer on a brand’s site. There is a more than 50 percent sales growth for retailers who base a customer experience strategy on emotional connection, and consumers interacting with smart products generate 39 percent more likes and shares.
Critically, smart products make personalization at scale a reality. In terms of Digital Emotion, a more digitally personalized experience is by definition a more empathetic one; I get something more appropriate, relevant and timely because the brand knows me. This results in more meaningful consumer attention, more effective brand recognition/recall, and a stronger impact on consumer behaviors—leading to greater engagement and sales. With increased consumer demand for customized products and experiences, personalized engagement is a key brand differentiator in the market. Data from smart product interactions and connected devices and environments can help power this new personalization imperative, driving behavior and influencing future purchases.
As traditional brands risk being overtaken by digitally native players, there’s now a chance to regain competitive advantage by digitizing their physical assets to unlock new sources of data to improve their knowledge of—and relationship with—their customers. In today’s increasingly competitive, always-on world, the brands that use digital technology to connect more emotionally, personally, and contextually with consumers will win.
Andy Hobsbawm is co-founder and CMO of EVRYTHNG