How Personal Utility is the Future of Retail

by Natalie Tatum | Mar 12, 2020 12:00:00 AM

With speakers from Walmart, Starbucks, Nordstrom and more, NRF 2020 showcased many different thoughts and ideas about what the retail landscape holds for 2020 and beyond. With the rise of micro-experiences and attempts to redefine customer service to foster more intimate relationships between companies and their consumers,  many industry professionals are citing personal utility as the driving factor behind retail’s growth. 

Researchers from PSFK in New York produce their annual Future of Retail report to provide strategic roadmaps for brands and retailers to deliver hyper-personalized service that meets the unique needs of every shopper in a post-experiential era. In the session ‘Humans are back: Why companies are putting a premium on the human element in the digital age,’ with PSFK President and Founder Piers Fawkes, Fawkes dives deep into the ways that any industry can harness feedback and machine learning to meet and anticipate their shoppers needs. 

Personal Utility:

Personal utility is the advanced computing, delivery logistics, and connected tech powering a hyper-personalized retail experience with the objective of anticipating and providing exceptional service. Retailers deliver personal utility through five categories: Inspire Me, Meet Me, Serve Me, Value Me, and Know Me. Each category Fawkes highlights here is broken down into detailed examples of those already doing it well and additional research and statistics that are pertinent for each delivery. Let’s take a closer look at the five personal utility categories:

Inspire Me: provide me with personalized recommendations and curated content to help me discover and choose the right products for my needs. 

We all know how difficult it can be to articulate your desires to an untrained or uninterested sales associate who might not know anything more on what you’re looking for than you do. L’Oréal solves this problem through Color & Co., a service that provides digital one-on-one consultation calls that help consumers pick out the best L’Oréal product for their specific need at the recommendation of L’Oréal experts and professionals. By providing expert care and advice, consumers are left feeling that their desires were heard, validated, and resolved beyond expectation. 

Meet Me: integrate shopping into my daily life, providing me with access to the goods and services I need in the manner that’s most convenient for me.

It’s no surprise that online shopping has taken over the retail marketplace. Malls and department stores around the world are closing at rapid rates due to an overwhelming number of consumers choosing to shop online versus in store. How can retailers expect customers to want to walk through their doors when they could just as easily shop at the click of a button? Insert Nordstrom Local. 

Nordstrom Local is the convenient service hub for online order pickup and returns, express alterations and style guidance, all with the same passion for customer service that Nordstrom is known globally for at the fraction of the store size. About the same square footage as your local Starbucks, Nordstrom Local provides shoppers an opportunity to interact with the brand in a convenient, efficient way that entirely exists to serve their immediate needs. Nordstrom says its customers in Nordstrom Local stores are returning goods faster and spending more money, giving the retailer a better chance of reselling returned products and continuing to leave their assisting reputation on customers in a fresh, new way. 

Serve Me: don’t just sell me a product, but provide me with a solution, making my life easier and ensuring I get the most out of my purchase. 

Buying a tool for a hobby or activity is more than just purchasing the item… you have to know how to use it. Think of all of the things you can order for your hobby and then think of how useless they would be without proper knowledge: a set of kettlebells (half of which you can’t even lift yet) for your desire to work out more, an embroidery loop for a first-time needlepointer up to their ears in floss, or a specialty tool set to fix that pesky leak under the sink. What good are these items if consumers don’t know how to maximize their usage? 

Equal Parts, a cookware company, offers their customers 8 weeks worth of free access to a cooking coach with the purchase of any Equal Parts cookware kit to help them develop skills and confidence in the kitchen. By giving them an opportunity to learn and grow around their purchase, consumers are able to maximize their dollars spent, often connecting the positive learning experience with the retail sale. 

Value Me: provide meaningful value that rewards my loyalty and shows me you’re there for the long-haul. 

Shopping somewhere where the associate knows and remembers you creates hundreds of opportunities for your connection to the store to both grow and strengthen. Think of the last time you got your favorite waiter at that one great restaurant you always go to – isn’t it nice how they always remember what you and your spouse want to drink and serve it to you before you even have a chance to ask?

Fashion retailer Ruti has introduced a series of cameras in their stores that scan and take photos of customer’s faces. The photos are then stored in the brand’s CRM along with information on their shopping habits and style purchases. While this may come off as an invasion of personal space and privacy to some, Rumi is treating their customers with the respect and assistance of a lifelong friend, analyzing every interaction to ensure that each one that follows will provide an even better shopping experience than the one before. 

Know Me: empower me with digital tools that allow me to control my shopping experience while continually working to make my experience even better. 

Fashion brands especially seem to find themselves racing neck and neck to produce the trendiest new items for the season – which can sometimes amount to even just a single week for a product’s 15 minutes of fame. When companies overproduce and don’t prioritize learning from data to predict new trends, they’re left with financial loss and an unimaginable amount of stock (we’re looking at you, fidget spinners.) 

Fashion brand Choosy uses data to uncover trends on social media then quickly designs its own products on the most popular styles and produces them on demand. While some consumers see this as a classic case of fast fashion, brands like Choosy and Forever 21 know their consumers are just looking for an inexpensive outfit that will look great in an Instagram picture. It’s not that Choosy doesn’t put the time and effort into r&d for new products, it’s that they simply know their customer, their needs, and how fast their taste can change – and how to change with them. 

Personal Utility in Grocery:

Now that we know how to maximize personal utility, how can we translate what we’ve learned to represent the grocery industry? Let’s take a closer look at the numbers behind the PSFK report:

  • 85% of surveyed individuals find a personalized experience where retailers automatically suggest, order, or recommend products that best suit personal preference appealing 
  • More than 90% of consumers are increasingly open to whatever products can get to their door the fastest
  • 64% of consumers say that it is very important or somewhat important than the brand provide educational or informational content that helps them get the most out of their purchase
  • 80% of consumers are more likely to do business with a company that offers them personalized experiences 
  • 79% of customers are willing to share relevant information about themselves in exchange for contextualized interactions in which they are immediately known and understood

Grocery retailers looking to maximize their apps and digital reward system can maximize on the notion of 85% of individuals wanting retailers to automatically suggest, order, or recommend products that best suit their personal preferences. Consider how you can use your rewards app to suggest new products to customers that may fit the lifestyle the data shows that they’re living. Whether you have the opportunity to suggest healthier products, alternatives to products they only bought once or didn’t like, or similar products to ones they’ve purchased in the past, retailers are strengthening their relationship with the consumer by being a trusted adversary in the grocery buying process. 

Grocers looking to invest more in their store-to-door delivery programs should take note of the 90% of shoppers who are willing to shop at the retailer that can get their groceries to them the fastest. Investing more time and resources into staffing applicable individuals and ensuring they have the tools to accurately shop and deliver the items on the consumer’s grocery list in a competitively timely manner will surely lead to an increase in brand loyalty. 

Grocers looking to foster a closer relationship with their consumers could invest in helpful in-store signage, newsletters to be put in grocery bags, or informational pamphlets that provide helpful information on recipes, community incentives, and external resources in order to provide a more well-rounded experience for the consumer. With 64% of shoppers wanting to learn more about what they’re already buying, there’s no better time than now to go the extra mile. 

For grocers looking to enchant the 80% of shoppers wanting a more personalized experience, grocers should hyper-personalize their in-store micro-experiences. If the data shows that consumers are worried about the grocery store being a stressful environment, consider incorporating a shop-and-sip program, live music, or childcare services to re-define the atmosphere of the store. 

Even though data privacy is a growing tech concern, never be too afraid to try to get to know your customers better. With 79% of shoppers willing to share valuable personal information on their shopping habits in order to have a more fulfilling experience, grocers should jump at the chance to invest in the newest data to track their customers habits and emotions. 

Maximizing personal utility doesn’t have to be a chore. By inspiring, meeting, serving, knowing, and valuing your consumers, retailers of all industries can be equipped to strengthen their consumer interactions across all categories.

More information on the PSFK Future of Retail 2020 report can be found here. 

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