LOSING THE HUMAN TOUCH
A trends piece we wrote for Contagious Magazine.
Duane Holland, DH Ready’s founder and creative strategist, shares why loyalty hinges on raising a brand’s ‘Digital Emotional Intelligence’ through smart connected products.
Modern consumers are underwhelmed. Sixty seven percent of US millennials admit to switching away from their favourite brands in the last 12 months (YouGov & GT Nexus, 2016); consumer expectations are accelerating at a faster pace than today’s brands can satisfy them (22nd Annual Customer Loyalty Engagement Index); and despite the number of digital touchpoints increasing by 20% annually (McKinsey, 2015), engagement is lacking depth and, therefore, long-term relationships are being challenged.
In response, brands are significantly increasing investments in technology, but these seem to focus on offering speed and convenience, and consistently miss the mark. Brands are losing the human touch. Why? Because the real expectation gap isn’t functional, it’s emotional.
Digital Emotional Intelligence
Human emotions underpin all consumer actions, even our most rational, logical decisions. Therefore, in order to influence behaviour and evolve loyalty in the Connected Age, brands need to understand how digital technologies have changed the dynamic of emotions.
This was the focus of our latest report for manufacturing giant Avery Dennison and internet of things software platform EVRYTHNG. The report was written in collaboration with experts across psychology, fashion, retail, technology and policy, and it explained the role of physically-experienced emotions in a digitally-connected world, and how real-time data reveals a new dimension of brand loyalty that integrates technology with humanity. We call this ‘Digital Emotional Intelligence’ (DEQ).
As a customer experience framework, 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, behaviour, and decisions’.
Start being ‘smart’
Brands embracing the internet of things and rolling out smart product strategies have a head start in influencing human decision-making and consumer behaviour with DEQ. There are three key opportunities:
1. Greater accuracy
Digital communication plays a leading role in our daily lives, meaning the loss of non-verbal physical cues such as body language pose a major challenge, particularly as they make up 93% of emotional communications (Albert Mehrabian). Smart products offer a solution by augmenting and expanding our senses with a new range of fine-grained data inputs and indicators on what is being experienced in specific moments. This level of DEQ allows brands to understand and respond with personalised content during ‘Moments of Emotional Truth’ that drive engagement and purchase.
Furthermore, while human biases impact our memory and behaviour – meaning not everything we recall or do is reflective of our real emotions (see visual) – data stored in the cloud via sensors and tags in products and environments can decode emotional responses much more accurately.
2. Greater anticipation
The human condition isn’t static, it’s multidimensional. Therefore, with 67% of campaigns led by data used within traditional segmentation (Yesmail Interactive, 2013), CRM can quickly become diluted and obsolete due to the speed at which customer expectations change. To ensure there are no blind spots, brands need to distinguish between personality ‘traits’ accumulated over time, and psychological ‘states’ that inform everyday decision-making.
Smart products can increase a brand’s DEQ by connecting ‘categorical’ and ‘continuous’ data to accurately appraise a consumer’s state of mind in the moment in order to anticipate expectations before they’ve been set. Over time, and together with machine learning, brands won’t just be able to accurately know their customers, but also forecast emotional responses to tailored content and experiences, thus leading to increased campaign effectiveness. For example, fashion accessories brand Rebecca Minkoff leverages data from smart fitting rooms and interactive handbags to optimise the retail experience, whilst also allowing the brand to capture critical demographic and behavioural data across in-store and post-purchase moments. With the rare window into how products are being used over time, the brand can apply a “segmentation of one” strategy and make accurate predictions on what products and future collections might be most suited against the individual customer’s tastes and lifestyle.
3. Greater application
A recent Harvard Business Review study of 46,000 people found that shoppers using more than four channels spent 10% more in-store and reported 23% more repeat visits within six months. Multi-channel retail and communications clearly deliver sales, but studies also prove that more moments of connection can lead to a greater emotional reaction, too (Ambadar et al., 2005).
As physical objects and spaces become digitally connected, and turn into media channels and interactive interfaces, this increases the possibilities for emotional communication and the ability to respond in real-time. With Avery Dennison and EVRYTHNG connecting 10 billion apparel and footwear items, we’re at a tipping point where personalising at mass scale can become a key differentiator for competitive advantage. To illustrate this, the same companies collaborated with New York designers Rochambeau to launch the BRIGHT BMBR, a limited edition smart jacket with one-of-a-kind personalized experiences and rewards (see image).
Loyalty at scale
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’. This primal bonding results in a ‘brand love’ that is experienced more like a personal friendship than a commercial relationship. With the number of connected devices in use expected to reach 20.4 billion by 2020 (Gartner), brands have an opportunity to play a meaningful role in a ‘smart’ ecosystem that engages with mass audiences.
The new generation of connected technologies allows brands to not just evolve loyalty, but also scale it for a higher return on emotional investment. The race to emotional supremacy has started, and thankfully there’s not a sh*t loyalty card in sight.