Blog Post - Hugh Fletcher, Sep 28 2016

P-Commerce: Would you allow a machine to order your next ice cream?

P-Commerce: Would you allow a machine to order your next ice cream?

For years, the world of CRM has been awash with ideas to keep customers loyal – incentives; loyalty schemes; great quality products and service.

Well, the goalposts are about to shift.

All of these ideas have been based on the decision-maker being a human. But what happens when it’s a computer, or more precisely, a computer using a customer’s data, which is making the purchase decisions? What does this mean for customer loyalty, and how should organisations prepare themselves?

THE ROLE OF MACHINES AND LOYALTY 2.0

The future of ecommerce is one where machines will act on behalf of customers – reordering and replenishing on behalf of their masters. This is “Programmatic Commerce”: a future made possible as the Internet of Things, connected devices, and a demographic comfortable with sharing its personal data, intersect.

This new ecommerce future gives customers and companies amazing opportunities to cement loyal relationships. This is the concept of “lock-in” – where temptation and opportunities to stray to competitor brands become more limited for customers, and their existing brand relationships are improved with speed and convenience.

Let’s take a real world example; it’s a rainy week in early August which preceded the nice weather.

What if our freezer knew that hot weather was on the way? What if it knew, via communication with the product (or in this case, non-communication with the product) that we were out of Magnum ice creams? What happens if a few days before the hot weather, I received an email asking me if I approved the delivery of some Magnums to my refrigerated delivery box outside my gates? And what happens if I clicked yes?

Here’s the answer: we wouldn’t be tempted to go to a local store and buy other ice cream products from other brands; we would have appreciated the insights from our freezer and Unilever (Magnum’s brand owner) and we would have been “locked in” to a relationship with Magnums.

Now, some may argue that the example of ice cream isn’t a good one – the margin’s too small, people won’t interact directly with an ice cream brand and so on. But everyone’s always sceptical of change, particularly when it will necessitate some large organisational transformations.

On the contrary, ice cream is a great example. In fact, any product which you buy on a regular basis – those that have repeat purchase patterns – are prime candidates for Programmatic Commerce. Those could be anything from ice cream, to coffee, to underwear, to moisturiser. Think about how a machine predicting your consumption, reordering for you and replenishing the product could help ensure you never had to be without.

Think about how organisations would welcome this “guaranteed” and repeated consumption – and the impact this would have on their sales and marketing strategy. And think about how this mutual benefit would minimise a customer’s need to look elsewhere for different suppliers of the same product.

BUT DO CUSTOMERS REALLY WANT AUTOMATED PURCHASING?

The answer is yes. Research of 2,000 consumers conducted by Salmon and Censuswide in July 2016 indicates that more than half (57%) of UK consumers will be ready to embrace Programmatic Commerce within 2 years, with 13% of these – that’s largely the 25-34 year old age group - ready for it today.

More than half of UK shoppers (54%) said that they would be comfortable with using Programmatic Commerce for both household supplies and food and drink.

When it comes to devices and products, the research also supports a programmatic future. 58% said that the next time they replaced a device like a fridge or a freezer, they’re likely to opt for one with smart technology.

So if Programmatic Commerce is on the horizon, then a new world of machine-led loyalty is also nearly here. This is a future of high reward for customers and organisations that are locked into mutually beneficial relationships. It is, however, a future of huge barriers and risk to those organisations that are locked out. Which organisation are you? You decide.

Read the full article

Donwload the Programmatic Commerce report