Welcome to the Age of the Customer – an era at the epicentre of a "perfect storm" created by multiple intersecting revolutions, and one that demands a more advanced approach to understanding your buyers in a constantly evolving and fast-changing 21st century retail landscape.
Weathering the storm will not be easy. While many companies are adopting the digital skills and tools to stay afloat and keep their eye on the horizon, the ones who find land will be those who can wield big data, understand and execute on artificial intelligence (AI) to enhance the customer experience, and turn it to their advantage to keep pace with changing customers.
Recent years have brought substantial changes. From geopolitical milestones to the fourth industrial revolution (i4.0), and disruptive technologies to radical business models, these changes have forever altered customer behaviours.
But this is just the warm-up act.
Today, we are witnessing the convergence of three major revolutions that are altering the way people live, work and play, including:
These revolutions are not only disrupting and redefining how we live and do business, they are also placing a renewed focus on using technologies to gain a granular understanding of these trends and how they are swaying all demographics, not only in Canada but across the globe.
Canadian CEOs are getting wise to this demand—at least, for the most part. According to KPMG's 2018 Canadian CEO Outlook, a majority of Canadian business executive (96 percent) say they are confident in their ability to manage technological transformation (compared to 71 percent of global CEOs), and an equally high majority (96 percent) claim to be very aggressive when it comes to being a disruptive force in their respective markets.
That is all well and good, but when it comes to putting words to practice, less than a quarter of Canadian CEOs surveyed in this annual exercise say they are planning to increase their usage of predictive models or other analytics. Indeed, this is an important disconnect to highlight as the use of data analytics and AI is no doubt key to understanding today's trends and how they are impacting customers – especially in regards to the fastest growing demographic of our times: the Millennials.
Never before has there been a greater need to know your customer. Yet while 90 percent of Canadian executives surveyed in the aforementioned CEO Outlook say they are confident that investments in personalization are paying off, over half are still having trouble adapting sales and distribution channels to meet ever-evolving needs of Millennials.
Clearly, there is much ground to cover, and it begins with obtaining a more fulsome understanding of how Millennials live, work, buy and evolve. A failure to do so would be an egregious gap in an overall effort to know your customer in an age of ultra-personalization.
To be sure, it would take more than one article to profile this demographic. In essence, however, Millennials' day-to-day experience with self-serve apps and tailored shopping experiences are giving rise to new—and often hard to meet—expectations. When it comes to service, they want the same simplicity, control and customized experience that they enjoy with their favourite apps, and they expect the ability to connect to new experiences and a world of options whenever and wherever they are.
Having said that, it is also vital that we understand Boomers, Gen X and how life events are shifting.
We need to be forward-looking, for one. There is value in extrapolating assumptions and strategies based on the past, but as we know, what happened in the past is not always a perfect predictor of the future. After all, the future is not linear.
We also need to be smarter about how we use data to analyze and predict customer habits – be they Millennials, Gen X'ers, Boomers or (soon enough) the so-called iGens. Fortunately, thanks to continued advances in data analytics, companies now have the ability to perform better customer segmentations and drill down into the habits, attitudes and potential actions of both current buyers and potential customers.
In short, we need to use data to understand what makes our customers tick. In KPMG International's Me, My life, My Wallet report, we breakdown the factors that shape today's multi-dimension customers, including:
Understand these factors will help us better understand Millennials and their peers. That understanding, however, begins with articulating one's business objectives, defining your targets and using the new digital tools and capabilities at our disposal to stay current with the changing customer.
2.5B: Amount of Millennials globally
90M: Millennials in North America, accounting for 25% of both US and Canada's population
$3.3T: Spending power of the Millennial Generation
$30T: Money Millennials stand to inherit from their parents
84%: Percentage of Millennials who do not trust traditional advertising
78%: Percentage of Millennials who prefer to spend on experience over assets