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Whether in the metaverse, shoppable social, or cryptocurrencies, brands race to determine which trend best aligns with both their tech capabilities and customer value proposition.
During the rush, it’s easy to misjudge how a particular trend may or may not resonate with your audience. Earlier this year Hostess unexpectedly announced the launch of “$TWINKcoin“A crypto-inspired, coin-shaped version of his classic Twinkie snack cake.
Not only did Hostess receive backlash from the LGBTQ+ community for its negligent use of the offensive term, but it also seriously confused its customers. The connection between the baked goods conglomerate and the cryptocurrency world was not clear in their announcement.
That said, Hostess’s desire to insert herself into the oft-headline-grabbing crypto conversation was understandable. Several consumer brands such as Nike, Sotheby’s and Coca Cola took the same leap in 2021, recording weeks and months of success and positive headlines. But several months after its launch, no one outside of Hostess understands the point of the brand’s foray into crypto — but we do remember it being a flop.
Preventing an innovation blunder
Interest in commercial trends such as the above is still growing. Metaverse related companies raised even more than $10 billion nearly doubling the amount raised last year in 2020. And that trend isn’t slowing down – the market size for the metaverse is expected to grow nearly $700 billion by 2030.
However, as it turns out, choosing these trends is not easy if there is no clear connection to your brand and your business model. In the Hostess example, disregarding the offensive nature of the campaign, the company’s product value, customers, and this new foray were still misaligned.
On the other end of the spectrum, Sephora found success applying modern commerce innovations as part of its omnichannel experiences. The beauty retailer used technology that allows their customers to make purchases, interact with live representatives, and access exclusive discounts, all through the mobile app.
Sephora customers benefit from this in both the stores and the app augmented reality (AR) virtual try-ons and Color IQ technology to find the right foundation shade for their skin tone. Sephora uses data generated through both in-person and virtual interactions to provide customers with personalized communications, recommendations, and experiences. This is technology trend adoption done right: Sephora prioritized its customers’ behaviors and pursued experiences that complemented its business model.
To achieve comparable results, organizations need to analyze whether a new innovation aligns with brand identity and customer behavior. In addition, it is important to build a corporate culture that prioritizes continuous experimentation. For example, Sephora launched a innovation lab in 2015 to test in-store experiences before broad roll-out, reducing operational costs and getting real feedback.
Prioritize brand authenticity and customer relevance
Trending commerce innovations often seem impressive, especially from a distance. But it’s critical to identify a clear business case before allocating resources.
Start by determining how a new innovation will drive sales and strengthen your brand values and image. Just as important, make sure your customers are interested –– or can be convinced – in the experiences the innovation offers. Customer surveys, consumer personas, and other feedback mechanisms can help you gauge audience sentiment and needs.
On the way to becoming the most digitally connected generation by 2024, Gen Z is drawn to engaging, relevant content, having grown up with video-first social media and the streaming era with a plethora of content choices at their fingertips.
A good example of this was Roblox2020 virtual reality concert with rapper Lil Nas X. The platform is built on the premise of community, social commerce and gaming, and they haven’t let go of these core elements that contribute to its continued success. Roblox stuck to what they do best and delivered an experience their audience cared about.
Ultimately, integrating modern trading innovations requires both self-awareness and experimentation. Self-awareness about whether these innovations fit your organization’s brand and values is essential for a successful rollout. The ability to experiment to determine if your customers are interested in these innovations is important.
Create a culture of experimentation and then develop an agile tech stack to match it
A culture of experimentation is fundamental to achieving success with trading innovations. Let’s say you’re interested in implementing an NFT component into an existing offering. Instead of rushing to include NFT capabilities in a disjointed way, experiment and iterate with several rounds of A/B testing. Over time, this trial and error approach fosters an organizational culture of experimentation, increasing the likelihood that innovations will catch on with both new and existing customers.
But even with the right culture, a rigid tech stack can quickly nip any innovation in the bud. Conversely, an agile tech stack empowers your employees to prioritize innovation by making it easier to launch, learn, iterate, and potentially scrap trade innovations with minimal risk or loss. In addition, agile tech stacks typically include applications that do not require significant IT expertise, allowing non-technical team members to fully participate in an organizational culture rooted in experimentation.
Despite the increased willingness to opt for trade innovations under brands, 45% of non-technical business decision makers spend only a minimal portion of their annual budget improving or expanding their company’s commercial capabilities. That’s particularly interesting, as a majority (59%) of those decision makers say they’re more likely to shop with companies that offer modern trading experiences.
Bridging this gap begins with assessing current and anticipated trade innovations and how they align with current technology capabilities, brand vision and changing customer needs. By fostering an agile culture and investing in technologies that enable that agility, an organization can innovate without pause and take advantage of the right commercial trends.
Jen Jones is the head of marketing at commercetools.
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