Maintaining the Customer Relationship

Stung early on in the pandemic by the drop high-street footfall, Pret A Manger was one of many companies looking for alternative ways to reach consumers and rescue declining revenues. The firm raced to develop innovative digital propositions and new routes to market, bringing the Pret brand direct to consumers in their homes and supermarkets. Owning the customer relationship has long been critical to maintaining a strategic advantage in any sector. But it has become increasingly difficult as Big Tech and nimble start-ups disintermediate this all-important dynamic. Through mass personalisation and last-mile convenience, Amazon has developed a self-fulfilling spiral that’s difficult for suppliers and consumers to resist. Fuelled by the power of Prime, its expansion into adjacent industries, from groceries to movies, has left incumbents wondering if it’s too late to catch up. This threat of disintermediation is set to increase over the next five years. In this context, building brand affinity will take centre stage – and the battle is on. Nike developed engaging social media campaigns during the pandemic. A global leader in marketing, the sportswear giant used emotive branding and alignment with its purpose to connect with customers undergoing isolation. This helped it take more control of its product distribution. Driving customers to its free NikePlus app was a way to personalise the experience, and reduce its reliance on Amazon and third-party retailers. Some businesses see an opportunity to enhance their revenue model and increase customer loyalty. No longer confined to software, a shift towards subscription models has driven loyalty and revenue across traditionally product-orientated industries. With YourPret Barista, Pret introduced a subscription coffee service, offering up to five cups a day for a monthly fee. The use of a QR code made for a seamless experience, while facilitating data capture to enhance Pret’s understanding of their customers. While some businesses focus on their direct relationships, others are reaching customers beyond their own channels. In the banking sector, there’s an emerging shift towards embedded finance, with services intuitively integrated into other aspects of our lives. This allows small businesses owners to manage all their business needs through their accounting platform. It enables prospective house buyers to check their mortgage eligibility for specific properties while searching real-estate sites. And it lets flatmates split the bill while ordering takeaways. Investments in critical infrastructure are accelerating these trends. With 5G increasingly available to consumers, opportunities are emerging to engage consumers directly with rich content and intelligent services. Take the gaming industry, for example. Nintendo, Sony, Microsoft and others have been quick to respond to consoles taking a backseat, with gamers increasingly playing through cloud services at home or on the move. Difficult choices lie ahead. Looking to the future, we see an emerging paradox for businesses focused on customer-centricity. In the endless pursuit of making customers’ lives easier, and being there for them at the point of need, businesses must be prepared to operate in ecosystems. And that means having less ownership of, or influence over, the experience. In five years, businesses will no longer be asking whether to access customers through third parties or develop direct-to-consumer propositions. Maintaining the customer relationship will mean doing both: creating relevant, engaging and valuable interactions with customers, and meeting their needs through third-party ecosystems.