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Whether it’s the metaverse, social marketability or cryptocurrencies, brands are racing to determine which trend best aligns with their technology capabilities and customer value proposition.
In a rush, it’s easy to misjudge how any particular trend may or may not connect with your audience. For example, earlier this year, the hostess unexpectedly announced the launch of “$TWINKcoin,” a crypto-inspired, coin-shaped version of its classic Twinkie snack cake.
Not only did the hostess receive backlash from the LGBTQ+ community for its careless use of the offensive term, but also a lot of confusion among its customers. The connection between the baked goods conglomerate and the cryptocurrency the world is not clear on their announcement.
That said, Hostess’ desire to insert itself into the often headline-grabbing crypto conversation is understandable. Several consumer brands such as Nike, Sotheby’s and Coca Cola made the same leap in 2021 and were met with success and positive headlines for the coming weeks and months. But months after its launch, no one outside of Hostess understood the brand’s entry point into crypto –– but we remember it was a flop.
Avoiding a change mistake
Interest in commercial trends such as those mentioned is still growing. In fact, companies associated with the metaverse have raised more than $10 billion last year, nearly doubling the amount raised in 2020. And that trend isn’t slowing down — the market size for the metaverse is expected to hit nearly $700 billion by 2030.
However, as evidenced, opting into these trends falls apart when it doesn’t have a clear connection to your brand and business model. In the Hostess example, if we set aside the offensive nature of the campaign, the value of the company’s product, customers and this new foray are incompatible.
At the other end of the spectrum, Sephora has found success in using cutting-edge commerce innovations as part of its omnichannel experiences. The beauty retailer adopted technology that allowed its customers to shop, interact with live representatives and gain access to exclusive discounts all on its mobile app.
In stores, as well as on its app, Sephora customers benefit augmented reality (AR) virtual try-on and Color IQ technology to find the right foundation shade for their skin tone. Sephora uses data generated through in-person and virtual interactions to provide personalized communications, recommendations, and experiences to customers. This was tech trend adoption done right — Sephora prioritized its customers’ habits and pursued experiences that complemented its business model.
To achieve similar results, organizations must evaluate whether a new innovation is consistent with its brand identity and customer behavior. Additionally, it is important to build a company culture that prioritizes continuous experimentation. For example, Sephora launched a innovation lab in 2015 to test in-store experiences before rolling them out broadly, thus keeping operating costs down while getting real feedback.
Prioritize brand authenticity and customer relevance
Trending commerce innovations often look impressive, especially from a distance. But it’s important to define a clear business case before you commit to resources.
Start by determining how a new innovation will deliver revenue and reinforce your brand’s values and image. Just as important, make sure your customers are interested –– or can be convinced to be –– in the experiences the innovation offers. Customer surveys, consumer personas and other feedback mechanisms can help you gauge audience sentiment and needs.
On track to be the most digitally connected generation by 2024, Gen Z is attracted to compelling, relevant content, having grown up in video-first social media and the streaming era with a host of content options at their fingertips.
A good example of this is Roblox 2020 virtual reality concert with rapper Lil Nas X. The platform was built on the basis of community, social commerce and gaming, and they wisely did not neglect these key elements that contribute to its continued success. Roblox has stuck to what they do best and delivered an experience their audience values.
Ultimately, integrating cutting-edge innovations into commerce requires both self-awareness and experimentation. Self-awareness about whether these changes are appropriate for your organization’s brand and values is essential to a successful launch. The ability to experiment to determine if your customers are interested in these key changes.
Create a culture of experimentation, then build an agile tech stack to match
A culture of experimentation is essential to achieving success in commercial innovations. Suppose you are interested in implementing an NFT component in an existing offering. Instead of rushing to integrate NFT capabilities into the offering in isolation, experiment and iterate through several rounds of A/B testing. Over time, this try-again approach fosters an organizational culture of experimentation that increases the likelihood that innovations will resonate with new and existing customers.
But even with the right culture, a rigid tech stack can quickly stifle any change. Conversely, an agile tech stack empowers your employees to prioritize innovation by making it easier to launch, learn, iterate and potentially scrap commerce innovations with minimal risk or loss. Additionally, agile tech stacks often 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 appetite to opt in to commercial innovations among brands, 45% of non-technical business decision makers allocate only a small amount of their annual budget towards improving or expanding their company’s commercial capabilities. That’s particularly interesting, considering the majority (59%) of those decision makers say they’re more likely to shop with companies that offer modern commerce experiences.
Bridging this space begins with an assessment of current and anticipated commercial innovations and how they align with existing technology capabilities, brand vision, and evolving customer needs. By adopting an agile culture and investing in the technologies that enable that agility, an organization can change without pause and take advantage of the right commerce trends.
Jen Jones is chief marketing officer for commercetools.
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