Help! SoLoMo is changing my Customer Value Chain.What can I do?
First it went Digital, then Mobile, and now consumer behavior is trending towards the confluence of Social, Local and Mobile. The allure of SoLoMo lies in its ability to drive action: according to research, a high proportion of consumers searching for "nearby" products or services on their smartphones, follow through; one report says that 90% of such consumers acted within 24 hours; 70% called the service provider in question; and 66% visited the stores.
The SoLoMo phenomenon has inspired a number of innovative businesses, mobile applications and websites like Waze and Shopkick for example, which use social, local and mobile to identify the best way to navigate through traffic or find the best deals. But while stories of SoLoMo startups and Internet firms abound, much less is heard about how larger organizations are dealing with the huge implications that SoLoMo has for their business.
In specific terms, digital consumers who research or buy using a smartphone after consulting with their social networks and fine tune their decision based on proximity of service, belong to a very different value chain than the traditional customer. They are replacing the functional consumption transaction of just a few years ago with a multi-layered relationship with brands, products, services and their providers. And business enterprises have no choice but to change their organizations in order to align with these customers, their behavior and demands.
Let's take the last one to illustrate this point. SoLoMo has at least two clear implications for organizations as they manage consumer demand - one, it enables them to enhance the purchase experience, and two, it allows them to add new capability to demand planning.
For example, with the help of social location-based services, such as Foursquare, merchant establishments can target customers who've "checked in" nearby with relevant offers and promotions. They can also use the service to analyze foot traffic or identify repeat customers.
American Express is working on a similar concept based on "Smart Offer" technology to pitch meaningful offers to card members in real time, depending on their spending pattern and current physical location. The company believes that by "organizing" deals in this manner, it can do both - help customers save time and help merchant partners reach the right customers at the right time.
Enterprises also have a real opportunity to use SoLoMo to augment augmented reality. Think of a billboard that comes alive or talks back to customers who point a mobile phone at it!
When it comes to demand planning, SoLoMo offers enterprises a chance to improve efficiency and engage with end users in new ways. Hippo, a snack food brand ran a hugely successful Twitter campaign in India, inviting customers to tweet whenever found a store that had run out of stock. The company followed through with clinical efficiency, ensuring replenishment within 48 hours, no mean feat in a country with millions of mom and pop stores, unorganized distribution and poor downstream visibility in the supply chain. What's most remarkable about this case is that it got customers - who saw their feedback working - really involved with the brand.
So, SoLoMo is not just about expedient offers and spur of the moment transactions. It has the potential to change the customer relationship. And that's not something enterprises can ignore.