How a new generation of customers relies on experience to shape products and services

Aconsumer group whose members' buying habits depend on what others have experienced is changing how businesses are providing products and services to their target market.

The emergence of “generation customer experience” or GenCX has placed more weight on the opinion of others and has played a huge role on whether this consumer group will purchase a product or avail of a particular services.

“It is a shift of power from the sellers to the customers,” Alvin Ching, vice-president and seller engagement head of Lazada Philippines, said during the second Philippine Retail Summit with the theme #GenCX: The ultimate retail disruptors held at the SMX Convention Center Aura in Taguig City on March 14.

“Customers would listen more to those who have already experienced your product or service more than how you position in the market,” he added.

These buyers are not a new group. But their presence has become stronger especially in Southeast Asia with the emergence of e-commerce. Their strong influence on other consumers has pushed businesses to cater to what the group wants and needs to gain loyalty.

Jonathan Yabut, managing director of JY Consultancy Ventures, said the idea is to offer a “fantastic” customer experience that could lead consumers to stick to a product and referring it to others.

“I think the pinnacle of being a great CX provider is achieving the top of the pyramid,” he said during his presentation. He was referring to how to win the loyalty of one's customers.

Mr. Yabut noted GenCX trends that firms should keep in mind to attract this consumer group. He said the most important factor is to have or develop a product or service that is “instagrammable” as GenCX consumers put more importance on what is visually appealing.

“Instagrammable does not only refer to Instagram,” he said, referring to the popular social media application. “It could be any platform where you can brag what you think you can talk about.”

He cited for instance the “unicorn” Frappuccino that Starbucks released in 2017. Many were attracted to the drink that gave the feel of a unicorn. More than the taste, it was the visual appeal of the product that made people buy it.

“The intention was that the entire product was so beautiful it pops out excellently on Instagram or on Facebook that when you take a photo of it and you're the one who is able grab it and not your friends, you become the envy of your social circle,” he said.

“We decide not by the functionality of the product but because of the visual reasons that can make a better image out of us,” he added.

“We choose, therefore, not because of our senses of taste or our hearing. We choose because of our visual decisions behind it,” he said.

GenCX consumers also give importance to product reviews. They usually delay the purchase of a product until they are able to do enough research of it. Unboxing videos, ratings, and other ways of expressing one's opinion of a product have influenced others' decision on whether to buy or not.

“From 2D, we have become more 360 because if it's only a photo, it can be easily faked, and we love videos because they are more authentic and they give us the real feel,” Yabut said.

Consumers rate a product even without an incentive to do so because it gives them a sense of being part of a community.

Regina Saquin, head of Zalora's CX, said the company places a big importance to what its customers think. It usually reaches out to customers through ways like web surveys to know their preferences.

“In a data-driven society, it pays to take a step back and just listen to the customer,” she said in her presentation.

Mr. Yabut said these consumers are more inclined to products or services that are able to adapt to their needs. For instance, when Samsung developed its smartphones it asked customers about what they want on their phone. The response included better battery capacity and power, which the company applied to its products.

“That in itself is an example that when you really ask your customers what they want, they can offer it to you,” he noted.

Mr. Yabut emphasized the role of the customer's idea, which may later shape what the business will be. He said some ideas cannot be ignored or resisted, and that certain aspects of customer experience could lead to “the next big thing” for a business.

For Mr. Ching, GenCX is not a trend.

“We are at an inflection point and again we can never go back to where we were before, and because it's not a trend, it's a new reality. One thing we have to do is to be very strategic about it, so you have to think of the long term,” he said.