One of the COVID-19 impacts on the retail sector that is likely to be permanent is the pivot towards the need to have a robust direct-to-consumer (D2C) strategy in place. Some firms were already embarked on developing this capability; others have been compelled to play catch-up through circumstance.
Take Sonos as a case in point. The company created the multi-room, wi-fi speaker market nearly two decades ago. D2C has always played a part in the firm's go-to-market thinking, but recently the events of this year has accelerated its growth, as Zach Kramer, VP and General Manager of Consumer recalled at the launch of Salesforce Digital 360 last week:
We saw a day in March where the business totally went from one direction to another direction. We had one store, that store obviously had to close. All of our partner retailers shut down. Obviously, Amazon was overloaded with necessities that they were prioritizing. We had to change the focus of our business from a predominantly third party retail-driven business to one that was very reliant on D2C.
This meant rethinking strategic plans to accommodate the new realities of retail:
We had to deal with volumes both to our call center and to our website that were two or three times what we would see in holiday, and just completely re-jig our plan around to take advantage of the opportunity. And that was not only about people looking for products, but that was people looking for help with their Sonos system given that they were sheltering in place. They had more demands on the system, had more questions on how to use it properly. So the entire focus of our business changed from that third party retail focus to talking with customers directly and trying to make sure that they were getting exactly what they needed out of sodas.
What consumers are looking for as part of the customer experience has evolved rapidly in recent months, he added:
I think the big thing that we're seeing is basically everything that was going to happen in five years happened in about three months for us; What we saw as people's willingness to shop online for pretty experiential products, which I would consider Sonos - you know, it has a certain look and aesthetic that you need to know works in your home. It is a sound product, you [need to] know how it sounds and how that experience is - they're much more willing to consider purchases like that online than they would have beforehand where maybe they wanted to talk to somebody in person. So what we're really focused on now is how do we recreate that physical experience or that consultative sales experience as best as we can.
Obviously, we have channels of people who go into your own install zone, the installed solutions channel. Some people really want that kind of experience. If they're building a house or re-modelling, we make sure that those people get to those kinds of customer installers or dealers for us as quickly as possible. And then for the rest, we're really focused on how do we give people the information that they need to feel comfortable purchasing online with Sonos? If they want to purchase somewhere else, obviously, that's fine, too. But it's things like, how will the speaker look in your house? How does the speaker sound in relation to maybe the needs that you have? A sound bar for your TV, what's the differences between our high end art product and our lower end beam product? We spend a lot of time AB testing all of that sort of things to make sure we're giving people the information they need to feel comfortable purchasing.
To that end, Sonos uses a number of Salesforce products to ensure there is a consistent consumer experience, Kramer explained:
Like most companies, the thing that we try to do the most is make sure people are getting the most out of Sonos and have the best experience possible. We use Salesforce to make sure we do exactly that. We know the higher somebody's NPS [Net Promoter Score] is, the more likely they are to recommend Sonos, the more likely they are to buy another Sonos product in the future. So we've organized all of our data within Salesforce across all the products, the Marketing Cloud and the rest of it, to make sure that we give them the right kinds of information and the right kinds of offers to drive exactly that.
We know that listening is a big driver of NPS, so we have a whole series of actions we take with people to make sure that they know all the things that Sonos can do, all the different content they can play, all the different ways they can control the system. We use Salesforce to organize all that data. So when we have that single source of truth, we know for that consumer what they are using and what is working well and maybe what things that they might not know about that they should take advantage of with Sonos that's already in the product. So we use Salesforce to make sure that we just get all that information to our consumers. Obviously when we have a promotion or a new product or new feature that comes out, we're able to use that in the pursuit of that Net Promoter Score.
The emphasis on digital transformation is a dominating factor, he added:
We think about it all the time. We have a saying - you've got to look at your feet and look at the horizon. Right now we're trying to do a mix of both. We think this is going to continue, we think that some of these behaviors are going to be pretty permanent. We're thinking through everything from what a site experience looks like for somebody who might have typically gone to a store and is now going to go to the website instead. We think about all of the purchasing steps that they go through and what the funnel looks like. People are just making purchases much more quickly than they have in the past, so the kinds of information we need to get to them along the way has changed and accelerated. We think about all of our infrastructure systems and our data. The way we organize our data with Salesforce to make sure that we do have that single source of truth, because obviously, as soon as you start to treat people the same or as soon as you start to give people information that's not relevant, you see that reflected immediately with bad unsubscribe rates and loss of usage on the system and the rest of it.
The biggest [thing we track] for us is always usage. Let's just make sure people are using the product and having a good experience with the product. And then we look at the other set of features that we think that people should use, like the number of music services they might listen to, or the number of speakers they have. And we track that all along the way to make sure that everything continues to move in the direction that we want it to.