Last week we looked at the paradoxes of marketing to connected consumers Today we are going to introduce the second paradox that being Online interactions vs Offline interactions.

The impact of connectivity with regard to online and offline businesses is not clear-cut. While online business have taken up a significant portion of the market in recent years, I do not believe that they will completely replace offline business. Similarly, I do not believe that the online “new wave” marketing will ultimately replace the offline “legacy” marketing. In fact, I believe that they need to coexist to deliver the best consumer experience.

Here is why: in an increasingly high-tech world, high-touch interaction is becoming the new differentiation. Birchbox, an online-first beauty product retailer, opened its brick-and-mortar store to complement its existing e-commerce business. The retailer provides iPads to make personalized recommendations, mimicking its online personalization scheme. Zappos, an online shoe and clothing retailer, relies heavily on very personal call-center interactions as a winning formula. Buying shoes online can be a daunting task for many consumers, but a touch of personal consultation from the call-center agents reduces the psychological barrier. Another example is Bank of America’s Express Financial Centers. When making transactions on ATMs in these centers, customers can video-chat with a personal teller for assistance. The service combines ATM convenience with a personalized human touch.

Even Amazon needed to create a “physical channel” with its Dash Button, which allows shoppers to automatically replenish household products such as coffee and detergent with a push of a doorbell-sized button. It is Amazon’s early “internet of things” attempt to connect otherwise offline devices such as a coffee maker and a washing machine. With it’s purchase of Whole Foods, Amazon is also complementing it’s online juggernaut with ‘physical’ distribution outlets.

On the other hand, a high-tech interface can also enhance a predominantly high-touch interaction, making it more compelling. Macy’s Shop Beacon project is an example of this. With Apple’s iBeacon transmitters installed in various locations within a Macy’s store, consumers will be alerted with highly targeted offerings throughout their journey in-store. When walking past a certain department, consumers might be reminded of their shopping list, receive discount notifications, and get gift recommendations through an iPhone app. As transaction data accumulate over time, the offerings will become more personalized to each shopper profile. Another example is John Lewis’s sofa studio, which allows consumers to select a sofa model from 3-D printed miniatures. By placing a miniature alongside a selection of fabric in front of a computer screen, consumers can see what their sofa will look like on the screen. It gives a very playful consumer experience when choosing sofa model and fabric.

As it turns out, the online and offline world will eventually coexist and converge. Technology touches both the online world and the offline physical space, making it possible for the ultimate online–offline convergence. Sensor technologies, such as near field communication (NFC) and location-based iBeacon, provide a far more compelling customer experience. In the engine room, big-data analytics enables the personalization that new customers are longing for. All of these complement the traditional human interface that was the backbone of marketing before the rise of the internet. A perfect example of this was the ‘Gourmet Creations Kiosk’ an innovation by McDonalds to encourage personalization and consumer creativity in-store.

Traditional and contemporary media for marketing communications such as television and social media will also complement each other. Many people go to Twitter for breaking news but eventually return to television and watch CNN for more credible and deeper news coverage. On the other hand, watching television is often a trigger for people to pursue online activities on their smartphones. For example, a movie showing on television might trigger an online review search. I know I get a deeper appreciation of a film or documentary by a parallel glance to Wikipedia. A television commercial can also be a call to action for people to buy products online.

The characters of the new consumers prompt us to realize that the future of marketing will be a seamless blend of online and offline experiences across consumer paths. Even though I am an AFL addict, I have also become an NFL addict and to fuel my addiction on a Monday morning I can watch all the NFL games on my TV screen with a recent innovation called NFL Redzone. Again Twitter used to play this role for me but the offline world provided by Foxtel has stepped up to the plate. In the beginning, brand awareness and appeal will come from a mix of analytics-powered marketing communications, past consumer experiences, and recommendations from friends and family, both online and offline. Consumers will then follow up through series of further research, utilizing the reviews from other consumers—again online and offline. If consumers decide to make a purchase, they will experience a personalized touch from both the machine and the human interface. Experienced consumers will in turn become advocates for inexperienced consumers. Entire experiences are recorded, which further improves the accuracy of the analytics engine.

In a highly connected world, a key challenge for brands and companies is to integrate online and offline elements into the total consumer experience.

CMO Perspective: John Costello – Dunkin Donuts

Dunkin’ has strongly embraced the digital world and more recently moved into mobile. “America Runs on Dunkin” is more than a tagline. It really is Dunkin Donuts’ brand purpose. Our goal is to help people get running in the morning and to keep them running all day long with great beverages and food at a great value in a fast, friendly and convenient environment.

Given that, mobile was a logical next step for us. It’s the perfect platform for a brand designed for people on the run. And I think a lot of our success in mobile has been listening to what our customers want and then developing solutions in a collaborative way. Our mobile app has over fifteen million downloads and was built with world-class technology and features that our customers wanted. For example, you could pay with the Dunkin’ Donuts mobile app from day one. We have a store locator on there to help locate a Dunkin’ Donuts when you’re travelling, as well as personalised marketing when you sign up for our DD Perks loyalty program.

I think a lot of success of the mobile program was that it was our most collaborative project to date. As you would expect, marketing and IT were very involved in leading the effort, but it also involved strong collaboration with operations, our franchise partners, HR, training, PR, and customer service. The collaborative nature of the mobile app combined with listening to our customers are key factors of its success. In exploring new technology, it’s easy to get caught up in the latest gee-whiz technology, but we found there is no substitute for listening to your customers and providing what they want in an easy and seamless way.

Building that data has been a big part of the success, as we’re able to better learn what our consumers want and then tailor product news and offers based not only what they they’ve purchased but also what they are interested in. For example, beyond providing incentives on their favourite beverages and food, we’ve also learned that our consumers love new products, so we inform them of all the new products we introduce. The data does provide an opportunity for more targeted marketing, but I would offer two caveats to that. First, data should supplement your judgement, not replace it. Secondly, with increased data comes the need for a careful respect for consumer’s privacy.

Dunkin Donuts is a very responsive brand, and as a result, digital, social and mobile marketing have worked well for us. However, traditional marketing, like TV, out of home radio, and in store point of sales materials also continue to work well. The new digital media is growing faster than traditional marketing, but it needs to earn its way. One of the key barriers to more rapid growth of digital is the lack of common ROI metrics across new and traditional marketing.

I expect digital and mobile marketing to continue to grow at a rapid rate, but the industry needs to make more progress against common ROI methodologies.