This XSeed blog was written by XSeed Capital Partner, Robert Siegel, and originally appeared on Pixlee.com.
In the history of marketing, consumer product companies were the original leaders in understanding how data impacts their organization’s sales. Firms such as Proctor and Gamble and Unilever sold millions of goods across hundreds of product lines, and they used demographic information to target broad swaths of society with their wares.
Over the last decade, companies began to get even more specific in their developing of personal relationships with customers. In North America, one of the most widely seen examples is at supermarkets, where companies can track not only how much volume is being sold of a particular brand of toothpaste, but with loyalty cards, stores also know which individuals are buying which specific products. More recently, online merchants are able to track people’s purchase behaviors and web surfing habits, and then offer product recommendations or retargeted ads in order to facilitate transactions. Even the recent Presidential election showed the power of data to shape the results of the 2012 outcome.
But a new opportunity is developing that could fundamentally reinvent how brands understand ways their customers interact with products after an initial sale is made: user generated images.
The old adage is that a picture is worth a thousand words, and with Facebook storing 350 million new photos daily, Snapchat’s users sending over 400 million photos daily and with Instagram hosting over 55 million new photos each day, the quantity of visual information being created is almost beyond comprehension. In fact, it is becoming incumbent for brands to understand the ways in which customers are using and interacting with their products so that future product decisions are aligned with end users’ desires and actions.
With the exponential growth of the visual internet, companies can see on an ongoing basis who their customers are, the physical settings where their customers live, and how customers use and interact with products and brands. As eCommerce continues its rise and consumers purchase a greater share of products online, both owners of brands and channels lose some of the face-time and customer contact that comes from interactions in brick-and-mortar stores. Observing how customers are wearing a brand’s clothes can be critical for understanding how well (or poorly) clothes sit on individuals (a quality assurance issue), what other products are being paired with a company’s brand, and other behavioral and demographic information that can actually be hidden when purchase transactions are electronic.
The ability to understand and analyze what happens beyond the walls of the retail environment is incredibly powerful and will fundamentally change how marketing decisions are made.
The opportunity this creates for an emerging set of startups is to help other companies develop more intimate relationships with customers so that these firms can make better decisions that range from product design to channel distribution to calls to action. Additionally, by directly interacting with customers through community pages, events, and fan pages through content created by end users, owners of brands have a new way to observe and communicate with their customer base thru a high volume medium which is deeply authentic to how customers actually live with brands and products.
This level of interactivity and intimacy has tremendous value for those firms who engage with their customers at the moment these people live their lives, and not simply when a transaction is conducted. The companies that take advantage of this ongoing relationship will have a tremendous competitive advantage in providing products and services with which customers will both embrace and identify, creating a more strongly loyal and engaged customer base than was previously possible.