Saturday, May 20, 2017

Using digital and data to get closer to users

Two articles in the latest issue of Fast Company caught my attention. One was about how Ulta Beauty has now surpassed Sephora to become the nation’s largest beauty merchant, while the other was on how Hulu is looking at reprogramming the way we watch TV

Though they are two different companies in vastly different industries, both articles were riffing on the same theme: how companies are using digital and data to get closer to the user.

Previously, Ulta has been known for its discounts and coupons. They have since edged away from that, and instead, incentivize customers to join their loyalty program, allowing them to tailor benefits to the shopper. Ulta believes that thoughtful freebies do more to deepen the customer’s emotional connection with them than a generic discount eDM. 

Ulta also goes on shop-alongs with customers, asking them about what they like and how they use the products as they move through the store. Coupling this intel with data from their robust loyalty program, Ulta is able to complete a picture of the customer. This understanding informs Ulta about how to market more than 20,000 of their products for maximum impact. 

The strategy appears to be working. The program’s 21.7 million active members now generate more than 90% of Ulta’s overall sales.

At Hulu, they have been obsessing over the new user-interface for Hulu’s network bundle, deconstructing everything from a screen’s “information density” (how many titles you see at one time) and background color gradation to how much time it takes new users to complete the onboarding process (three minutes).

The belief is that if the content itself isn’t the differentiator, then they have to look to other things to compete. Hulu’s future, and that of its traditional entertainment partners, rests on reimagining the user experience and creating a bold new template for how we consume TV.

To understand what their users want, and to help educate these algorithms, Hulu has deconstructed its programming to remarkably granular levels. Users can express a preference for everything from “fantasy anime” to “romantic K-dramas.” Users get customizable profiles, and Hulu surfaces content for them in real time. Some of its selections are users’ own picks; the rest comes care of Hulu’s predictive algorithms.

The result is an elegant, recommendation-filled interface that’s filled with poster art, one that’s worlds away from the experience of pulling up a clunky grid of channels and deciphering hard-to-read text. In trying to understand the user better so as to improve the experience of TV-watching, Hulu hopes to elevate and distinguish their unique offering, thereby changing the way we experience TV.

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