April 29, 2022 - 513 views
Meet the new—and empowered—consumer
Consumers are now in the driver’s seat. Here are three ways to adjust to the new power dynamic.
While we all hope the pandemic fades to a distant memory, the consumer resourcefulness it engendered is here to stay.
How could it not? There were the product outages (remember foraging through local stores for toilet paper?). There were the supply chain malfunctions and labor shortages (container ships, semi-trucks and freight trains sitting idle, with nowhere to go and nobody to unload them when they got there).
To overcome the global feeling of institutional incompetence, people everywhere needed to break from old habits and behaviors to meet the challenges of the day.
Is it any wonder that consumers—stuck at home but equipped with powerful computers and plenty of network bandwidth and surrounded by way too many new stories about the ferocious impact of climate change—developed a new mindset?
Shift in power
Meet the “new consumer”—people who no longer need to wait around for businesses to create the products they want, bring them to market efficiently and behave responsibly while doing so.
Instead, they can find and develop their own process workarounds, estimate carbon footprints, turn to DIY if it seems “greener,” discover alternative sources and create their own knowledge bases—through social media channels or even by creating their own apps—to get the products, services, experiences and information they need. (For a further exploration of this movement, part of the coming net zero era, read our recent report “The Future of Us.”)
Businesses must accept they’re no longer in the driver’s seat to meet these new consumers where they are. The lines between “business” and “consumer” will continue to blur as new paradigms like co-creation, “everything as a service” (XaaS) and distributed ledger technologies redefine ownership and power models.
Remaking the relationship
In a trend that will only grow, consumers will demand more say in their overall experience, from how they minimize their ecological footprint to the ingredients in their cologne. Here’s how businesses can renew their ties with the new consumer:
- See the consumer as a co-creator. Rather than placing consumers squarely at the receiving end of the product development process, forward-thinking businesses are including them as partners in the co-creation of goods and services. The idea is to create an end product completely personalized to the end consumer’s lifestyle and particular concerns. This may be as straightforward as color choices or as complex as a global manufacturer dramatically reducing its environmental impact.
Using lower cost and more widely accessible technology, consumers themselves are taking a greater role in creating the products or experiences they value. Through social platforms, consumers are becoming more influential than traditional marketers—building and marketing their own content in the form of beauty hacks, game streaming, wellness lifestyles and more.
Even McDonald’s, an icon of mass production and uniformity of product, has gotten in on the act; the fast-food giant recently tested “menu hacks” that allowed customers to order offbeat combinations that first emerged on TikTok.
Consumer co-creation extends to the supply chain, too. During pandemic-related lockdowns, people frustrated by supply chain chaos created tracking apps for such goods as home COVID tests, household essentials and medical supplies.
- Respect the power of the crowd. Consumers’ communities of interest—and the technology platforms that enable them—play a big role in how they part with their hard-earned money.
The 2021 Robinhood-GameStop stock controversy may be the perfect modern parable for the redistribution of power between businesses and consumers. As you may or may not recall, a group of Reddit users defied the logic of the market by banding together to drive up GameStop’s value via the Robinhood investing app. When Robinhood responded by freezing trades, the move seriously damaged its brand image because it was perceived as a turncoat that had shifted from a “for the people” stance to one “against the people.”
The moral of the story: When the crowd speaks, it’s best for companies to not just listen but also gain insight into these groups of common interest (in this case, a social media board) and monetize the ties that bind them. When companies comprehend customer affiliations at a deeper level, they can start creating products and services that are embraced by like-minded communities whose influence spreads to even more enthusiasts.
- Keep your ear to the ground. To gain the full insight needed into where consumers stand, businesses need to consider which technologies will provide them with consumers’ input at different parts of the value creation process and product lifecycle.
For example, artificial intelligence-enabled mass conversation software such as Remesh lets businesses “talk” to hundreds of people at once and then organize their thinking, using a combination of qualitative and quantitative research techniques that generate superior insights.
And with XaaS models, companies can gain the insights they need to focus on how consumers are actually using the products they sell, and respond to what a given user needs from the product—whether that means higher quality, easier maintenance or improved recyclability.
With their increased influence over product and service compilation, and the ability to create their own tools to find out what businesses aren’t ready (or can’t or don’t want) to divulge, the new consumer could ultimately influence businesses’ sourcing decisions, pricing environmental and social factors into the final cost and reshaping the value chain along the way.
For our full report, read “The Future of Us.”