Introduction
World is changing too fast as never before. The revolution in technological connectivity has opened the new market gateways and markets are emerging from different parts of the world. New emerging markets have increased spending in the world overall. According to a survey, by 2015, the consumer's spending power in emerging economies will increase from current $4 trillion to more than $9 trillion. Today, information is readily available to everyone leading to commoditization of even high values goods. Markets have become global and consumers have transformed themselves to Global Consumers.
Global trends survey results: Two Views of the Future: % of Respondents Indicating a Significant Impact of Global Trends in 5 years – By Nationality of Organization
On the hindsight, the markets have also become dynamic and highly sensitive to changes. Recession causing rising anxiety has lead consumers to view the marketplace in new ways - demanding ever greater value. Companies are facing unprecedented challenges on all fronts like retail, consumer, competition and growth. Rules of the business are changing everyday and conventional management is failing to produce results. Markets and companies need to align themselves efficiently and strategically to combat these trends and stay in the business else they will soon be losing their sheen in the dynamic market with changing consumer landscape.
Changing Values of Consumer
The recent slowdown has brought down a significant change in the mind-set of the majority of consumer all over world. The consumers have become highly realistic and could not just accept anything.
Brand loyalty is diminishing as consumers have become more value driven and diverse in their purchasing decisions. Retailers and manufacturers are resorting to price cuts to help stimulate demand, resulting in downward pressure on margins. However, reducing price is not the only option as consumers are willing to pay given that he gets the desired value in the transaction. Consumers also are becoming more segmented (e.g., economic disparity, ethnic diversity, age stratification that is fragmenting demand and increasing product complexity). In such scenario, products will need to give better value. For sustenance, it’s imperative for markets and companies to understand changing attitudes & values of the target consumers and overall consumer landscape.
World is Flat: Information and Technology Revolution
The information and latest digital connectivity revolution have made the ground for competition, communication and interaction flat for everyone. The businesses are shifting online making the unique form of market place at a global level. Online markets have created price transparency and increased commoditization of products. According to recent reports, in 2008, there are 1.46 billion people online and traffic has grown at the rate of 57% in 2007 and 62% in 2008. It has been predicted that the numbers of user will double every 2 years at least until 2012. As the percentage of consumers with Internet access increases, e-commerce will become more and more viable. As the differences are shrinking due to transparency, trends in market are becoming largely macro.
In this abundance era things can be cloned, faked or reproduced very easily, however, reputation, values, attitude, love, and care are still priceless. Companies need to position themselves effectively and strategically different to combat these trends and stay in the business else they will be caught in the cycle of commoditization, declining prices, excess inventory and slower growth. Innovation in products, designs, customer-offering is the only way to perform well in such a changing consumer landscape. Gaining Technological advantage to cope with the dynamic consumer landscape may give an extra edge to the firm over companies.
Changing Demographics and Aging population
Changing Demographics is another significant factor in changing consumer landscape, which companies should take care. Increase in global population with exponential increase in Hispanic population will create a bigger diversity in every part of the world which in turn depletes the concept of brand loyalty and long-term satisfied customers. Large populations and population growth rates in emerging markets is leading to new avenues for consumer goods product growth. These markets desires for efficient but low-cost product. Aging population has increased demand for health and beauty aids. The buying shift of this demographic group is blurring the distinction between consumer goods and pharmaceutical companies.
Web 2.0 economics
Web 2.0 which is the second generation of the web development and web design has become the latest buzzword of development in the current world. It includes social-networking sites, video-sharing sites, wikis, blogs and mashups.Everyday thousands of people are getting into the net of Web 2.0 and contributing in this new space of communication. It’s becoming an important tool for communication in real time with whole of the world.
The concept is already creating the huge waves in media industry with a new name as Social Media. It provides the tools for information, participation, interaction, collaboration and contributions. Soon companies need to focus upon this complete new avenue to promote themselves and their products.
Modern ways of Advertising
Advertising needs to become value-oriented. Modern day consumer can't stand traditional advertising anymore. The advertising should be oriented with providing information, guidance, education, utility and help etc. The advertisements should not be thrown upon the customers rather it should be customized for the customer same as the products.
The customized, text based advertising by Google while searching on www.google.com or reading mails on Gmail is a great example of the new age advertising. Similarly, JustDial service in metro cities of India which provides free general consultation/query services on phone does the focused advertising for the consumer. It sends message and calls users with the relevant advertisements for which user have queried them on call.
Conclusion
So, getting more “real”, “authentic”, “ethical” and “environmental” is the need of the hour. The financial crisis may just be the catalyst that created a true vanguard of change in many of the developed economies. Changes in consumer values, changes in Consumer Demographics, advanced developments in Information and Technology, especially Web 2.0 are few key drivers in Changing Consumer Landscape. Brands and products need to reflect these changes in their proposition, making any transitions as smooth as possible in order to maintain relevance and ensure success in the ‘new consumer landscape’.
The market has gone global and has become like an arena with scenes changing very fast. It will take no time to fail if companies stop innovation, make smart and visionary strategic decisions and remains pro-active in anticipating and adapting in a market with Changing Consumer Landscape.
References:
“Meet the Brand Killers,” Fortune.11, 2003.
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2. 2003 GMA Logistics Study, Key Industry Trends in the Food, Grocery and Consumer Product Supply Chain, by Roland Berger, April 2003
3. “Meet the Brand Killers,” Fortune. August 11, 2003.
4. “Stimulating Consumer Demand Through Meaningful Innovation,” Accenture Institute for Strategic Change. November 2002.
5. Breene, Tim, “Redefining High Performance,” Outlook Journal, Accenture. October 2003.
- www.bordbia.ie
- www.luli.com.br
- What Sets High-Performance Companies Apart in the Changing Consumer Goods Landscape, www.accenture.com
- “Perspectives of Manager”, IMD International – 152, Nov, 2007
Varun
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