The ‘W’ manifesto: two

In my last post I covered the idea that too much choice, paradoxically, is having a negative impact on the consumer. It will eventually lead to birthing a new industry of “navigators” or organisations whose sole purpose will be to simplify the lives of consumers in terms of offering them guidance and information to empower them to make the wisest choice when it comes to product and service selection.

In a sense, these organisations already exist in the form of financial and medical aid brokers. However most ‘customer navigators’ in their current form provide vertical services, focusing on a particular field of expertise, such as investment advice as opposed to covering multiple fields. Most are also designed to benefit particular companies within that category as opposed to benefiting the consumer.

There are a few exceptions, such as Mortgage SA, which helps you shop for the best home loan in the market. I do not include initiatives such as “McCarthy Call a Car” because while it helps you find your ideal car, it only searches within its network of dealerships. This is the key difference with the future navigators – they will seek only to find the best possible solution for its client without prejudice or favour.

All too soon consumers will gravitate to the navigators that have their best interests as their core strategic imperative. All other sub-category navigators will become information pools that the true navigators will consult when processing a decision for its client. As opposed to going to sub-navigators such as McCarthy Call a Car, a consumer will consult his or her navigator and it will in turn consult all the possible avenues available to come to the best possible decision, including McCarthy Call a Car.

More on how this will create a whole new industry with its own business model in my next post

The ‘W’ manifesto: one

Do you ever think about the future balance of power in the world of consumer relationships? As a marketer it is definitely worth evaluating in order to spot the fast-growing trend of offering customer-orientated solutions.

In a few years, who is going to hold the trust relationship of the consumer? Who are the gatekeepers of the future? To make sure VWV is going to keep up, we’re all over this kind of questioning.

Two key trends

I see two key trends that will drive the world’s marketers to these answers.

The first is the ever-growing insistence of everyday people to be treated as individuals and not as one of the ‘mass market’. More and more consumers are demanding customised products and services and that will soon become the only accepted norm. Companies that provide this “mass customisation” are the ones that are growing their share of the market within their particular sectors.

Which brings me to my second point, the increasing number of companies that are recognising this consumer trend and their ensuing drive to develop mass customisation methodologies as a solution.

Instead of mass customisation empowering consumers to make a choice between many competing products or services, the abundant selection has in fact made them less confident about making the best choice. This is my hypothesis but consider the economic definition of ‘opportunity cost’.

‘Opportunity cost’

An ‘opportunity cost’ is the perceived value of the best choice forgone by making an alternative choice. That is to say, if you have R10 and spend it on apples instead of oranges, your opportunity cost in that circumstance is R10 worth of oranges. The result of today’s abundant choices is giving the consumers the ‘opportunity cost’ of any particular product or service and this choice is constantly growing. Now, instead of giving up R10 worth of oranges to buy apples, you are giving up pears, bananas, watermelon, pineapples, grapes and a whole lot more.

Based on this premise, and as needs become more complex, mass customisation will grow exponentially with alternative choices – this in turn creates a situation where consumer’s ‘opportunity costs’ increase.

So, how are consumers coping in this age of abundance? They make the best choice where and how they can afford it. They also seek assistance to make these choices from professionals or other consumers that can provide purchasing guidance. This is prevalent in complex industries such as financial services and medical insurance. These are product categories that most people know little about, and in the drive to make informed decisions they seek guidance.

This trend will soon spread to industries such as travel, schooling and entertainment. The abundance of choice will further complicate even the most basic products and services and it’s only a matter of time before people will seek professional assistance to make these decisions too.

This trend will birth a new industry of “navigators” or organisations whose sole purpose is to simplify the lives of consumers. More on this in my next post.

Cape Town’s Design Indaba

I went to the Design Indaba this weekend. I’m am truly inspired by what design has become. It’s changed from being merely an artistic expression to being a creative solution for society. What is being designed are solutions for better life and it manifests as art, architecture, furniture, business, though and more. What Ravi Naidoo has done is allow South Africa to focus and celebrate its contribution to creative thought through the Design Indaba.

 Being in the conceptual age, we shuld all celebrate and support the growth of this initiative.