Changing consumer and shopping behavior
The complexity in Buying Behavior is evolving, even more so with consumers’ high “involvement” in their purchase decision. Involvement refers to actions the consumer must take to understand the product or service they are motivated to buy. When high involvement is necessary, the consumer does whatever they can to learn: research, read reviews, talk to others, and “test drive” different models at retail locations.
High involvement tends to be associated with products that are more expensive, infrequently purchased, technologically advanced, and highly expressive of the buyer’s personality profile. The involvement process helps the consumer understand the differences between the brands of products they are motivated to buy. This process is where the consumer develops (and sometimes changes) their beliefs and attitudes. These beliefs and attitudes, along with their buying motives, will influence the consumer’s decision.
Marketers of high-involvement products need to have an understanding of the buying process. It is their job to help the consumer learn about their product, and create messaging that influences the buyer’s beliefs and attitudes about competitor’s products. Understanding your target customer’s Personality Profile is key and gives significant opportunity to craft compelling digital customer experiences in the brand discovery and engagement process.
The pace in which society and its consumers become fully digital, and the speed at which technology gets innovated, gives opportunities for companies to change the way they run their business in the most fundamental way. Business models change and as a consequence, the operating models need to change at a higher speed than ever before in order to remain relevant and competitive in the markets of today.
Increasing and more sophisticated customer demands, driven by digitization, apps and the cloud, are forcing companies to adopt new business models and deploy advanced technologies to help improve productivity. Today, consumers are used to buying products with their smart phone enabled barcode reader when they are walking on the street, reading a magazine or wherever they are; or learning and discovering new products and services on their second or third screen while they are simultaneously doing something else.
Technology can drive performance and can enable customer centric transformation. While many companies are discovering that product and services alone are not enough to capture the hearts and minds of consumers, they learn how new ways of building a continuous digital dialogue can be used to help the customer in their brand discovery and engagement process. Emerging technologies include data analytics, digital mobile, digital media and cloud. In many cases even the back office ERP systems need to be re-implemented to enable the transformation from a product centric business model to a fully digital customer centric model. We see fundamental themes for business transformation are customer centricity, organizational agility, corporate transparency, breakthrough innovations and adaptive supply chain commerce.
Changing business models
Many companies rethink their business models. Why? The first reason is the increasing speed of everything. Product life cycles and design cycles are getting shorter. When the pace of change gets faster, people realize that they need to look for the next big thing. The second issue is interindustry competition. Competition is coming from unexpected places. Who could have anticipated that the iPad’s success would put all kinds of display devices—like television, photo albums, electronic photo frames—out of business? And the third trend is disruptions from business models that offer far better customer experiences instead of simply products.
All industries that have relatively low barriers to entry like proprietary technology, face new kinds of competition. It is easy for competitors to come after you once you have demonstrated that a market exists.
Are you in an industry in which innovations offer smaller and smaller improvements? Do you hear customers saying that new alternatives are increasingly acceptable to them? Is your growth slowing down? Are your margins eroding? Then your business model might be in trouble. It takes courage to let go of traditional successes, to choose a fundamentally new path. Most companies recognize it too late, go through the pain of reorganization before they are able to reinvest, redirect and change the way to become relevant again in the market place. Rethink, before it happens to you.