By Bill Deakin, Executive Director, Americas Advisory Services, Ernst & Young
In 2000, a newly formed team at a leading global consumer goods company was charged with making sense of emerging technology and its impact on the five major business elements of the company — suppliers, retail customers, brands, distribution and consumers. In the conversations the team had with company leaders and hundreds of potential business partners, they asked the critical key question: “What will the potential impact of this new technology be against the five elements?”
More than a decade later, the impact of new and emerging technology on business remains the subject of daily discussions in almost every corner of any organization. This is especially true when the subject of “new” focuses on consumer applications. The consumer marketplace loves new.
Should business and brands love "what's new"?
Consumers may love new, but should businesses? Would attention be better spent on a more stable and strategic approach and on relationships that stand the test of time than the vagaries of consumer behavior? Rather than asking “What’s new?,” businesses benefit more from focusing on principles that endure long into the future.
The challenge in a world where consumers are always connected, networked, social and demand that their voice be heard in any discussion, is determining which business principles deserve the best resources and incremental investment. There are a number that have been considered and tested over the last few years. Here are three that retailers can count on in the longer term:
1. Every business is being compared to the best online companies.
Consumers are setting their expectations of any company based on the experiences that they and others have with the best online companies in the world. Leading online companies provide a consistently great experience: one-click, easy navigation, anticipating the needs of consumers, relevant recommendations, suggestions from a community of consumers with similar interests, flexible and fast delivery options and recognizing consumers when they come back. Online companies are the best at delivering on the promises all business would like to make to consumers. And online leaders continue to expand their capability and capacity to build sustainable competitive advantage — making the job of pleasing consumers harder for everyone else.
The totality of the best online experiences provides a clear picture to consumers about the quality of every other company and how interested each is in earning and maintaining their business. From the oil change on Saturday morning to the online hotel reservation and all experiences in between, a company’s most relevant benchmark is no longer against industry peers — it’s online.
2. The point of sale is at the moment of inspiration.
The point of sale for products and services has changed from a physical setting to any setting, at any moment. The point of sale is now at the “moment of inspiration.” The consumer is in complete control of the point of sale, and has the skills, tools and technology to easily replace traditional channels. As such, businesses need to shift their strategy from points of marketing to creating and converting moments of inspiration. Marketers have the ability to create images, experiences and messages that stimulate the wants and needs of consumers as always—the difference is the consumer’s ability to act immediately. Businesses that adapt to the new reality and expand the choices of when, where and how products are bought and sold improve their chances with the consumer. Compelling, inspiring and always available to consumers on their terms — these are qualities businesses must embrace to succeed now that the point of sale is at the moment of inspiration.
3. CMOx: Hire networks of consumers to lead your marketing.
The era of the traditional CMO (chief marketing officer) is over. The emergence of pervasive, global, wireless technology and a more demanding consumer compel marketers to embrace the concept of the consumer as the new chief of marketing. Dynamically forming consumer networks offers both the exponential benefits of traditional networks and the peril of embracing the growing voice and influence of the consumer who is recast in the leading role in marketing now known as Consumer Marketing Officers x (CMOx).
In this new era, millions of consumers make individual decisions when they are inspired to buy. They make choices quickly and decisively. With a key stroke, a thumb to a touch screen, a call from a friend or a posting on social networks, consumers’ actions can add up quickly to success for leading firms — or spell disadvantage for those out of position with networked consumers.
As technology becomes more mobile and sophisticated, consumers will take their preferences, communities and expectations everywhere, all the time. They will not hesitate to share their good, average or terrible experiences about products, services and companies with both friends and strangers. By embracing CMOx and focus on expanding the network, companies will experience both a cumulative advantage and exponential growth.
It's "and" not "or"
The competition is offering “and” to your consumers. The three enduring principles above are elements of an experience that work together to meet the needs and expectations of the marketplace. Excellent experiences with leading global online providers all include “and.” As a result, each has raised consumer expectations for all businesses.
Reaching for what is “new” to remain competitive is one option. However, the more effective approach is to first focus on the enduring principles that will position your offerings to the marketplace to outlast whatever else comes along.
The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP. (Photo by Carbon Arc.)