A fundamental shift is occurring, away from manufacturing and service economies towards creative economies, in which companies that embrace information, agility and the “cross-pollination” of technology will thrive. The author Steve Dunning defined the creative economy as “an economy in which the driving force is innovation. It is an economy in which organizations are nimble and agile and continually offering new value to customers and delivering it sooner.”
But it is not just companies that can benefit. Individuals who use new forms of technology to solve problems will be able to think more creatively to address both personal and professional issues. And their actions will, indirectly or directly, affect the economy and business landscape. Businesses should take heed.
The emergence of what I call the “empowered consumer” is part of this trend. This consumer has been shaped by the convergence of the mobile, social, cloud and big data megatrends and is driving serious amounts of personal and business expenditure. The empowered consumer has used technology and information to shift the balance of power towards herself and away from sellers, giving her unprecedented control over price and choice.
The empowered consumer has used information technology to shift the balance of power away from sellers and towards themselves, allowing unprecedented price and choice control. This goes beyond the consumerization of IT. Rather, it is a change in consumers’ expectations about their interactions with suppliers and partners. It creates new choices and competitive dynamics, and these must be dealt with by all organizations in the move towards a creative economy.
There are five characteristics that empowered consumers typically display. These individuals tend to be:
- Highly informed: they get their information from multiple sources before making decisions, many of which are online. Posting pictures on Facebook and following celebrity tweets evolved into gathering social recommendations, reading user reviews before buying important items, and comparison-shopping online and in store simultaneously. They often have more product and competitive information than the company’s sales associate.
- Mobile: their phone or tablet is more important than their wallet, and is always with them. They view it as an always-on, digital personal assistant that understands who they are, where they are and what they want. They use it to gather information, make decisions and complete tasks.
- Loyal: but only if it is rewarded. While they are value conscious, they also view time and respect as precious commodities. They expect brands to understand who they are and how they make purchases across the various offerings and channels (mobile, online, in store), and also expect services that are tailored to them.
- Hands-on: they can and will create their own user experience by picking best-of-breed cloud services, or going peer-to-peer if brands (or even their employer) fail to satisfy. They use Amazon Prime and/or Google Shopping Express, move files at work and home with Dropbox, and have almost cut out their local cable provider via the use of over-the-top (internet) services.
- Global: they are not specific to the West and may, in fact, be more prevalent in nations with higher smartphone adoption. They do, however, expect payment and banking options to extend beyond borders and be seamless. While they are sensitive to extra fees, they are not likely to have started replacing credit cards with purely digital options, such as the bitcoin.
What can organizations do to adapt to and take advantage of this change, if they haven’t already? I have found that while there are certainly differences by vertical and size, most progressive companies are aligning their investments along the following themes:
Source: Centerview Capital enterprise interviews
The following are specific technology areas that support the aforementioned themes and are the focus of increased investment:
Source: Centerview Capital enterprise interviews
Whether choosing retail goods, IT services or even employers, the empowered consumer is firmly in the driver seat. Enterprises have to view their customers and their employees in a new light. As Stephen Denning states in this Forbes blog, “globalization and the shift in power in the marketplace from seller to buyer have put the customer in charge”.
Companies should take heed and tailor their investments and services – not just to play catch-up, but to make serving the empowered consumer an opportunity to get ahead of the competition.
Author: Sandhya Venkatachalam is a co-founding partner of Centerview Capital Technology.
Image: A zoomed image of a computer monitor shows a website selling button clipart for online shops in Vienna November 27, 2013. REUTERS/Heinz-Peter Bader