What if supply should now structure demand ?
To become a household name, a cross-cultural and cross-generation icon like Levi’s and Converse twenty years ago, and like Apple these past ten years. Such is the objective that retailers and brands must now set themselves. Such is the key to their long-term success, with ever-more abundant, changing and elusive consumer profiles.
With the ever-increasing presence of online commerce, itself leading to a multiplication of e-commerce actors and the over-abundance of product offers, in just a few years Internet has created a vast quantity of small niches offering experiences and services to a finely tuned target of consumers, meeting their increasingly specific needs. This splitting up of the offer has generated more complex consumer types that have, in turn, jeopardised traditional consumer targeting techniques applied by brands and retailers these past thirty years.
Multi-faceted consumers
Nowadays, a same individual can shop for groceries at Lidl, invest in a sound system and television from Bang & Olufsen, buy trousers from H&M and running shoes from Nike. As such, building up a typical consumer profile no longer comes down to the inherent characteristics of the person, such as age, gender or social status, but rather to the relationship with a given service or product, be it on a regular or one-off basis. However essential it may be, a product that does not spark the interest of consumers will only receive summary investment on their part, both in terms of time and money. Conversely, the bigger the enthusiasm of consumers for a product, or at least the category it belongs to, the more they will invest in it and, above all, the more demanding they will be throughout all the key stages of the purchasing act.
Consumers have become multi-faceted beings. They can be passionate, indifferent, demanding, accommodating, big-spenders, or bargain-hunters, regardless of their socio-professional category. Traditional consumer targets have moved over to make space for new consumer types, which are as numerous as they are elusive and short-lived. Moving targets, in short. The very worst nightmare of any self-respecting marketer! In such a context, how is it possible to build up a relevant product offer? The answer can be found in data and in the product/consumer co-evolution it enables.
Data as an offer design tool
From now on, collecting and analysing consumer data will not only facilitate client acquisition and loyalty. It will also be used to design offers. Some retailers have already understood this. As a pioneer in the field, Decathlon has been able to create and upgrade its products, no longer based on fixed and watertight archetypes (the sports enthusiast vs the fair-weather runner, the mountain biker vs the road cyclist etc.), but rather based on an in-depth knowledge of these new niches, both cross-disciplinary in terms of historical types of consumers, and ultra-specific in terms of client expectations that, up until then, had not been recognised by the market.
Real-time customisation of the product offer must enable all consumers to find their ideal product or, at the very least, the product that best meets the need they have at a given time.
Nonetheless, faced with an ever-increasing number of competitor offers that are also ever-more customised, relying only on consumer/product co-evolution is necessary but insufficient to emerge as no. 1 over the long term.
A strong brand identity to structure the market
This is why retailers now have everything to gain by structuring their offer to re-establish reference products and direct consumers through the myriad offers on the market. To this end, one of the keys is the very identity of the product, maybe even the brand itself: in almost every sector, there are players that set the pace, structure the market through their strong, and therefore dividing, identity. Paradoxically, it is this division that will make brands and retailers an integral part of a culture common to all. We would, for instance, be hard-pushed to find someone who does not have a strong opinion about Birkenstocks or Stan Smiths. Whether we love them or hate them, these shoe brands structure the mind mapping of each and every one of us. They are living proof that, to become iconic and desirable to the multi-faceted consumers of today, a brand must contribute to building the identity of everyone, regardless of their gender, age and social status.
In these times of deep retail mutation, retailers and brands are facing a total paradox, since their success resides in both the very small and the very big, in micro-targeting and cross-disciplinarity, in division and universality.
By Nathan Stern, President of Altavia ShopperMind