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Digital technologies rapidly bring end to business as usual at consumer-facing firms
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MOBILE applications are a ubiquitous part of our current digital age. In fact, for many they are an indispensable part of everyday life. We use them to shop, to order takeaway food and to book taxis, among myriad other functions.
However, it isn’t just consumer habits that have been fundamentally transformed by these apps; they also have an impact on how businesses market their products and services.
This was a key topic addressed at the 38th ISMS Marketing Science Conference held recently in Shanghai. Organized by Fudan University’s School of Management, the conference was attended by some 800 people from over 330 universities and research institutes around the world.
Among the attendees was Vicki Morwitz, professor of business leadership and marketing at New York University’s Stern School of Business. She observed that in this mobile-interconnected world consumers expect much quicker feedback and responses from firms.
In the past, individual observations about product quality might not have been taken seriously by firms, and complaints didn’t necessarily add up to a publicity crisis.
Thanks to the popularity of mobile apps and social media though, disgruntled consumers can easily share their unpleasant experience about “flawed product or a cancelled flight.” These complaints tend to amplify each other as the message goes viral on social media, said Morwitz. The co-editor of the Journal of Consumer Research, a leading business and management periodical, added that consumers are now more empowered in the marketplace, a development that encourages firms to become more responsive and engaged.
“Firms need to have very active customer service, and departments need to be very engaged with social media,” Morwitz argued.
In her view, the seismic shifts brought about by mobile technology have led to the complete up-ending of traditional business models.
Instead of only buying goods available in the local market, consumers are “intimately getting involved in the production and marketing of goods.”
“Something that was always on the side of business is now in some cases moving to the side of the consumer,” she noted.
One prime example is the trend toward customized products that a growing number of companies are making based on consumers’ specific needs and tastes. For instance, consumers have long been able to custom-order sneakers and other clothing items online, as well as more sophisticated products like cars and computers.
“We are seeing in the US that consumers are making investments in small start-ups for whom they would like the products to succeed,” Morwitz told a panel discussion which she helped to moderate.
Using various crowd funding tools, consumers pool money to help companies make the products they would like to see in the marketplace.
This responsiveness is taken a step further as some companies invite customers to design advertisements that will be shown on TV, thereby opening up a decision-making process previously denied to outsiders. There are even firms in the West which allow consumers to have a say in the pricing of certain goods.
Since pricing is “very risky for a firm to turn over to consumers,” this suggests how fast the tables have turned in the sphere of digital marketing, where firms are desperate to engage and retain consumers, even at the cost of overhauling their own operations.
“Firms that are very successful in marketing do that by satisfying the needs of their customers, and maybe the best way to satisfy the needs of customers is to turn a little bit of decision making over to the customers, whilst minimizing the risks to themselves of doing so,” said Morwitz.
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