Posts Tagged ‘Consumer behavior’

Growth from consumer change: a developed-market perspective

In a recent research report, entitled “Energizing Global Growth: Understanding the Changing Consumer”, Accenture’s Institute for High Performance looked at consumer behaviour, and what companies could do to achieve higher growth, both for themselves and the wider economy. This piece builds on a previous article that set out the nature of the problem – low growth in developed-market economies and the corresponding drop-off in consumer spending. In this article we explore the nature of consumer change itself, and what some leading companies have done to generate growth.

The past decade has witnessed a huge technological revolution, precipitating the mass adoption of consumer technologies. The proportion of the world’s population using the internet quadrupled from 2001 to 2011. The use of consumer technologies in the consumption process has been seized upon by businesses. E-commerce, m-commerce, and social media all play an important role in the strategies of most consumer-facing companies, and many new entrants have built successful business models on just one strand of this.

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Over developed? Consumer change in developed economies

Mired in a period of low growth, developed economies are becoming increasingly tough places to do business. But while the overall size of markets may be stagnant – or even shrinking – individual consumers are not standing still. Behaviour change offers a significant growth opportunity for businesses at the forefront of consumer understanding.

These are testing times for business leaders in developed markets. 2008’s Great Recession ushered in a period characterised by narrowly-averted crises – most recently fiscal cliffs and Eurozone break-ups – and on-going uncertainty. The prevailing mood seems to be one of “cautious optimism”, but businesses still seem to be walking a tightrope towards growth.

The economic outlook for many developed markets will do little to whet the appetite of business leaders: fewer than half the OECD economies are expected to grow by more than 1 percent in 2013. Unsurprisingly, consumer-facing companies in these economies are troubled. The downturn has eroded lines of consumer credit that were integral in spurring prior growth. As such, consumer expenditure has struggled to regain prior highs, only recently doing so in the US and Germany, with levels in the UK still down on 2007’s peak. In Southern Europe, the situation is worse. Absolute growth in private consumption between 2010 and 2020 is forecast to be higher in Sudan than Italy, and higher in Chad than Spain.

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9 reasons not to do analytics

Analytics gets a lot of attention. Apparently there are still some organizations out there that haven’t seen the light. A recent survey into the use of Analytics in the Dutch market (Dutch Analytics Survey) indicates that indeed there is still a lot to gain. But maybe we should stop giving so much attention to Analytics. Organizations who haven’t embarked on that journey yet, probably have good reasons for it.

  1. “Analytics is just another word for Business Intelligence’.”
    Business Intelligence is about understanding which were the relevant factors that lead to turnover and profit for example. Analytics is forward looking and provides insights on what results you can expect when choosing different scenarios. Of course, if you think that driving a car by looking only in the rear view mirror and not also looking through your windshield provides the same kind of experience and direction, then you probably would conclude that Analytics and Business Intelligence are the same thing.
  2. “Analytics is a hype. In a few years nobody is talking about it anymore.”
    Absolutely! Why do you want to look ahead? The world is not dynamic and unpredictable. If you want to understand what lies ahead, just look at past results! There is no such thing as new developments: the world has not changed in the past twenty years. Read more…

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Employ Digital as a Competitive Weapon in Insurance

Competitively speaking, social and digital media matters like never before. Shoppers expect to learn online about the carriers, compare products, obtain price quotes and purchase a policy quickly and easily.Visionary agents and insurers know they need to make a real shift now as part of a modern agenda to support high performance.

Similar to consumer behavior already widely observed in other industries i.e. Finance and Retail, rather than replacing one channel with another, many insurance consumers are diversifying and using more channels than ever to meet the demands and needs of today’s consumers. Of the consumers looking to buy insurance, many are incorporating digital channels as part of their buying process.

Although many consumers ultimately buy insurance from a human (either a local agent or a contact center associate), numerous studies have shown consumers research online prior to making their purchases. Recent research by JD Power showed that 54% of auto insurance shoppers report getting their quote online. Therefore insurers and agents unwilling, or unable, to integrate and engage will effectively lose relevance and ultimately miss out on growth opportunities.

Two major trends suggest that business as usual is no longer viable: 1) the growing number of online shoppers, 2) and the increasingly intense competition from direct writers.

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Changing the face of Insurance

In my previous blog post titled ‘Insurers’ need for Consumer-Focused Innovation’ I discussed that traditionally conservative insurers are having to come to terms with two powerful, inter-related trends: ‘Changes in consumer attitudes, perceptions & behavior regarding insurance’ and ‘The rapid emergence & adoption of new technologies which affect insurance’. Together these are forcing insurers to develop new approaches to growth – in particular, to customer acquisition & retention.

Recently the second part of Accenture’s Consumer-Driven Innovation Insurance Survey 2011 was conducted and confirms that many insurers are already experiencing that loyalty has weakened, expectations have risen, and growing numbers of customers expect to switch provider to find what they are looking for.

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The new social world of Brands

Interactive new media offer new opportunities to interact with consumers. Considering the importance of these interactions, communications taking place within this new digital space can have an important effect on the perceived brand personality. Research I am currently conducting as part of my MBA program focuses on defining important elements within interactive, social media that can contribute to the formation of brand personality and investigating those relationships.

Please help in the completion of the research by completing the survey: tinyurl.com/crossmediambathesis.

Transformation of engagement
When Howard Schultz returned to the CEO position at Starbucks in 2008, he stated rebuilding trust with the customers was the main priority for the company. At the basis of his approach: social media. “It has become paramount that brands understand that trust isn’t something you build through traditional marketing,” Schultz said. “You do that through integrating social and digital media. It is a science – as well as an art – to understand how to do this in a way that is authentic and genuine, and not just marketing. Because if it’s just marketing, (consumers) will see right through it.”

In recent years, social media has gone past the hype and became mainstream. In the U.S. for example, social networks and blogs now reach close to 80% of active internet users and represent nearly a quarter of total time spend online. Other countries follow closely, with users joining either local heroes and/or the global giants. But social media not only connects people with each other, but also with places they go, media they watch and items they like and buy. This phenomenon has great implications for business. As everybody and everything is connected and exchanges information real-time, organizations get flattened and leadership becomes more transparent. But arguably the biggest impact is that it has changed the old way of doing business forever.

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