How Consumer Value has Changed with the Evolvement of Empowered Consumers
A new type of consumer is reshaping the retail industry, with increasing power to access information. This means that consumers will make decisions differently from the way before. They will use technology, such as mobile phones, to make decisions and perform daily tasks. They will also be actively creating and demanding for unique, personalized experiences. Taking a look at the expanded consumer equation allows us to better understand how these empowered consumers will transform the retail industry.
Historically, the consumer equation had three dimensions: cost, choice, and convenience. These three dimensions were added up to evaluate consumer value, which can be defined as the sum of tangible and intangible benefits a consumer receives from a purchase, relative to what the consumer has given up for the purchase. In the traditional equation, each dimension comprises a spectrum of limited options.
Now, this equation has been expanded and become more complicated. Control and experience are additional dimensions that are key to determining the consumer value, and the already existing dimensions of cost, choice, and convenience have evolved to include what today’s consumers expect from their shopping journey.
Evolved cost: The historical cost dimension can be briefly defined on a polarised spectrum. At one end of the spectrum, there is premium pricing, usually for high-end products. At the other end of it is economic pricing for commodity goods. However, a brand-new perspective for today’s consumers is the “effort” involved in using the unprecedented amount of data that they have to compare costs for different retailers and products.
Evolved choice: The choices that consumers make during their shopping journey is dramatically changing in the aspects of product selection, personalization, and related services. Technology is the crucial element for retailers to tailor these choices to individual consumers and reflect personal preferences and experiences.
Evolved convenience: Consumers can now get most of the things in need within a few clicks on their mobile devices, or even just by voice commands using smart home assistants. Instant gratification is now taken for granted by consumers, instead of a good-to-have. Retailers are strongly required to provide a convenient shopping experience throughout the whole consumer journey.
Control: Consumers want control over their shopping journey, and they wish to influence and shape the shopping experience themselves. Many consumers comment on their shopping experience via social media, which will influence the future decisions of the retailers. Through these methods, consumers exert their power to influence the development of the retail industry.
Experience: Consumer experience at all interaction points is one of the most crucial dimensions. Everything ranging from product selection, store layout, shopping environment, and staff interaction will affect consumer experience. Retailers that can deliver a more distinguished and satisfying experience hold a much larger chance to win over their competitors.
Understanding how today’s consumers are changing and providing top consumer experience requires retailers to incorporate new, game-changing technologies. More specifically, the technology that will provide them with the data needed to generate consumer insights and directions for future optimization.
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