Power at last

[pricescope]

Great article in Economist: Power at last (Mar 31st 2005)

Armed with the internet, the customer has finally got on top

...

As our survey in this issue shows, consumer power has profound implications for companies, because it is changing the way the world shops. Many firms already claim to be “customer-driven” or “consumer-centric”. Now their claims will be tested as never before. Trading on shoppers' ignorance will no longer be possible: people will know—and soon tell others, even those without the internet—that prices in the next town are cheaper or that certain goods are inferior. The internet is working wonders in raising standards. Good and honest firms should benefit most.

... People can ... read what companies say about products in far greater detail, but also how that tallies with the opinions of others, and—most importantly of all—discover what previous buyers have to say. Newsgroups and websites constantly review products and services..

...

This is changing the nature of consumer decisions. Until recently, consumers usually learned about a product and made their choice at the same time. People would often visit a department store or dealership to seek advice from a salesman, look at his recommendations and then buy. Now, for many, each of these steps is separate. For instance, Ford is finding that eight out of ten of its customers have already used the internet to decide what car they want to buy—and what they are willing to pay—even before they arrive at a showroom.

....

Many firms do not yet seem aware of the revolutionary implications of newly empowered consumers. Too many companies relaxed after the bursting of the dotcom bubble, assuming that the online threat had faded. This was a mistake. It is true that the vast majority of people still go to shops for most purchases (though online sales continue to grow). Before doing that, however, most have used the internet. More than 90% of people aged between 18 and 54 told America's Online Publishers Association in a survey that they would turn to the internet first for product information. The differences between the virtual and the bricks-and-mortar worlds do not worry consumers. But they should worry companies. Many consumers first encounter a firm through its website, and yet for too many firms, their online presence remains a low priority.

...

...consumer's choice is about to become even greater. Internet search firms such as Google, Yahoo! and MSN are now falling over each other to offer more localised services. These promise to open up a new goldmine in search advertising. And soon this facility will be available not just on PCs at home or work, but on mobile phones. At a touch, consumers will be able to find a local store and then check the offers from nearby outlets even as they browse the aisles, or listen to a salesman. When that happens consumers will truly be kings, and only those firms ready and able to serve these new monarchs will survive.

 

[valeria101]

Aww... Leonid!

lazy reader me I thought this is YOUR article and the poll you were running last week

When are we going to see thouse out of the box ?

 

[Garry H (Cut Nut)]

Leonids link to the SURVEY (above http://www.economist.com/displaystory.cfm?story_id=3785166) is the first of several articles on the theme - the rest are paid links - but for a few dollars anyone interested in the topic should go buy the Economist.
(actually any thinking person should read it all the time - especially if you live in America - so you know what is really happening according to the sarcastic and hard nosed Scots)



here is a pearl:
“Who actually controls distribution in this type of world?” asks Bill Gossman. “The individual does. That''s where the ultimate consumer power comes from.”

and another:
The less control a company has over its marketing message, the greater its credibility, says Pamela Talbot, an expert in consumer-product marketing and chief executive of the American side of Edelman, a giant public-relations firm. Indeed, Saatchi & Saatchi''s Mr Roberts thinks marketing departments must accept that brands no longer belong to them, but to the people who use them. The most valuable users of a company''s brand are what he describes as “inspirational consumers”—people who are closely associated with a company and its products.


There are now more than 2.1M brands and growing at 400-700 a day!