It’s all about time – not technology, products or services. And it’s certainly not about marketing. And of course it’s about money, too. The operative word here is Customer centricity which is the move away from a seller’s market to a buyer’s market, and then to the individual customer market. The internet allows consumers to interact with companies, and they use digital self-services, give each other advice and become freelancer service providers to businesses.
The “consumer centricity” management principle will spread quickly because it offers advantages to both consumers and businesses. Interactive networking on the value-added side of things increases consumer efficiency on a day-to-day basis and creates profit for the company. Consumers receive personalized offers whenever and wherever they want. They enjoy maximum transparency and individual control when choosing among products and services from all over the world. Mostly though, consumers save on their scarcest resource: time. Companies automate administrative activities and generate more profits: money.
Consumer centricity – the key to success in a network economy
The personalized nature of consumer demand is growing. Being unique yet still seeking acceptance is becoming a personal challenge. If individualization is our destiny, then network technology is our future. The cult of product trend is over; today’s trend is the cult of social media. Social media portals offer new virtual forms of communication and collaboration. This not only transforms recreational behavior, it also transforms consumption habits. Since the advent of private social networks in Web 2.0, social commerce simply represents the natural next step. Retailers follow their customers.
The keys to success for “social shopping” lie in active consumer participation. People giving up their private lives in exchange for personal information began its triumphant march long ago. Despite the fact that Facebook keeps getting caught in the cross-fire of data-privacy activists because they accuse the social network of not being transparent in the way they utilize user information, Facebook still has more than 22 million users in Germany alone.
Free time is turning into productive time
There are still only twenty-four hours in a day, which is a problem for consumers. The trend toward an unstructured daily existence is on the rise, because the individualization that we take for granted in our free time and in our consumption habits is also reaching our work life. The boundaries between work and free time are becoming blurred. People who efficiently manage their day-to-day activities increase their quality of life. This concept also explains the success of mobile shopping. Consumers these days utilize what was once downtime when, for example, waiting for something and take care of their shopping while on the go. This transforms their unproductive time into productive time.
Free time and self-determination also have their price. The constant availability and the “we time” made possible by smartphones and tablet computers, also requires a level of self-control. Being able to go online any time of the day or night has resulted in 35% of Americans taking their smartphones with them to bed in order to catch up on their social media contacts before they get up in the morning. Actively planning some downtime – “me time” – is becoming a necessary luxury. People who lose control of their time become stressed. The robbing of the most important resource – time – that is associated with consumer centricity, triggers mental illness. The result is burnout syndrome. Constant excessive emotional demand has become a widespread occurrence in our emerging networked society.
Data access as a service
“We don’t think of the Kindle Fire as a tablet. We think of it as a service,” says Jeff Bezos, CEO of Amazon, the world’s largest social commerce retailer. This programmatic statement underlines the transformation of consumers’ status from a passive role as consumer, to an active role as partner in co-creating value. Individual customers are shifting to the active center of adding value. Social media turns social relationships into a program, which for companies, makes them predictable.
Traditional corporate culture, which relies on companies themselves to manufacture and sell mass-produced products and which only sees the consumer as a target group, is increasingly losing economic value. In this new network economy, a horizontal cooperation between companies is taking root. The catchword of the day is “co-opetition,” cooperating and competing at the same time. Amazon is a good example of this. For Amazon, which was originally founded as an online bookseller, it was always about having the most effective relationship with the customer; it was only after this was accomplished that disseminating products became important. With consumer centricity as an organization strategy, it was also easy for Amazon to profitably market electronic devices.
An online marketplace was introduced under the “amazon” brand, which organized the customer relationship for independent retailers from a wide variety of sectors. This is how Amazon became the direct competitor of the big bricks-and-mortar electronics stores. In the meantime, Amazon sells its own eBook reader called “Kindle” and a tablet computer called “Kindle Fire.” The retailer has become a producer of consumer electronics, which illustrates how Amazon has never let the topic of consumer centricity out of sight. The hardware also serves as a “service product” for the new Amazon Cloud Drive. This new cloud-computing product allows individuals to store their own music, video and text files. In the future, eBooks will remain on the virtual bookshelf at the most successful social commerce retailer, and individuals will be able to privately “borrow” them. Individual customers count – everywhere in the world.
New added value through consumer centricity
Consumer centricity shortens the value-added chain by using a new social structure. Companies and consumers are aware of their common interests and form a project community. The concept is based on a cooperative approach. Added value is no longer organized from the product side, it is organized from the people side. Consumers become the initiators of production and trade.
“Linking instead of dividing” is the challenge for management. Specialization and silo mentality are losing their economic power in company organizational structures. It is no longer enough to streamline the production and sale of goods and then present the customer with a fait accompli: Consumers want to participate in the discussion and in the decision-making process. The customer-driven mindset will lead to a radical change in the way value-added chains are organized. What will count tomorrow is not who has the most customers, but rather who has the best customers.
Product categories are not what determine success in social commerce; success is determined by active customer relationships. In order to save time, customers provide companies with personal information. Companies use this information to automate their workflow processes. Consumer centricity is a further development in the world of management science – the transition from industrial production to a network economy. Efficiency will no longer be determined by the production cycles of machines, but by knowledge about people’s relationship history and information about people’s needs and wants.
For companies, what will matter in the future is being able to profit from utilizing even more information about individual consumers, because the consumer is gaining power. On the internet, people and companies are on equal terms. Customers inform customers about product quality as well as the quality of a company’s customer support services. The collective discussion increases assurances in the decision-making process when choosing goods or services. The individual customer makes a decision, and then everyone – all over the world – finds out about the decision they made.