At the recent EDGE Alumni breakfast, hosted by ARN, the leading voice in customer centricity and digital transformation, Nancy Rademaker, spoke about how the changing profile of consumers – their changing tastes, behaviours and attitudes – is disrupting incumbent businesses.
“Customer characteristics have changed,” Rademaker said, as she outlined the acronym C.U.S.T.O.M.E.R, which highlights eight shifts in consumer perception and behaviour that businesses need to adapt to in order to retain their competitive edge.
U is for “Urban”
By 2035, it is expected 80 per cent of the population will live in cities. That is going to change how we approach business, and who we do business with, Rademaker said.
“Not only will we be virtually much more connected, but we will be physically much more connected,” she said. “This will lead to a bigger potential and demand for a collaborative or sharing economy, and the priority for people will shift from owning stuff to having access to it.”
The greater concentration of people within urban areas means that a critical mass will be reached where businesses can rely on consumers to sustain themselves. For example, there’s the recent phenomenon of bike and car sharing businesses, where consumers don’t own a vehicle themselves but instead belong to a “club” from which they can borrow a vehicle that is located nearby, use it to reach their destination, and then leave it there for another member of the “club” to use.
This can only work when the population density is such that there will be demand for bike or car use throughout the city and suburbs and there’s no need to physically return the vehicle after use (or have somebody pick it up).
Rademaker said this dynamic will remove the “middle man” from transactions. Technology platforms will be central to the trend. She pointed to the Lending Club in the US as an example of financial institutions being removed from the equation; now people can lend and borrow money directly from one another over a technology-based platform.
There is a clear implication for the channel here. Technology partners that are able to build and maintain platforms, rather than execute transactions, will be well placed to capitalise on the opportunities coming from more concentrated urbanisation.
Read on for more insights from the EDGE Alumni breakfast, as we move to the “S” in C.U.S.T.O.M.E.R and talk about customers becoming more self-centred.