Sunday, March 12, 2006

The Power of the Connected Consumer

The Future of CompetitionThe most basic change has been a shift in the role of the consumer—from isolated to connected, from unaware to informed, from passive to active. The impact of the connected, informed and active consumer is manifest in many ways. Let us examine some of them.

  • Information Access
    With access to unprecedented amounts of information, knowledgeable consumers can make more informed decisions.
  • Global View
    Consumers can also access information on businesses, products, technologies, performance, prices and consumer actions and reactions from around the world. Geographical limits on information still exist, but they are eroding fast, changing the rules of business competition.

  • Networking
    Human beings have a natural desire to coalesce around common interests, needs and experiences. The explosion of the Internet and advances in messaging and telephony—the number of mobile phone users is already over one billion—is fueling this desire, creating an unparalleled ease and openness of communication among consumers. Consequently, "thematic consumer communities," in which individuals share ideas and feelings without regard for geographic or social barriers, are revolutionizing emerging markets and transforming established ones. The power of consumer communities comes from their independence from the company.
  • Experimentation
    Consumers can also use the Internet to experiment with and develop products, especially digital ones. The collective genius of software users the world over has similarly enabled the codevelopment of such popular products as the Apache Web server software and the Linux operating system. The diversity of informed consumers around the world creates a wide base of skills, sophistication and interests that any individual can tap into.
  • Activism
    As people learn, they can better discriminate when making choices; and, as they network, they embolden each other to act and speak out. Consumers increasingly provide unsolicited feedback to companies and to each other.
  • Conclusion
    Companies can no longer act autonomously—designing products, developing production processes, crafting marketing messages and controlling sales channels—with little or no interference from consumers. Consumers now seek to exercise their influence in every part of the business system. Armed with new tools and dissatisfied with available choices, consumers want to interact with firms and thereby cocreate value. The use of interaction as a basis for cocreation is at the crux of our emerging reality.
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