The growing power of consumers
The Deloitte Consumer Review
While consumers have always had the ability to vote with their feet or wallets, they now have the power to influence not only what they buy, but what others buy as well.
Empowered by access to more information, social networks and digital devices, consumers are now well equipped to find the right product or service to suit their needs. As a result, we’re seeing a gap emerge between consumers’ expectations and brands’ ability to meet them. The challenge for businesses is how to close this expectations gap when dealing with millions of different consumers, all demanding different things.
Consumers are now both critics and creators
While the digital revolution has handed additional power to the consumer, including more information and more choice, it has also increased the complexity of decision-making. Yet consumers have found ways of dealing with this through tools such as social media or comparison sites to help perfect their choice and exert their power. Our data shows that 81% of people read reviews and check ratings and more than a third of consumers contribute to online forums or blogs.
Who do we trust?
When it comes to trust, many consumers prefer to turn to independent sources rather than go directly to businesses. This presents a real risk for businesses as they have less control over the information being circulated and used by consumers to make decisions.
Empowered consumers are also a significant driver of growth as their behaviour intensifies competition and drives innovation. The ability of like-minded people to compare experiences and promote their collective voice allows the most active consumers to demonstrate the power of the crowd. Some companies are even using crowd-based power to help them develop their products and services.
Push vs pull
With consumers increasingly knowing where to get the information they need, more prefer to ‘pull’ information, rather than have businesses ‘push’ information to them. To counter this, businesses have been engaging with consumers directly via social media platforms. However, in an effort to ‘sanitise’ the content that appears on social platforms about their brands, many businesses have taken some of the negative conversations offline while encouraging people with positive experiences to share them more widely. This can be detrimental to businesses as they run the risk of being removed from the conversations about their brands altogether.
The disrupted path to purchase
Enabled by digital technology and extensive information sources, consumers can choose how engaged they want to be across the different touch points of their path to purchase.
Two additional phases have now been added to the traditional customer journey and have helped to create a cycle, where one consumer’s experience feeds into another consumer’s decision process whether to buy a product or a service.
While in the past consumers could only consider what is on offer, now they can start with an idea or a need and browse online for further inspiration to help refine and locate what they are looking for. Similarly, at the end of the journey, consumers have access to networks and communication tools to share their experience with others who themselves might use this information to select a product or service.
The more we spend, the more we research
Unsurprisingly, our research found correlation between the level of consumer pre-purchase activity and the level of spending. High spending categories such as travel and holidays or major household appliances have higher activity levels, while categories such as clothing and footwear or train tickets show lower activity.