Silicon Alley Reporter, #22
Digital Coast Reporter, #5
Let's take the long view. Consumers
are changing. The early adopter who currently uses the Internet will be replaced
in 10 years by a more sophisticated user, particularly the children of today
grown to the young adults of tomorrow. These sophisticated users will be educated
consumers with the power to control the price they will pay, the service they
will demand, and the purchasing experience they expect. Yes, it is important
for us to understand this year's target market, to make our numbers, to establish
standards and grow our market share. But this is a very early moment in the
evolution of the Internet market.
This early moment: 10 years to go. For all the hype and activity we experience
in our niche, our niche is a small segment of the larger consumer market.
Most emerging technologies (and their products and services) take seven years
to become established in their innovator and early adopter markets, and another
seven years to hit the height of the mass market. Fifteen years from release
1.0 of whatever to critical mass in the mass market-- with the required price
point, consumer awareness, broad-based distribution, ease of use and proven
demand. Revisit the histories of VCRs, ATMs, fax machines, cell phones, and
so on.
Although the Internet has been around for decades in the government, significant
penetration beyond academicians and researchers began no more than three years
ago. We can consider ourselves in Year 3 of the arc, leaving 10-12 years before
ubiquitous use (like use of the telephone or television) is common.
Gary Gablehouse of Fairfield
Research says, "Technology companies have a technocentricism that
limits their impact on the consumer. Technology executives often believe they
can change what consumers want as quickly as the technology base changes.
That is a mistake, generally, since consumer markets tend to change glacially
with regard to their purchase decision models--and what they want. "
Conditions changing the coming market. Four conditions are currently at work
changing the coming market we will see over the next decade. These include
intelligent agents, community and branding, relationship marketing and cross-media
programming. The effect of these conditions coupled with our moment in the
market and the high usage of the Internet by children and teenagers will combine
to create our new market.
Intelligent agents
Intelligent agents, as Jason McCabe
Calacanis says [Silicon Alley Daily, December 23, 1998] "makes shopping
quicker and easier for users to make the right decision." They allow
us to compare value and price and availability, research our decisions quickly,
and make informed decisions. The informed consumer is a powerful force. And
the Internet shopper is price conscious. The power of the consumer to set
his price and to negotiate from strength will change the offerings of products
and services.
Relationship marketing
Relationship marketing, which creates
a feedback loop between the site and the customer sends a clear message: listen,
respond or lose. The attitude of Amazon is clear: if it doesn't make the customer
experience better, we don't need it. That's what experience report cards on
the Internet are about: the whole experience. New users to the Internet, particularly
grown-up ones, might be hesitant or respectful, but not for long. And the
young ones are demanding. Rightfully, they want what they want when they want
it. This force will change the market as well: users will demand the quality
of experience they require, or click elsewhere to find it, spreading both
good reports and bad among fellow-users at the speed of light.
Branding Communities will use brands and become their own brands, creating
trust among its users, and providing good experience and service which will
help to off-set the price sensitivity of that community. Consider the excellent
branding and service of iVillage and Amazon. This is traditional branding
in all its glory: become the trusted resource of your target market (your
community), then expand your offerings.
Cross-media programming
The cross-media programming now
in development at Noggin (a joint venture between Nickelodeon and Children's
Television Workshop) may create new behaviors in young children. Developed
to drive school children back and forth between their computer and their television
(between their active and their passive experiences), some newly integrated
behaviors can become consumer practices as these children learn to choose
and buy. When they have their own credit cards, and the television and the
computer have become integrated, behavior and technology will merge. We will
see a different kind of media-conscious consumer, accustomed to the pitch
in passive mode (TV commercials) and to the search via intelligent agents
in the active mode. Hence, an educated, empowered consumer.
These forces are unique. Their synergy is powerful and far-reaching. It is
important, early in the evolution of this industry, to anticipate the new
consumers, their behaviors and demands.