The New Consumer: 2010 and Beyond

by Joey Tamer

www.joeytamer.com

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.


Joey Tamer refines the vision, strategy and success of companies -- 
Fortune 1000, capitalized start-ups and investment funds.

www.joeytamer.com    (310) 245 5310   joey @ joeytamer.com