Ezra is 25 and a millennial. He’s single, college educated and working as an analyst in a wall street financial services firm. A child of the internet era, Ezra lives his life on the smartphone. As a consumer, Ezra is starkly different from his parents’ generation or even those who came of age a decade earlier than him. He prefers to consume “experiences” as against accumulating possessions. For big-ticket assets like a house or even a car, his preferred option is rent, not buy. While Ezra is in a steady relationship, marriage or starting a family is not a priority for him, he sees those a good ten years on.
Ezra is by no means unique. According to a recent Deloitte report, consumers like him are no longer passive recipients of marketing and retailer-designed buying processes. In developed markets, at least 70% of consumers now lead their own shopping journeys. This new age consumer searches for products and services in online marketplaces and search engines (as against using retailer websites), browses the catalog from his shortlist, relies on online peer reviews for selections and pays using a digital wallet.
Interestingly, consumers like Ezra take this behavior to their workplaces as well. Hence, corporates are also slowly becoming more cost-conscious and consumption-conscious with respect to non-essential purchases. Once you start buying fewer and lower-priced products, that behavior lingers on even when the economy improves.
Klaus Schwab, Founder and executive chairman of the World Economic Forum, said he believes we are experiencing the fourth industrial revolution which will fundamentally change the way we live, work and relate to one another. This is a revolution at the trijunction of millennial consumer behavior, democratized digital technologies, and global-scale new age networks that is blurring the lines between physical, digital and biological spheres.
Ezra and his generation of new age consumers are powered by digital technologies that have gone mainstream. Not for him, the traditional one-way information flows from brands to consumers; he prefers hundreds of digital micro-conversations in multiple directions and in a many-to-many format, breaking down access barriers and simplistic pre-defined customer service paths. Crucially, Ezra believes in being heard and in being a significant influencer of business processes, products and experiences as opposed to being just the last link of a forward supply chain.
Thanks to these shifts, getting customer journeys right have become far more vital for brands than focusing on push-based supply chain and inventory efficiencies. Beyond engaged consumers like Ezra, suppliers and partners (e.g., truck drivers and delivery personnel) have also become crucial sources related to product and process improvements for retailers and CPG companies.
The shift to digital life has coincided with the rise of Platform Economy. New age Network Orchestrators are crossing traditional industry and geography boundaries, rendering established ways of looking at the market obsolete. Powered by vast amounts of data, they operate with a single-minded focus on customer experience working with extremely asset-light models. This has enabled them to capture large chunks of the market in a classic “winner-takes-most” model — as seen from transaction platforms like Apple Pay and PayPal, to marketplaces like Amazon and eBay, to social platforms like Facebook and LinkedIn to other industry disruptors like Uber, Airbnb and Huffington Post. They have also spawned unique collaborations with category leaders, logistics players, autonomous payment gateway systems, advanced cloud computing firms and online marketing service agencies, thus creating a very dynamic and volatile ecosystem.
Let’s get back to Ezra. In an always-on world, Ezra needs to have continuous conversations with your organization (your employees, in turn, should be able to do that with your partners as well). If Ezra complains about faulty packaging or a cumbersome in-store return process, that’s an opportunity for improving a product and/or process.
If you’re a product company or a retailer, why should he engage with you? We recommend evolving along three core axes. First, you need to be “experience-led” to let Ezra find things he’s looking for quickly via simple, easy-to-use, high-performance front-end touchpoints. The second would be “high velocity”. Ezra demands real-time or near real-time responses, so traditional ways of “electronic, but offline” working needs to be rewired around speed and responsiveness. The final axis would be “global scale”. Once the user engagement is in place, you can look at building capabilities to scale globally in a non-linear fashion without relying on the traditional levers of labor and capital.
We believe that any organization not focused on these three axes would be a ripe target for disruption. A niche platform player may be sniffing at your heels completely reimagining the way you’ve always performed a specific function, anything from order fulfillment and marketing campaigns to supplier relationships, warranty management and even employment contracts. And when Ezra walks the “path-to-purchase” to upgrading to a smart TV or subscribing to his grocery staples, you need to be right there offering experience, velocity and scale to grab that one and only chance you’ll be given.