The vision of digitization and omnipotence of data stimulates customer fantasies and business ideas, but what kind of impact do they really have?
At first sight, customers can rejoice that they constantly get more and more for paying less, but as the saying indicates "There's no such thing as a free lunch".
So what is really behind business models that constantly need new money injections in order to operate a ruinous price-, service- and communication competition?
How does it actually meet the needs of the consumer who wants to get more and more services for free and if possible even choose from more suppliers for the same product or service?
And the final question to raise should be what about consumers and markets when the bubble bursts and the artificially inflated online trade runs out of investors?
Apocalyptic prophecy: Nothing remains when there was nothing there to begin with
Because of the low access barriers and the current situation on the capital market, as well as the few positive examples that stimulate the fantasies of the masses, the number of competitors has risen dramatically in almost all segments of online commerce. Not to mention that all competitors are just a click away and duel with huge advertising efforts by a market share of less than 20% of the market volume. Of course that’s a frustrating situation, since the expenses are getting higher. That in turn cuts into revenues. Even the consumer feels less and less cared for with the increasingly confusing offers.
Instead of taking care of intelligent research and analysis of the data to really understand the customers, recognize their needs and to increase customer satisfaction on a lasting basis, online providers often rely on outworn concepts.
Despite the enormous amount of data, online retailers often run out of steam from a creative point of view and do not recognize the customer behind the click. In fact, some do not know anything about the person they want to market their products to and are therefore always one click too late. They didn’t look into the customers’ eyes yet, therefore can’t assess their emotions and feelings. In other words, they have no empathy!
Mediocracy: There is no space for it in trade either
Unfortunately, we focus far too often on the weaknesses than on the talents and that way rather promote the mediocre than innovation. Anyone who only adapts to the market and neglects his own strengths won’t be successful in the long run. This is the biggest mistake that established traders in particular could make today. I mean neglecting their position, for instance, in the brick and mortar sales business, in order to play their part in the ruinous online competition. In reality, many traders are probably so much closer to their customers than the data-driven online purists. The challenge is to maintain the position and to continue pushing the existing strengths.
It is about perfecting proximity to customers instead of becoming the next player in a game that might not have a winner at all. Because one thing is clear: when too many players have to share the same market, who will manage to survive? The legend of the ‘longtail’ that provides an opportunity to everyone seems to have in the end mainly losers. And let’s be honest, many who look like winners are in fact already long on the losing track and often just artificially kept in the game by ever new money injections.
Therefore, focus on what has made people and businesses successful for generations. Stay empathic and find out what is really moving your customers. Whether with big data or smart processes: whoever really wants to be close to the customer has to be down-to-earth. Anyone who sees himself as a high-flyer loses first the proximity to the customer and then the fuel for the success.
By Daniela La Marca