Consumers now have more choice, more information at their fingertips, and more opportunities than ever before to create their own products and services – a trend that distributed manufacturing technologies like 3D printing may well accelerate. The balance of power is switching from producers and companies to users, who have an unprecedented power and ability to force industry-wide changes with few or no resources.
People increasingly expect better, faster and more personalised services. No longer limited by what is available on local store shelves due to ecommerce, they are becoming much more selective about what they want and how they want it. 1
The rapid increase in access to information – mainly due to the internet, and apps or maps that make sense of data – combined with shifts in consumer awareness of concerns for social and environmental health, is also creating a step change in organisational and individual transparency. For consumer brands, no amount of marketing can now overcome a swathe of bad sentiment. In the near future, every aspect of a company’s operations could be in the public eye, and its license to operate therefore in the balance. If consumers lose trust in a product or service, social media has also made it much easier for them to take action against the company and create pressure for change.
New models of interaction enable people and communities to embrace novel ways of achieving the results they want, from crowd funding to peer-to-peer sharing services. This trend could grow and continue to create a new form of consumer economy in which experiences and access to items are more desirable than ownership.
Last updated: 4 December 2015
Consumers as co-creators
- While previous ICT revolutions have enabled consumers to take an ever increasing part in production processes, distributed manufacturing is the ‘last piece of the puzzle’ that enables consumers to intervene at any stage in theproduction process, from the initial idea to the fully manufactured product. 1
- Usage-based insurance (UBI) programs prime examples of ways in which individuals can choose to trade personal data in a transparent market transaction. According to a 2014 survey by SDL, a global customer experience company, about half the consumers in the US, UK and Australia are willing to share personal information with vendors in exchange for loyalty programs and/or product/service incentives. Parents, commercial truckers and individual motorists now have the option to track their driving behavior with vehicle sensors, feeding personal driving profiles that are factored into auto insurance prices from companies such as Progressive. Both parties know more about their risks, and the resulting insurance price is more accurate. 2
- Outside of ICT technologies and market structures enabling co-creation, consumers now can gain innovation, design and prototyping skills more easily at low or no costs. One recent example, amongst many others, is the 100% Open Innovation Toolkit, which is free for all to download and use under a Creative Commons license. It covers the whole open innovation journey, from setting a strategy for collaboration to implementing mutually beneficial business models. 3
Consumers emerging as influencers
- In the span of the last few years, one palm oil trader after another, such as Golden Agri Resources, Wilmar International and Bunge, has committed to helping protect forests. Even though there is still much more work to be done in tackling deforestation, this change is largely due to the efforts of regular people – consumers. According to Glenn Hurwitz, the chair of Forest Heroes, “when college recruiters would go to campuses, hundreds of students came up to them and said, we don’t want to work for Kellogg’s as long as they are in bed with [Singaporean palm-oil giant] Wilmar. We brought people from all over Michigan for a huge rally in front of Kellogg’s headquarters just before negotiations with Wilmar. And that ended up providing crucial leverage. Once Wilmar made its sustainability pledge, other companies rapidly followed suit." 1
- A petition which garnered 250,000 signatures led to the removal of a highly processed, ammonia-rich beef product from school cafeterias across the US. ‘Pink slime’ consists of sub-par beef scraps and connective tissue mixed with ammonia, turning formerly inedible meat into edible ground beef. Having discovered that schools in the US were serving it, Bettina Siegel started a petition to have it removed on the campaign website change.org, which garnered over 250,000 signatures. In just 10 days the product was removed from most school cafeterias nationwide. 2
New consumer economies
- Increasingly, consumers have options to take their energy generation and usage – as well as its environmental impact – in hand. SolarPower Europe has started a dialogue with consumer organisations, demand-side flexibility providers and citizens initiatives to explore how to make solar accessible to all.With the dramatic cost decrease of solar, European households and businesses can control their energy bills by producing their own energy by putting solar panels on their roofs and, in some cases, sell the energy they don’t need and get credit on their monthly bills. 1
- Havas Worldwide, one of the largest integrated marketing communications agencies, reported in a 2014 study that more than a third of Millennials from 29 countries already belonged to a sharing service or expected to join one within the next year. 2
- Collaborative models are also active within the public sector. In the UK, the timebanking platform Spice has remodelled the person–to–person time bank to encourage volunteering in public services in exchange for time credits which can be redeemed from local partners who accept the ‘Spice Network Credits’ – such as a local theatre or babysitting service. 3
- An emergent and growing group of consumers care about the social and environmental footprint of the products and services they consume and this can influence decisions, particularly where the price is comparable. As a result, consumers expect to have access to information to help them make informed decisions. Companies should prepare for a world where society demands absolute transparency from brands. Businesses should use transparency as an opportunity to build trust with all stakeholders — from consumers to communities to activists. However, there is a concern that too much transparency might make it harder to innovate as it might inhibit their competitive edge.
- Consumers can make a difference to carbon emissions by adopting and demanding more sustainable lifestyles. They can adopt new behaviours, lifestyles and purchasing decisions. Examples include avoiding unnecessary short haul flights and being less tolerant about products that damage the environment by using more efficient vehicles and adopting lower carbon impact diets by consuming less meat. Given such a high level of consumer influence, a lack of conscious action by consumers will lead to adverse long-term impact such as a continued exploitation of cheap labour, depletion of global resources and the devastation of ecosystems.
- A new type of economy where end users engage much more actively in product design and production is beginning to emerge. In time co-ideation could dissolve the barriers between companies and consumers altogether, and services and schematics for customisable 3D-printed designs may even begin to take precedence over traditional product sales. Co-ownership, however, also democratises access to information that can be hacked or exploited. This could have major implications for business and government, including from a regulatory or tax perspective.