Trends – 2
Marketplaces and Influencers: The physical world has malls, the online world has marketplaces. Both serve the same function: aggregate buyers and sellers together, making discovery and shopping easier. Marketplaces like Flipkart and Amazon make it possible for sellers to reach customers anywhere in India or even the world. Their one-stop shopping formula has made them the starting point for any and every product that consumers desire. This drives the flywheel: more buyers means more sellers which in turn attracts more buyers. The power and clout of marketplaces is also leading some sellers to consider alternative go-to-market strategies: setting up their own direct-to-consumer properties (website, apps) and leveraging the growing community of influencers on social media platforms like Instagram to reach potential buyers. Influencers with large follower bases now have the clout to drive sales of niche products as profitably as the large marketplaces.
Rise of Phygital: A new word in every seller’s lexicon is “phygital” – the marriage of physical and digital. This is happening on multiple tracks. First, D2C brands are now realising they need a Main Street presence since a majority of spending is still taking place in the non-digital world and they need the enhanced brand building that the visibility of touch-and-feel stores provides. Second, the offline brands are also going digital to ensure a reach beyond the local footprint a store provides. Third, many products are bought through intermediaries who persuade end customers. The intermediaries have the relationships and are now being digitally empowered with real-time data and guidance to become more effective in the endgame.
Even as CxOs grapple with all these changes in the competitive landscape around them, there are two additional trends which have a big impact on their actions.
Attention Recession: In a book (The Soul of the New Consumer) published two decades ago, David Lewis wrote about the three scarcities motivating the new consumer: the lack of time, attention, and trust. Of these, the lack of attention is becoming even bigger and getting compounded by the communications being sent by brands – customers are being trained to ignore brand messages. Attention is upstream of engagement, which is upstream of transactions. Without attention, there is no sales. CxOs need to worry about attention recession and need a solution.
Talent Crunch: With ever business going digital, the demand for talent has skyrocketed. Tenures at companies, especially in tech and marketing, are becoming shorter. This is happening even as martech solutions proliferate. The talent crunch will force founders and CEOs to become smarter about the way they do their business – trust machines more to do the job, and rely on agencies rather than just internal staff. The new age martech agency will be more of a “progency” (product-led agency) which will blend cutting-edge martech platforms with creative talent to deliver specific outcomes on retention and growth – just like the adtech agencies have done on acquisition.
Taken together, these trends are creating a new world for brand-customer engagement. The old is making way for the new, the traditional is giving way to the modern. The relentless forces of innovation unleashed by the Internet continue their “creative destruction” leading to new and better ways to buy and sell. Success in this coming Martech era needs new frameworks and mindsets, starting with segmenting customers into Best-Rest-Test-Next and focusing on the 4 Rs (retention, rewards, reactivation, and referrals).