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How digital consumer empowerment changed the way we buy

Consumers are empowered through digital networks. How should businesses react?
Written by Charlie Osborne, Contributing Writer

The Western, modern business has changed radically over the past decade. Customers no longer have to rely on brick-and-mortar business outlets, and are more connected than ever through digital networks.

Mobile technology is quickly overtaking traditional purchase channels. Businesses are adopting mobile devices and digital technology not only to make their enterprise more efficient, but also in order to connect effectively with customers. It may not have been possible thirty years ago for a business to stay float using purely digital methods --- but now online services have taken root, competition has increased and there is greater choice for the average customer.

But what is the "average customer" now, and how can businesses connect with them?

Technology's basic aim is to improve processes and systems, and make them more efficient. For enterprises, this may mean the possibility of improving customer services, expanding a customer base, and enhancing manufacturing and business networks.

The Internet allows businesses to maintain real-time communication with their customers. It can be used to mine a vast amount of data which can be used to hone and refine a service or product -- improving profitability and potentially a company's reputation.

This is where "big data" comes in. From demographics to product purchase patterns and trends in consumer behaviour, big data can be used to analyse the vast amounts of information now available through digital networks.

Through this, valuable insight into the operation of a business is possible -- and reactive changes in a product or service based on the consumer market can be changed into predictive action. This kind of immediacy, born from being able to predict consumer patterns and expose market niches, is becoming increasingly important to stay ahead of the game and keep a competitive edge in the global marketplace.

For the consumer, the Internet and mobile technology allows for better connectivity and transparency. From being able to exchange reviews and recommendations through social networks, or spread dissention among peers against an "unacceptable" business practice or product, the next generation of consumers hold more power than they used to.

This 'empowered consumer' is able to quickly tap into global commerce. No longer reliant on local markets, they are able to quickly compare services and products, draw up peer reviews, and find recommendations that are not limited to immediate friends and family.

The physical and digital are no longer completely separate. If a review found online is negative, a customer can choose not to sign up for a service, or avoid a physical and digital outlet altogether. Some businesses have keyed in to the role social networks play --- including companies like C&A which has connected Facebook product 'likes' to their hangers in physical stores --- in order to tie these spheres closer together.

Social networking and online opinion, however, can be considered a double-edged sword. Businesses that gain the approval of consumers can benefit -- for example, Sainsbury's Tiger Loaf customer service -- or, in some cases, a single negative customer experience can become an issue of global censure and a public relations nightmare.

An example of the latter is United Airlines, when one customer's guitar was damaged during a flight. After spending a year trying to claim compensation, the disgruntled musician took to uploading a musical parody on YouTube that racked up more than 12 million views and a book deal.

When a single customer has the opportunity to vent their frustration on a global platform in this manner, businesses need to begin to listen to their customers -– to avoid such PR disasters in the future.

The 'average consumer' has this kind of empowerment; something a customer 30 years ago did not.

Not only does social media offer the chance for global censure or approval at the click of a button, but the Internet itself has become an outlet for innovation and competition, something which in itself online networks now enforce if businesses wish to stay ahead of the competition. The concept of customer loyalty has changed -- with increased business rivalry and easily accessible purchase channels, customers can pick and choose their product or service with minimal hassle.

Combine this with the ability to approve or censure a company with the click of a button, and you are left with the necessity of turning businesses into more consumer-focused models.

The modern business needs to consider the implications of this shift in power. Not only does the modern day consumer have more choice, but there is also a higher expectancy of businesses than before. Transparency and immediate real-time communication has been promoted through mobile technology, and competing businesses have raised the bar on consumer expectations.

The 'average consumer' is a myth. In order to stay ahead of the game, the modern-day business has to use digital technology not only to stay connect to customers, but to capitalize on the vast amounts of data available to stay ahead of the competition.

Image credit: CNET

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