Quick, is the consumer more empowered today than, say, 20 years ago?
More, of course. Right?
The consumer as shopper is armed with the mighty mouse. At the click of that mouse, she can call up competitors’ pricing information, and with another click she switches brands, and is gone. Brand loyalty that you spend years earning disappears in a trail of cookies signaling a price promotion by a competitor.
As a group, consumers are even more powerful. They can prevent The Gap from changing its logo, and they can bash and trash brands over Twitter to bend them to their will, and they can band together to get unbelievable deals through Groupon.
That makes consumers pretty powerful, doesn’t it?
But here’s a question: if consumers are so powerful, how come they get treated so poorly?
For example, how is it that companies have off-loaded so much of the tedious work of the last mile to consumers? Consider what companies now expect their time-starved consumers to do:
- Fill their own gas tank, and scan in their own credit card and complete the payment.
- Find all their groceries from giant stores that seem to grow a couple of thousand square feet every year. Put the groceries in a basket, pass them through a checkout and bag them, and drive them home.
- Do their own price checks in-store.
- Do all the data entry required to manage bank accounts; research the best alternative investments and loans; manage their own portfolio.
- Understand and compare mortgages, and pick the best one for the economic and personal circumstances (we all know how that went).
- Arrange their own travel, compare Hotwire, Expedia, Priceline, Hotels.com and so on.
- Print their own boarding passes, check themselves in at the airport
- Walk around a furniture store, write down the stock number of the items they want, go find them in a vast warehouse, carry them to the car, take them home and build them.
- Specify and ‘build’ their own computer on the seller’s website
- Create their own music lists; manage the music lists; synchronize music storage.
- Spend time on the phone speaking to computers and listening to elevator music, waiting to be directed to the right answering machine where they hope (often in vain) to get an answer to their query.
- Inventory and manage the connecting cables, adaptors, and accessories for the products bought.
- Troubleshoot the inevitable compatibility issues between the printer and the computer, the camera and the printer, the wireless router and the smartphone…. And feel free to add more in the comments section.
Does that sound like an empowered consumer to you?
Well, you say, as long as the consumer is willing to do the last mile, and as long as they’re unwilling to pay a premium for the ‘full-serve’ option, businesses are going to do the simple cost-benefit calculation and continue off-loading the last mile.
The problem is not that any one company or industry is off-loading work on to the consumer. The problem is that they’re all doing it at the same time. And each of the tasks off-loaded is independently trivial, but together they spell death by a thousand cuts. A classic example of the tragedy of the commons,
“where unrestricted access to a resource such as a pasture ultimately dooms the resource because of over-exploitation. This occurs because the benefits of exploitation accrue to individuals, while the costs of exploitation are distributed between all those exploiting the resource.”
The resource in question here is, of course, consumers’ time. The number of last miles that can be dumped on the consumer is essentially infinite, but their available time is most definitely finite.
The wake-up call for companies that continue to seek to replace their own headcount with consumer labor will arrive when they inevitably encounter diminishing returns. As consumers’ time availability decreases, they will be much more demanding of the benefits they require in return for giving up even a minute.
Is there a business opportunity here? What can companies do to recognize and avert the tragedy of the commons?
Start with two things.
First, recognize the full cost to the consumer of stuff they buy from you – both the price they pay, and the cost of their time and effort. Often these hidden costs far exceed the dollar price that consumers pay for what they buy from you.
Second, focus your innovation efforts on reducing the time and effort that the consumer spends extracting the benefits they seek from your products. If they consume a product chilled, sell it chilled. If they store it before consuming it, make it easy to store. If they assemble it with other products before they consume it, consider selling it pre-assembled.
In other words, if you really want to empower your consumers, stop fretting so much about what you sell and worry about how your customer buys and consumes. For more on this topic.
This is the first of a two part piece on the myth of the empowered consumer. Read the second part here.