Study: Influence replacing affluence as primary marketing driver
U.S. consumers today want products that are personalized, embody their ethics and values, and are authentic — propositions that all require better data collection, according to a new report from global management consulting firm A.T. Kearney emailed to Retail Dive.
It’s a transformation of consumerism from one affected mostly by affluence (the traditional approach to growing markets and establishing consumer social status based on mass production, distribution and media models) to one affected more by influence (the ability to instantly move markets through the amplification and reach of an individual voice or a community of voices), according to the report.
Retailers must find ways to access customer data, redefine scale in ways that allow them to profitably offer individualized products, understand how critical trust is to growing a brand and foster a workplace environment that incentivizes innovation, A.T. Kearney said.
This latest report is part of A.T. Kearney's ongoing effort to anticipate what the American consumer goods and retail markets will look like in 2026.
"The revolution we are describing in this report is driven by three factors: massive demographic and psychographic change, a significant recalibration of consumer values and today’s hyper-connectivity," Greg Portell, A.T. Kearney Consumer & Retail Practice leader for the Americas and co-author of the study, said in a statement emailed to Retail Dive. "Some might see these as three horsemen of the so-called Retail Apocalypse, but they aren’t a threat to business unless, of course, they are joined by that deadly fourth rider — corporate complacency."
A.T. Kearney is discovering what amounts to “a series of paradoxes” that companies must resolve. One such paradox involves consumers’ desire for highly personalized products that embody their ethics and values, and are authentic. That’s a complicated proposition, considering that the same consumers who want personalized attention and products are also reluctant to share the data that would help shape them. And none of this comes cheap.
“The fragmentation of consumer demand, combined with the potentially high costs associated with customization and personalization, means manufacturers and retailers face a higher penalty for being wrong,” Portell said.
The “Influence Model,” by contrast to the traditional approach, “sees market development in terms of one person’s ability to create change and build community by influencing her or his peers, retailers, CPG manufacturers, the media, and governments,” according to the report. “Influencers rely on social media and social networks to amplify the power of their voices, facilitating the formation of ad hoc coalitions to address a variety of causes. Under the Influence Model, she or he who can enact the greatest behavioral change wins, regardless of his or her financial position.”
The changes are driven by technological and demographic changes an American population that A.T. Kearney describes as “bigger, older, less traditional, more diverse, more urban and certainly more unequal than at any other point in history.” That has helped drive up Americans' growing prioritization of "experience" when it comes to consumption; it's a shift from critiquing based on "value" to critiquing based on "values," according to the research.
The natural fragmentation of American consumers that has always existed is now presenting a challenge for marketers because, from the retail and manufacturing view, the commonalities enabled them to create mass approaches. But that’s more or less out the window, thanks to attitudes shaped by social media, the Great Recession, and the opportunities that social media gives consumers to advocate for their values and their desire for authenticity, according to the report. As a result, marketers will have to conquer markets one segment at a time.
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