Your Next Customer is Old, Poor and Disabled

Last Updated Mar 8, 2010 11:01 AM EST

Emily Green, the CEO of technology industry analyst house Yankee Group has recently published a book on the effects of connectivity on business; 'Anywhere'.

For anyone whose eyes glaze over at the mere mention of technology, this is a useful read, because it explains in simple terms how businesses are likely to be affected as their customer bases embrace connected technology.

The chapter on how connected devices will affect consumers is worth a look even by people who consider themselves digital natives though, as it has some useful insights on how consumer behaviour is likely to change in the coming years:

  • Opportunities to reinvent the wheel: According to Green, much of the world is progressing from general computing devices to items which have a central function that is enhanced by connectivity. Anything from books to kettles can be hooked up to the internet. This gives fantastic opportunities to see how established consumer durables with mature markets can be given a new lease of life by connectivity. However, just connecting a kettle to the internet and expecting the money to roll in is a mistake. Green says this connectivity has to improve on the basic function of the device. Thus, the connected umbrella can tell you what the weather is going to be today, giving you the option not to take it out in the first place if there is no forecast for rain.
  • Product life cycles will grow: According to Green, Microsoft expects the useful life of the Xbox 360 to be 10 years because it's able to receive software upgrades online, even though the life cycle of the typical electronic gadget is not more than a couple of years. If that happens to other connected products, the rate of consumer churn will slow up considerably. Consumer goods manufactures will be forced to concentrate more on the service opportunities offered by their longer-lived.
  • Brand won't carry you against a better connected rival: Or, to put this another way, having a product or service that makes the most of connectivity will allow you to poach customers from a brand leader that thinks it doesn't have to adapt to appeal to more connected customers. Examples like Sony's defeat at the hands of Apple in the music player arena show how consumer loyalty melts away in the face of a product that provides for their needs in much better ways.
  • Connectivity creates new customer bases: The growth of the mobile phone in developing economies and connectivity to the home in mature ones means you can reach shoppers who were previously too expensive to deal with. The poor of Africa, Asia and South America, connected by cheap mobile phones and netbooks will actually have more disposable income because of the increased choice of products made available to them. People who have been denied credit to buy expensive goods because they live hundreds of miles from a bank will be able to get a credit profile through mobile banking. Elderly or disabled citizens in mature markets will become new consumers of specialised goods and services that cater for their inability to get about.
Not everyone is going to rush out to buy a connected kettle. The book segments consumers into different groups according to their likelihood of embracing Anywhere shopping - from the technophobe Analogues, to the super connected Actualised Anywheres. However, even those consumers having difficulty with the technological revolution can be persuaded to buy a connected product or service if the proposition enhances their lives enough, is easy enough to understand and is cheap enough.

(Pic: Nir Nussbaum cc2.0)