The Expectation Economy…
The EXPECTATION ECONOMY has been building slowly in the background. The biggest difference from five to ten years ago? Word of mouth now travels the world in a flash, making product launches instantly global, turning every new brand—big or small—into a potential ‘player’, and most importantly, rewarding exceptional performance with immediate interest and approval from consumers. Basically, Joseph Schumpeter’s ‘Creative Destruction’ on steroids.
The effect of the EXPECTATION ECONOMY on consumers’ moods? Once high(er) expectations have been set, they are bound to go largely unmet, since the majority of brands still choose not to keep up with the best of the best (more on that later). In 2008, well-informed consumers will thus find themselves in a perpetual state of indifference and/or irritation.
Indifference will hit those brands that consumers know are underperforming, and that they can avoid due to sufficient availability of the best of the best. If you’re working for one of those underperforming brands, the scary thing is not just selling less (or nothing). It’s that indifferent consumers will stop being forgiving, they will stop being cooperative and giving you feedback on how to be more like other, better performing competitors. They’ll just leave and never return, without telling you why.
Perpetual irritation is just as bad: this will occur when consumers are forced to buy from an underperforming brand, due to limited or no availability of what they already know is the best of the best.**
In this light, pay special attention to fake loyalty and postponed purchases:
- Fake loyalty: consumers will continue to purchase from underperforming brands if the ‘real thing’ isn’t available. To the underperforming brand, all may seem quiet on the western front, until the best of the best suddenly does become available. Good examples of fake loyalty can be found in the airline industry: millions of frequent flyers around the world know that Virgin Atlantic, Singapore Airlines and Emirates offer a superior experience, but since these airlines don’t fly on all routes, consumers have no choice but to fly with subpar airlines now or then, or all of the time. Count on them to vote with their wallets every time new routes are added by these ‘best of the best’ carriers, even if they’ve never flown with them before.
- Postponing purchases: some ‘best of the best’ brands like Apple actually manage to indirectly convince consumers to postpone certain purchases. Many consumers would rather wait for the iPhone or MacBook Air to become available, than to buy a new phone or laptop. Again, due to the dissemination of information, even local product launches are, from a VICARIOUS CONSUMPTION angle, instantly global. Digital services have already succumbed to phased distribution; the physical world is next.
** Only if the best of the best can be classified as truly UBER PREMIUM, i.e. financially out of reach to most, well-informed consumers are not upset if they don’t get that kind of experience wherever/whenever.
Adapted from: http://trendwatching.com/trends/expectationeconomy.htm
