When private consumption drives as much as 60% of GDP, this looks like a dire landscape. Economists may propagate the Keynesian fundamentals of spending as the most critical factor for economic growth. But conventional financial wisdom of saving more for personal welfare currently rules the roost. In fact, non-consumption has taken on a competitive edge for most businesses now. What is required is ‘opportunity hunting’, in spite of government policies.Traditional market research always found that what customers say may not represent what they actually do. In focus groups, they express preference for top-end fashion clothing, but actually buy mass apparel. Observing consumers in actual usage situation will provide much insight. This can be done by combining digital tech with advanced analytical tools for more granular data. Remember, ‘cash-on-delivery’ was the result of customer insight. Hotels are repurposing retreats for remote working and offering ‘staycations’ in metros for those who can’t afford exotic locations.
Remember how the PR gaffe at WhatsApp on privacy resulted in a mass migration to Telegram and Signal a few months ago? Likewise, the China-India border clashes and the resultant ban on Chinese apps helped many Indian startups to act quickly. Consumers express various emotions differently — frustration, anger, fear, love and anxiety. These emotions are good routes to unearth non- or under-consumed areas in their lives. Existing offerings have not been able to address their needs and, therefore, there is an opportunity to disrupt. The proliferation of mobile wallets is an example of disruption brought out by the frustration of customers after demonetisation was announced in November 2016.
Research also shows that customer emotions can be a measure of — and strategically targeted to drive —behaviour. The recent spurt in ‘cause marketing’ shows how consumers increasingly support issues close to their heart.
Business owners have to assess their portfolio opportunities. How many extensions do their products have? Have they been re-engineering, instead of retiring, products? Are employees consuming their own business offerings? What can be done to improve non-consumption? Are consumers opting for cheaper, simpler, ‘good enough’ solutions? Consumers need to be excited to move out of the comforts of homes and choose products on offer. Companies do too much re-engineering and charge more when the need is for lower costs and reasonable performance. New market uncertainties and technologies must be used to drive opportunity portfolios for the future.
An opportunity to address non-consumption lies in under-utilised resources. For instance, appliances need maintenance, and skilled labour is lying idle. Aggregating and training them to deliver cheaper and faster services will relieve companies of delays in servicing. Recall how cellular operators used kirana stores to sell prepaid cards and recharge, creating a network closer to consumers, at very little cost. Banking services for the ‘un-bankable’ is another example.
Areas where consumers risk stretching the boundaries should be scouted. Remember, cheap counterfeit movies on DVDs and pirated copies of books used to be a rage —until Netflix and Kindle became easily accessible.
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Is it time to carefully gauge the aspect of non-consumption in overall GDP math? - Economic Times
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