Challenges and effects of a customized market

Challenges and effects of a customized market

Monday, 8 april 2019 | Redacción CEU

In the digital age, customers have reached maturity. Catchy slogans or the continuous bombardment of advertising messages no longer work. Consumers easily handle different technological devices, pay less attention to ads and choose among countless options. Brands can only combat this reality with a deep change, by reformulating their strategies to reach clients, and by establishing a new relationship with them. On the other hand, society becomes more demanding and requests tailored products and services in increasingly shorter times. The industry responds with a clear commitment to hyperpersonalization. But, what challenges and effects does this new individualized market pose?

 

Technological development is enabling consumers to access customized products and services, and companies to develop products which are adapted to the particular needs of clients quickly and economically. This makes the expectations of customers get increasingly higher. However, the report Technology Vision 2019 of Accenture indicates that this combination will not be enough in the future. The consultancy emphasizes the growing importance of "momentary markets". Companies will have to be able to find and take advantage of these temporary opportunities to offer new products or services with particular designs that meet the needs of clients at specific moments. In fact, when these firms are able to accomplish this mission, they may go one step further and anticipate even larger trends.

This report maintains that individualized and based-on-immediacy markets will be one of the five key trends that will be part of the "post-digital era". However, the consultancy is not the only one that points in this direction. Most experts agree the tendency to hyperpersonalization is already here. The facts that show this new mainstream are the growing importance of voice assistance (which is mainly applied at home), the bet on chatbots and the development of AI in marketing campaigns, the massive analysis of data and the arrival of 5G technology and the Internet of Things.

Personalization does not mean an invasion

With the bet on personalization, companies stop treating consumers as numbers, manage to adapt to their tastes and needs in a much effective way and are even able to create an emotional relationship with them. This connection adds value and promotes loyalty and customer's recommendations. Likewise, although they can be pleased by these personal experiences, this fact does not mean that they are willing to give up  their private life. One of the great challenges of hyperpersonalization is privacy. Brands must be able to approach clients without being annoying, uncomfortable or invasive.

New technologies are opening a whole range of possibilities. Brands have tools that help them anticipate the intentions, expectations and demands of customers. They also count on a huge amount of data to process. However, not only do they have to be able to make sense of these data and make use of these instruments in search of the best commercial strategy, they must also be very aware of where the limits lie. Scandals like Cambridge Analytica have warned both customers and the community at large. Going beyond these borders cannot just have legal consequences, but also commercial and reputational ones.

 

Challenges and effects of a customized market

Inside the bubble

The bubble filter is a concept that was popularized by cyber-activist Eli Pariser in order to explain how the algorithms that operate in search engines and social networks can result in users not being exposed to certain information, especially one which is not in line with their points of view, thus remaining isolated in ideological or cultural bubbles. According to his thesis, users have their own universe on the Net, and it varies in relation to who users are and how they behave. This entails a problem, people do not have the option to decide what is inside and what is outside their bubble, the algorithms themselves make this decision for them.

At first, editors were in charge of driving the traffic of information, now this task rests with  algorithms which, according to Pariser, lack ethical principles. Then, it is important that these algorithms are not guided only by criteria such as relevance in order to ensure a good democratic health. They must also be based on other premises such as importance, inconvenience, challenge and divergent points of view. Otherwise, they will lose their sense of civic responsibility and transparency.

For his part, Eric Schmidt, executive director of Google between 2001 and 2011, already manifested the power of "individual targeting". In a TED Talk, Pariser mentioned one of his famous quotes in relation to this topic: <<The technology will be so good it will be very hard for people to watch or consume something that has not in some sense been tailored for them>>.

At The CEU IAM Business School we are aware of the magnitude of the challenges that marketing professionals must face. For this reason, we have designed a training programme with a current and practical approach in the field of sales and digital marketing. Ask for further information about our Executive Master in Digital Marketing!

 

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