Blog 4 - Customer Insights Paper Topic

As consumers we have more choices, more options, and more products at the tip of our fingers than ever before. We are surrounded by things we need, the things we want, and the things we think we need or want. We are bombarded with endless product options to consider. The task of buying a product has changed from a simple chore into a daunting process. With advanced technology and more choice, the businesses that dominate our lives are finding profits in new areas. They no longer have to market the most popular item or restrict their brands to a selected group of products. Overall, more product choices affect how consumers decide to purchase products and how companies can choose to make a profit.
Chris Anderson brilliantly outlines the idea of niche marketing in his book, The Long Tail. The book explains the idea that online services carry far more inventory than traditional retailers. Typically consumers flock to the popular books, music, and films because that is all that is offered and marketed. However, Anderson explores the idea that there is also a high demand and profitability in niche markets. Outlined in the book, Chris describes his observations – 1) the tail of available variety is far longer than we realize; 2) it’s now within reach economically; 3) all those niches, when aggregated, can make up a significant market. This means that consumers are being offered more choices than ever before. We are not limited to the popular hits or products because we can now find anything we want. Even the most unpopular song, when placed on I-tunes and purchased only a few times, makes a profit that was once unavailable and believed to be worthless. There is no storage cost tied to providing this ‘unpopular’ song to millions of consumers. Even though the purchases might be minimal compared to the popular top 40, any purchase creates additional revenue for Apple and offers consumers something they could not have found before.
The perfect example of this Anderson’s idea is Amazon. Jeff Bezos realized what he could do with books and the money that he could make. Amazon carries more books than any other retailer in the world. At Amazon you can find just about any book you are looking for. On the surface it seems silly to carry a book that might only sell to a teeny tiny market. After really diving into the Amazon business plan, it becomes clear that a tail of consumer choice generates more freedom for consumers and dollars for the company. By creating a tail of variety, Amazon directly reflects the idea that Anderson has proposed.
The Long Tail also correlates with the idea that Barry Schwarz proposed about consumer decision making. In his opinion, Schwarz believes that choice empowers society with the freedom to make their own decisions. However, he goes on to demonstrate that too much choice paralysizes consumers because no one actually knows what they want or what they need. While a consumer might say they need a certain product, they will probably change their mind by the time they are ready to finalize their purchase. The line between what we really need and what we think we need is growing blurry and the enormous amount of choice provided is not helping to minimize the confusion. With choice comes an endless variety of alternatives that can be evaluated and interpreted differently depending on the consumer.
These ideas change the world of a consumer, but they greatly affect the world of consumer insights. Combined, both ideas make a marketer’s job 100 times harder to determine what their targets will effectively respond to. If a customer says they need one thing, but end up changing their mind, how do we know the most appealing way to market our product? Despite the challenge, marketers can no longer rely on their laurels. They have to research and dig deeper to figure out what is going to happen and be there before it does. Marketers cannot force people into buying their product. With all of the choices and opportunities, customers don’t have to be forced because they have so many other options.