Goodbye to mass, here’s ‘segmented’ consumption: an opportunity to build competitive advantage
Australia and New Zealand are implementing ‘travel bubbles’. Germany and Austria, too. Countries are circulating lists with ‘red’, ‘yellow’ and ‘green’ zones. Big indoor and outdoor events won’t be possible until there’s a vaccine. Limitations for certain age groups might be put in place. Mass tourism and other sectors are heavily hurt. But, opportunities are arising as well. For countries and companies. How?
Although some measures might be temporarily, many will be with us for a while or even forever. Add to this the change in consumer mindset and behaviour that will be the legacy of this impactful period and I think it’s fair to expect a shift from a ‘mass’ interconnected world to a more ‘segmented’ world. This will directly impact how we consume. This will hurt companies and sectors really bad, for sure. But it also offers new opportunities. Countries and companies that deal with this well, will be able to build great competitive advantage in the coming period.
‘Segmented’
Less ‘mass’ means a terrible wipe out in revenues for many companies in travel, events, hospitality. But many new opportunities will arise as well. It does require a radical shift in business thinking though. It will be much less about mass consumption, but more about a ‘segmented’ approach. Not exactly in the way as Philip Kotler meant it, but a business approach that looks at spreading consumption over elements like time, space, ages, regions. Doing this really well, creates opportunities for businesses by launching strategies around more quality, higher prices and an increasing local or regional focus.
Companies that deal well with this segmented approach, will be able to build great competitive advantage in the coming period.
A couple of quick thoughts and ideas on the segmented approach for time, region, digital and purpose:
Time
Holiday season within countries can easily be spread over more weeks or months, so we don’t all go skiing or sunbathing at the same time. Occupancy rates of hotels might be better spread over months leading to a more equal revenue stream throughout the year, and less extraordinary fluctuation of prices in peak period. Restaurants could offer less tables in more, shorter shifts: three per night to secure revenue while complying with health safety guidelines. Digital reservation tools help regulate the number of visitors in gyms, restaurants, bars and maybe even clubs and festivals.
Region
Countries, and therefore businesses, will have an increased domestic and regional focus. This new ‘Regionalism”, like in the example of the AUS-NZ travel bubble, will lead to a decrease of travellers coming in from all over the world. This will be a trend anyway, as travellers might be more afraid to sit on a desolate island far away, higher ticket prices and stricter border controls and entrance guidelines. This offers opportunities for more local, high-quality, cultural and ‘responsible’ travelling.
For the event businesses, small and high-quality might be the new sexy, in a hybrid model with connecting with your global contacts digitally. These are just a couple of examples. Yes, it’s different, but why wouldn’t it work? All in all, it comes down to ‘more specialty, less commodity’. And some creativity to think of a new way of approaching your market.
Digital
The digital world will experience impact, too. Rising nationalism and regionalism might narrow down opportunities for unlimited international scaling. Countries will be more protective, local regulations will play a bigger role and international supply chains might be damaged. This offers opportunities for more customer-focused offerings, as it’s easier to define buyer personas. Local and regional suppliers in the chain of physical products, but also local digital players will benefit from this and face less competition of bigtech and large global physical suppliers. It will be interesting to see how this evolves.
Purpose
More focus on the opportunity of limitations might mean less focus on purpose, as it wrote earlier this week. After all, purpose thrives on international scale to make a real impact. But, there is another side, too. If focus will be more local and regional, it might be easier to organise support for purpose-driven ideas and to truly bring the ideas to work. It might take some more time, but in the end these initiatives might lead to a more purpose-driven world after all.
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