Algorithms anticipate our needs and desires so well that it is an open question if consumers are really making their own decisions or just feel as though they are.
November 9, 2018 6 min read
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One of the most frequent comments we get in marketing is that, because of the pervasiveness of access to brands, consumers are in control and brands must adapt to that power shift.
If marketers are just now shifting to the world where consumers have the power, they may be reacting to something that is already beginning to pass. We are embarking on a new era in the supply chain where the power, and thereby the opportunity, is shifting again. Consumers are less in control than they once were, and the marketers who want to influence purchases must adapt again.
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Mobility of power.
As fast as intermediation became a way to connect those who sell with the consumers who buy, disintermediation has ever since been a perpetual threat to middlemen. Brands at every point in the process scramble to adapt to shifts in power, match demand, realign costs and defeat competitors.
At various times in history, the supply chain wielded the power and thereby concentrated wealth in this country into the pockets of those in powerful positions. It isn’t hard to see where that wealth accumulated. Just look at the names on buildings, universities, and even today’s lists of wealthy people.
A brief history of the industry.
In the beginning, those who dug raw materials out of the ground had the power. Then, steel barons. They are household names — Rockefeller, Carnegie. From there, logistics enabled raw materials to get to the people who made things, including the railroads. These were names like Vanderbilt. Financiers, such as JP Morgan, enabled investment and innovation throughout the supply chain; power shifts began to accelerate.
Then, emboldened innovators changed how things, like cars, are made. Assembly lines were introduced so we could manufacture at scale. Power shifted again to people with names like Ford and Wrigley, the manufacturers.
Then, as the country broadened and manufacturers needed their products to reach the corners of our country, power transitioned to the distributors who could deliver to mom‑and‑pop shops across the country. Prohibition disappeared. The National Automotive Dealers Association reemerged.
Consolidating the mom‑and‑pop general stores shifted power to those who could purchase at scale. The catalog company Sears emerged, and that gave way to the most powerful retailer in the world — Walmart. Fast track to today. Nearly that entire family is on the Forbes list of wealthiest people.
Then emerged the internet. Transactions and information became democratized and shifted power to the consumer. Parts of the supply chain became disjointed while simultaneously giving rise to new intermediaries closer to point of transaction. Financial tools like PayPal and TurboTax emerged, UPS and FedEx exploded, and Amazon was born. Today, with only the effort it takes to move a thumb, we can find the lowest price on any item using our phone, order it through an ever-connected financial mechanism and have it delivered within hours. Consumers feel powerful; they feel in control. But, are they?
What is influencing what you see, how you select items, how you feel about brands and, ultimately, what you buy? Introducing you to the era where machines are in control.
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The power of the machines.
Consider one of the most common marketing tactics, search engine optimization (SEO). This entire practice is focused on chasing the algorithms of search engines to influence what is displayed to the consumer or buyer. Time is focused on optimizing machines, not directly communicating with the consumer themselves. As some say, if you can’t find it on the first search page on Google, it may as well not exist.
Then, with the ongoing maturity of the Internet of Things (IoT), the machines learn behaviors which then can create and reinforce habits. When you run out of groceries, the item and brand already in your refrigerator will get priority based on your established shopping patterns. The machine will reinforce these habits as the path of least resistance. This is the machine learning reinforcing your habits.
Finally, imagine your Netflix account and how it recommends shows or movies to watch based on things you’ve already watched that you may like. It may even autoplay episodes back-to-back encouraging midnight binge-watching sessions.
If a consumer ever wants to make a change to what they’re receiving from their machines, it will take considerable effort. Imagine unwinding your preferences on Netflix, recommended products on Amazon, your search history on Google, your travel patterns consumed by airlines, your departure and arrival patterns on your Nest, your refrigerator inventory — and the list goes on.
But, as a brand that wants to be included in a machine’s consideration for a particular consumer, you’re going to have to learn how to make or break machine’s habits by getting adept at making people want to go through the effort to make a change.
Making and breaking habits to win.
How do you, as a marketer, break through to become the consumer preference, or even just an option to buy?
If you sell milk, and want a consumer to switch to your brand, you have to convince them to make the change. You need to give them a significant reason to go through the effort of switching. You have to make them believe that the previous brand they’ve chosen is nearly killing them and that your grass-fed, organic brand is going to save their life.
That is an extreme case, so thank goodness consumers have set preferences that are far more basic. If instead of buying the milk already in their fridge, they want the cheapest milk, so the machine will adjust to automate that choice and won’t conform to any kind of brand loyalty, but rather devolve to product characteristics. Then, the machine will build on that habit and likely suggest and scale to other products similarly because of that particular preference.
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There are far more ways to cut this idea that will unfold as the machines take on more of our daily tasks, however, at the most basic level, marketers will have to adapt their skill sets and awareness to understand how the machines “think” in order to influence them to their favor. Then, at the consumer level, we will still have to appeal to them emotionally, but we will have to do so in a way that encourages them to overcome the effort barrier set upon them to catalyze a change. Subtle differences or funny commercials may no longer be enough. It will require true evolutions that resonate and motivate the effort to change.
The power has moved and those who adapt will be prepared for the new future.
This article is from Entrepreneur.com
