Foreign trade and the new consumer

Barely was the metaphorical ink dry on my piece about businesses in Central Europe struggling to remain viable in the vital international marketplace, when I caught this pod-cast by Phil Dobbie a Brit exiled in Oz, who I don’t know and who is not related to me, but who I find, talks a lot of sense.

Although its a far more mature market, Australia shares one critical trait with some of the emerging new Central European markets – they don’t have a lot of people!  As Phil and his panel of experts agree in this broadcast, no business in any country can afford to focus exclusively on their domestic customers and when your population is fifteen million or less, if you do so you don’t have much scope.

They recognise that smaller economies have tended to exacerbate their problems by making it difficult for foreign experts to operate and by resisting their advice, something that I often see in the Central European markets, especially the Czech Republic.  I have noted lately that the organisations that seek advice from people like me are more often foreign-owned or managed businesses themselves, while Czech organisations stick with Czech advisers, which rarely gives them the perspective they need.

In my earlier piece I also introduce a new consumer with new priorities and suggest that the businesses that emerge from the current financial downturn a success will be those that recognise this critical change and adjust their strategy accordingly.  Every organisation, big and small,wherever they may be, is in the same boat, but there are valuable and very real opportunities for everyone and there’ll be no excuses afterwards for those who fail. 

This point was echoed this week by Lee Scott the outgoing Walmart CEO at the National Retail Federation in New York who told the audience that young customers in particular have adopted a new ethic.  They’ll buy what they need, think more carefully about purchases, avoid unessentials, pay cash and avoid credit.  Its going to be back to the drawing board for customer-facing organisations whose sales rely heavily on credit and I doubt the plethora of products that we have seen over the last few years, that are unessential, impractical or fail to deliver on any level, will survive.  Glad you bought that lava-lamp now aren’t you? 

The good news is that I believe that service will come back into fashion.  Not the service that so many retailers advertise these days, which amounts to no more than a spotty youth with a badge to confirm that he spent half a day on a product knowledge course that covered little more than how to switch the product on, but real service, from responsible people with a depth of knowledge and understanding of their product and a determination to serve their customer.

So, how is your organisation going to service the new consumer, at home or abroad?


3 responses to “Foreign trade and the new consumer

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  2. I haven’t read any of your earlier posts, but my questions is: do you think product variety will suffer as a result of this trend? Since the new consumer is more focused on the essentials, will that make a lot of products obsolete?

  3. My belief is that frivolous products and product groups will come under pressure, so, in that way, existing choices will be forced out of the market.

    This doesn’t preclude new products arriving within “valued” groups though. However, more demanding customers will ensure that those offerings will have to deliver on a new level.

    I think there will be fewer opportunities to sell poorly conceived products, quick-buck-generators and products of poor quality and the additional impact of environment sensitivity may weigh heavily on manufacturers of disposable products too.

    Products that look great, but perform badly or have no practical value will also struggle for justification. We may also discover that consumers will equate product cost to longevity and attached lesser importance to the esthetic. I already see businesses wrestling with the demand by consumers in emerging markets that “expensive” products should perform better, be more robust and last longer. These customers are less inclined to accept that sometimes expensive things are expensive because they are finer and therefore require greater care.

    The bottom line is that quality will increasingly ace fashion and price in the value equation.

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