The death of the mass market and why consumers couldn’t be happier
The environment for brands has changed dramatically just in the past few years. Contributor Andrew Waber explains what it takes to thrive today.
Think back to the late 1990s – Friends was the biggest TV show in America with between 15-20% of all households tuning in. Nothing comes close on a percentage basis now, not even Game of Thrones, one of the biggest hits in the past 10 years.
Oprah, at her height, had 48 million viewers per week. Now, the biggest daytime TV stars, like Ellen DeGeneres or Dr. Phil, draw less than one-tenth of that per week. The number of new self-published titles on places like Amazon surpassed 780,000 in 2015 – an increase of more than 375 percent over just four years, according to Bowker, which issues new ISBNs.
And the story is the same when you look at B2C products. Tide reportedly had a 65% in-store market share by building a “good for everybody” product and marketing to a generic middle-class America. There will never be another 65% market share CPG product ever again. When Procter & Gamble purchased Gillette, it was the biggest CPG acquisition of all time, but now they’re under attack by a wide array of upstarts including Dollar Shave Club, recently purchased by Unilever.
The cost to switch brands for consumers is zero. And with new manufacturing technology, and the ability to market directly to consumers, brands can create a razor just for “redheads with beards”…and make millions. Gillette could never do that in the past, but they, and many other companies, have the ability to do so profitably today.
This is a sea change in what has long defined the consumer marketplace – the idea of “mass market” is in the past, and in its wake are fragmentation and niches.
Technology has enabled consumers to skip over these mass-market models. Amazon and Google allow them to quickly and easily search out specific products that speak to them. And data shows that this new buyer journey leads to consumers committing their dollars to brands that, across digital channels, give them content they care about – more photos, more bullets and information, and finally, more reviews by previous buyers to validate their decision.
An analysis that my company, Salsify, completed on hundreds of thousands of Amazon listings in early 2018 demonstrated that if you take two listings that appear side-by-side in an Amazon search engine results page (SERP), the one with more images will convert at a higher rate and outrank the competitor 53% of the time. In the same way, a listing with more bullets will convert higher and outrank the side-by-side competitor 51% of the time. And finally, a listing with more reviews will convert higher and outrank the competitor 58% of the time.
Of course, getting this amazing content across even significant portions of a product portfolio is a major challenge. Brands are being squeezed from all sides — pressure on margins within online retail, an increasing array of private-labeled goods, declining in-store sales, the growing popularity of native digital brands and other upstart companies. But underlying all these trends is the reality that today’s consumers overwhelmingly value and trust brands that deliver a good product experience.
This underscores a point I mentioned in a previous column — product listings are the new brand marketing. It’s how consumers find products, and it’s what converts them into buyers. Consumers are both willing to pay more, and are likely to buy more often, from brands that deliver a great product experience online.
To wit, when asked what factors drive them to buy a higher-priced option, 35% of more than 1,000 US consumers who shopped online at least once in 2017 said it was “better reviews” – the top choice by a significant margin, the same analysis found.
What brands need to do to be successful
Success across an entire product catalog here requires brands to be both active and agile. Present leaders show the importance of tactics. Brands need to think about this as hand-to-hand combat with the market as it’s moving, particularly against competitors within important search terms. Understanding where and how competitors are outranking them, and using that knowledge to actively update pages with engaging content, solicit reviews, or look at AMS-type search marketing that addresses gaps – on a near product-by-product basis.
This significant business agility will only get more challenging for brands, and requires massive investments in content, analytics, and artificial intelligence to pull off at scale over the long term. This fact feels nearly inevitable, and is how a company like Gillette can quickly and competently deliver a relevant “redheads with beards” product experience, in the wake of say, a news event like Prince Harry shaving his famous facial hair.
To endure in the current environment, brands must adopt a practice of product experience management. Adopting a process that gives consumers a more relevant experience wherever they shop and continuously optimizes that experience based on cues from the market is critical. This strategy will improve conversion rates, fosters consumer trust, spurs online reviews, and ultimately improves margins.
Today’s consumers are strongly voicing, both explicitly and with their wallets, their preferences for products that demonstrably provide great experiences for them or others. Overall brand “awareness” doesn’t cut it, and to survive, brands need to rise to the occasion.