Instant purchasing. Consumers increasingly transact right when the demand or need occurs. Today, when we realize that we have run out of hair conditioner while showering, we can directly order a new bottle through Dash technology then and there. And tomorrow, perhaps, when consumers are watching a streamed movie or browsing Pinterest, they will be able to point and click on a character’s suit or tie and buy it right away – without ever going to a retailer’s site. On Stylebook, a German fashion blog site, this is already possible.
Subscription-based purchasing. The growing popularity of subscription-based platforms is also undermining the primacy of the store as the main consumer touchpoint. In various categories – including music (Spotify), video (Netflix), transportation (Zipcar), underwear (MeUndies), groceries (Blue Apron), news (Blendle) and men’s wear (Lewk) – a subscriber can either conveniently choose immediately from a broad selection at the moment of need or simply sign up and receive a regular delivery — without having to engage directly with any other intermediary.
Automated purchasing. We’re increasingly seeing many types of products being purchased automatically – on the basis of “intelligent” products. The latest generation of Whirlpool washing machines, for example, can autonomously order a pre-specified amount of washing detergent after a predefined number of cycles. Samsung’s new range of refrigerators allows for “food management” by automatically re-ordering when the stock of, say, yogurt drops below a certain amount. Especially for fast-moving consumer goods, this development will also significantly push non-store-based sales.
Once customers decide to “lock themselves in” with a brand via subscription, dash technology or automated buying, it is much harder to dislodge this brand from the consumer. When consumers don’t face the choice at the shelf, a preferred brand’s position gets further entrenched. At the same time, competing brands have a much harder time replacing the incumbent. And once locked in, traditional advertising will be even less efficient for competitors.
From influencing transactions to influencing decisions
The key consequence of new consumption habits is that buying has become an ambient activity – blending naturally into consumer’s lived reality. In contrast, current marketing practice is for the most part still perfecting the strategy of shopper marketing – which rests on the conventional assumption that most decisions are made on impulse in the store. Many retailers still enter into an arms race of persuasion and hard selling at the point of sale. In order to sway the customer when the time comes to transact they try to “hit hard enough” with prices, promos and presence. Such tactics ignore that the decision about the purchase of a particular product is in more and more cases moving away from the POS altogether. As those purchase decisions happen during consumers’ ordinary daily life and consumption routine, brands as well as retailers have to learn to engage in a much more natural way with their consumers during the entire consumption cycle. These considerations might have been the reason why Adidas decided to purchase the fitness app Runtastic in 2015 for US$240 million (see Box 1).