A report from the Economist Intelligence Unit (EIU), commissioned by Accenture Ireland, has predicted the emergence of new types of consumer that will have a significant effect on how Irish businesses engage with the market.
There are five types of consumer predicted. There is the emerging consumer which characterises people primarily from emerging economies such as Brazil, Russia, India and China (BRIC). There is the frugal consumer, which as the name suggests, is a straitened consumer in light of the current macro-economic climate. There is the connected consumer using multiple connected devices from PCs and laptops to tablets and smart phones. The aging consumer reflects the growing number of over 60s in western countries. The caring consumer is driven by ethical considerations in purchase, whether that be ethical sourcing or human rights.
The study undertaken to gauge how prepared Irish businesses were to take advantage of opportunities arising from the emergence of these consumers over the next five years.
Some 86% of respondents, who were primarily senior executives from medium and large companies, felt that they were prepared, though only 34% considered themselves very prepared. Perhaps surprisingly, only 21% said that they considered the connected consumer as the most important to their business, with emerging (42%) and frugal (25%) consumers both figuring higher in importance.
However, in any customer engagement, digital media was seen as being highly important and yet only 13% will significantly increase their digital investment, with about 40% saying they will increase it somewhat and one-fifth predicting minimal to no change.
This is all in light of nearly a fifth (18%) of companies expecting to see half their revenues coming through digital channels in the next five years, which is more than double the current figure, according to the report.
"It’s very encouraging to see that Irish organisations recognise the significant opportunities associated with the connected consumer, and are taking steps to prepare to take advantage of those opportunities," said to Rebecca Gilmore, head of Customer and Marketing Services, Accenture Ireland. "Indeed, the fact that nearly one fifth of Irish organisations expect around half their revenue to come from digital channels in the next five years reflects this view. However, there are signs that although Irish organisations recognise the potential of digital, they may not be going far enough in their commitment to making the relevant investments in digital channels to realise this potential, with only 13% of organisations stating they will be significantly increasing their digital investment. This is concerning as they cannot hope to take advantage of the ‘connected consumer’ without making the necessary investments to ensure they have an infrastructure that is fit for purpose."
Social media also figured highly in future plans, as 57% of respondents said that they would increase their social media activities, with only 15% saying that they currently have no social media engagement. According to the report, the most common activities by Irish companies on social media sites are promotion of products and services (56%) followed by customer service (51%)
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According to Gilmore, many Irish organisations are working hard to determine how best to use social media.
"What we’re seeing is that many organisations are using a ‘listen, engage and optimise’ approach to social media, and this can be quite powerful to help the company evolve and build up the social media presence over time, continuously testing and learning and refining before moving onto the next stage," said Gilmore.
"They start out by actively listening to and analysing customer dialogue and feedback, before starting to engage – this could be either through delivering customer service, or through engaging customers in communities and starting to develop loyalty and affinity with the brand. More advanced companies are then able to build on these experiences and insights, and working with the communities they have developed to start proactively delivering targeted marketing and selling to their customers through social media. This is where they will start to see the business benefits and financial returns from their investments."
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