Future success requires going boldly where no one has gone before
Build it and they will come. That strategy may have worked well in the past era of big box retail stores. But, perusing the retail headlines today, it becomes readily apparent that even big box retailers, like Walmart, are experiencing dramatic shifts in consumer store traffic. Retailers can no longer assume that today's empowered consumers will behave as they have in the past. A great case study in consumer behavior is the rapidly changing patterns of media consumption. Consumers are increasingly turning to Netflix and YouTube as primary sources. This behavioral shift not only impacts traditional media networks, it is a harbinger for retailers as well. Future success will depend upon the ability to boldly go where others have not gone before … to places where consumers now consume.
Why this is important: Technology has given consumers unprecedented power of when, where and how they choose to consume. The future belongs not to specific channels, but those who boldly go to reach consumers where they are consuming.
Media consumption – a case study in consumer behavior change
In the not too distant past, consumers bought DVDs and CDs for personal entertainment. In fact, DVDs might be considered the first step in the evolution of consumer behavior of having the choice of how and when to consume media independent from the traditional TV networks. Physical media such as DVDs not only gave consumers the power of choice in terms of which content, it enabled them to schedule viewing on their schedule, not the networks.
With the advent of DVRs and digital streaming, consumers have rapidly evolved their behaviors to personal style of consuming media on their own terms and schedule. This is not only having a tremendous impact on the traditional media and cable networks, but retail as well. Gone are the Tuesday media launch days when the new movies arrived in retail stores for sale. While there are still mega launches for blockbuster games like Halo, the movies, music and gaming shelves continue to shrink in the retail store aisles.
Netflix is a leading indicator of the changing patterns in behavior
Do changing patterns of consumer behavior really matter to retail? Just examine what happened to Tower Records and Blockbuster. As consumers switched from physical media to digital consumption patterns, channels of distribution changed and some retail channels literally disappeared overnight.
Netflix is literally a case study in how an innovator has adapted to changing consumer behavior … and has in fact become a catalyst accelerating change. Consider the following statistics reported by Online Video Insider about Netflix regular users:
- Regular Netflix users watch 10 TV shows and 4 Movies per week
- That's 100% more TV show consumption per week over 3 years ago
- 24% of Netflix users are consuming on mobile devices, double 3 years ago
Changing consumer behavior = Changed consumer expectations
Netflix and YouTube have become major players in consumer media consumption. Consumers spend more time on them than viewing any traditional media channels or networks. The implications of these rapid changes in the last 3 years are profound:
- Netflix is not just a movie distribution business
- Netflix has become a major force in the traditional TV business
- With the addition of original content, Netflix is a TV ecosystem unto itself
- Netflix has become a way of life/consumption for consumers
- Consumers now expect traditional channels/networks to adapt
We have said it before, and it bears repeating again. Traditional channels and retailers are not the primary forces of change today. Consumers are! Success will depend upon the ability to innovate and adapt to the changing patterns of consumers.
Star Wars will grab the headlines … Star Trek is the case study to watch
There maybe no bigger coming media event than the new Star Wars movie. So, you may not be the only one to have missed the fact that CBS is launching a new Star Trek series. In case you can't remember which is which, Star Trek was the TV series with Captain Kirk, and then Captain Picard. While there were some Star Trek movies, the origins of Star Trek was on TV. And, the interesting twist is that Star Trek is now returning as a new series to CBS, which is the epitome of a very traditional TV network.
But, here is the interesting evolution – CBS is going boldly to consumers where no network has gone before. While CBS plans to preview Star Trek on the broadcast network in 2017, the series will NOT appear on traditional network programming. Instead, CBS will broadcast all episodes on CBS All Access, which is a video streaming platform available via subscription for $5.99 per month.
To paraphrase Dr. Spock from Star Trek … entirely logical, given the changing patterns of consumer consumption, and the growth of millennials and their addiction to mobility.
The best way to predict the future is to create it!!
This post is not about the future of retail stores, or even ecommerce. The purpose is to yet again highlight the power of consumers in today's marketplace. Their changing patterns of behavior and consumption has changed retail more in the last 5 years than anything in the previous 5 decades!
Despite Tower Records or Blockbuster's best efforts to preserve their retail model, consumers evolved, and those retailers literally became irrelevant. Far too many retailers today are still trying to build "it" (stores), and get consumers to come to physical and online stores via advertising, promotions and price.
The essence of retail is that consumers consume. Today, they have unprecedented power to control when where and how. Future success will require some courage to leave the comfort of the past, and to go boldly to where consumers are now consuming.
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Sources:
- Morning News Beat: Consumption Takeaways From New Netflix Numbers, Kevin Coupe; November 6, 2015
- Morning News Beat: Tuesday Morning Eye-Opener: Boldly Go, Kevin Coupe; November 3, 2015
- Consuming Media Image: Nenetus; Freedigitalphotos.net
- DVD Image: Jeroen van Oostrom; Freedigitalphotos.net
- Digital Media Consumption Image: Cool Design; Freedigitalphotos.net
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