The millennials are an interesting lot for they look forward to experiences rather than acquisition. Physical Possession replaces title ownership. However, this seems to have an interesting proposition for businesses. For products that are being ‘perceived’ as functional in nature be it a house to stay in, a vehicle for transportation, or electronic appliances for everyday use, the economics of renting vs buying, seems to be the key decision driver. Millennials choose to go in for renting these for it allows the flexibility to change constantly without bearing the brunt of depreciating capital. Also, the millennial generation is at ease with a multi-user concept when it comes to number of users who have or are using a particular product/service. Additionally, with sharing of living space to product usage becoming an urban reality, apportioning the tab becomes more practical when it is about renting out rather than product purchase.
Now that satiation with experiences is gaining momentum over ownership of a product, there are interesting implications for marketers.
– Product marketers need to re-imagine themselves as service craftsmen for millennials. The marketing mix needs to be recrafted to accommodate for this compelling consumer behavioural shift.
– For Instance, a real estate brand might benefit from positioning themselves as providers of differentiated service with pricing depending the range of services the customer signs up for starting from a concierge to a swimming pool to a home gym.
– From a pricing perspective, Pay per Use in the consumer space will gain thrust akin to cloud computing in the enterprise space.
– Share of Wallet woes could pave the way to effective collaboration among complementary businesses. Can we think of a service line assortment of a living space equipped with the latest gadgets and a chauffeured rental car all in a pay per use format? This way the real estate marketer stops focusing on pricing based on sq.footage rather than on the consortium of services the customer opts for, bringing in enormous value to the consumer.
– Marketers also need to acknowledge the on-demand nature of consumption characteristic of millennials. Movie rentals giving way to a Netflix, is a classic case in point. This also paves the way to new offering developments. For instance, this generation is a 3 – AM- to- bed – sleep starved generation, how about a guided talk me into sleep on-demand program equipped bedrooms?
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