Scenario 2: Peer to peer review age

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Description

Scenario Diagram

2010 - 2013: Economic Uncertainty & Growing sustainability

In the aftermath of the current economic slowdown, consumers continue to be reticent about purchases. While income has not risen, revolving credit card debt has been falling at double digit rates. Also, the US savings rate, which for years languished near 0, or even negative when counting credit card debt, has grown and maintained itself at almost 5%. Much of these credit card payments will be permanent as credit card companies are also decreasing available credit, with some estimates going as high as 20% within a year. These factors signify a significant shift downward in the amount of spending by Americans. Also, he threat of falling back into a recession, or even a depression, shown by lingering high unemployment (In addition to replacing 7.2 million lost jobs, the economy needs an additional 100,000 a month to keep up with population growth. If the job market returns to the rapid pace of the 1990s -- adding 2.15 million private-sector jobs a year, double the 2001-2007 pace -- the U.S. wouldn't get back to a 5% unemployment rate until late 2017 ), weighs down unneeded purchases. Much like those who survived the Great Depression and remained significantly more cautious about purchases for many years, even decades after the economy strengthened, the previous numbers represent a lasting seismic shift in the US, and world-wide consumer. At the same time this change in spending habits is occurring, environmental concerns, especially around global warming are growing. The focus is on the successful Copenhagen treaty which also will be adding new costs, especially to US consumers. Besides higher prices for goods, as the first major world-wide environmental treaty signed by the US, awareness and acceptance of environmental factors, and the relationship with decades of rampant consumerism begins to be assessed in a meaningful way by large swaths of the population. Rather than creating a backlash, with fewer discretionary dollars to spend, consumers begin to consider the sustainability of the products they buy in growing numbers. From a technology perspective, Facebook finally turns cash flow positive at the beginning of this period and is profitable by 2011, signaling that Web 2.0 and social networking will continue to grow in importance. Also, second and third generation Android OS phones start to be introduced in 2010 that begin to have real success. One of the unique features of these phones is limited integration of Facebook in to the operating system. Specifically, users can link Facebook profiles into their contacts, which downloads some of the user data from the web including status, birthday, and profile pictures. Users love these features and demand more.

2014 - 2016: Reticence & Reviews

As people begin to make fewer purchases they start to take the time to analyze more that which they are buying. Sustainability is one of the biggest factors in this movement. Despite in the past when consumers could get most information from packaging and store employees, the environmental aspects of products is not easily listed and are often so diverse that it is beyond most store’s sales personnel’s knowledge. People begin to ask family and friends more about purchases. Cell phone technology which allows photos of items to instantly bring back reviews becomes more mainstream. Since so many customers have this mobile ability, Brick and Mortar stores start placing cheap PC’s around their store so that consumers can look online to compare prices, find environmental impacts, and get reviews. The government continues to draft legislation which punishes firms for buying reviews, deleting unfavorable reviews, and faking information. Much like fast food companies with calorie and fat-content information, while stores and consumer goods manufacturers are initially hesitant to list their sourcing and complete environmental impact, they do so, both bowing to rising consumer demand and also to stave off government regulations which would mandate this information. Between this increased legislation and the increased prevalence of this online information, consumers begin to feel more comfortable with the online data. Social networking becomes more integrated with computer and mobile OS’s. This prevalence, coupled with more free time as the older generation retires, begins to see large numbers of Baby Boomers joining social networking sites and spending more time online in general. With their increased free time and lack of job responsibilities, many retirees also get involved with online communities related to their previous professions, adding a great deal of knowledge and gravitas to forums and reviews. This becomes a positive feedback loop as the better information leads to growing online communities and the retirees begin to enjoy their newfound power and importance which they are otherwise lacking now that they are retired. Their success both ensures their continued involvement and also the encouragement more of their peers to become involved. Besides the sustainability importance in purchases, as consumers have fewer dollars to spend, they also demand longer product cycles and higher product quality. Both economically and environmentally, consumers are interested in replacing many items less frequently. As the quality of the product gains importance, tight money must be reallocated at firms as they try to improve their products and since peer to peer recommendations are becoming more important, advertising budgets start to feel some pressure.

2017 - 2020: Peer to peer prominence

Besides the online pressure, markets continue to get more segmented as free time is continuously divided between growing opportunities. This schism causes more problems for advertisers as they try and find value for money with their advertising spend. Also, ad budgets begin to get slashed with the money going to better product inputs and R&D. Once this process begins, products begin to disappear from shelves as companies begin to develop better, but fewer products. With fewer and fewer means of hitting large audiences, advertising becomes more generic and become about brand awareness rather than trying to convince customers to make purchases. Instead, companies become more involved in online forums and communities in a positive way. Rather than a menace, companies begin to realize that these sites represent free focus groups of their most involved and passionate customers. Rather than sending product samples for review to traditional media, increasing numbers of common citizens are getting previews and offering feedback to companies. Android, having become the number one phone operating system by the middle of the decade, has long since fully integrated the social web into all aspects of phone use and by the end of the decade, this is common for most phones and PC’s as well. With increased use, even more information is shared amonst users. Starting with calorie counters in which users only have to take a picture of their food to have it added to their daily counts, more and more information is shared. It becomes easier and easier for people to upload what they buy, see, and do, as well as their preferences and thoughts on those products and activities. With more information comes new features where a person can easily see what products their friends like, dislike, and the reasons for those feelings. This data is also anonymously, although demographically, shared with the cloud and any consumer at any time can look at any slice of who likes and dislikes products and why. Further clicks can list detailed reviews and the complete environmental impact of each purchase. Of course, all of this information is available both to the home pc user and the mobile user.

2020: End game

Since advertisements are less important and more related to awareness, as well as the greater producer involvement in the online consumer communities, and a growing producer environmental responsibility, the end result is a more positive relationship between consumers and producers as trust grows since the producers are seen more and more as truly fulfilling consumers needs and desires in a responsible manner.

Reference

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