In last weekend’s Financial Times, Tyler Brûlé wrote, “Ten years ago, Slippers the cat used to have a choice of fish or chicken out of a tin. Today Slippers (if she’s still with us) can have vegetarian mousse with salmon aroma sprayed on top. Her owners can have it delivered before they leave for work, while they’re at the office or when they come home. Slippers can also have home spa on weekends, vitamin beverages and a customized Made in Japan pram if her owners want to take her for a spin.”
That pretty much says it all about consumers today: They not only have more choice than ever. They also are more empowered, confident, and demanding.
Armed with online information and social networks, consumers can refine their tastes independently, locate what they want when they want it, publicly critique what they get, and sometimes, create what they’re looking for if it’s not ready-made.
That’s a challenge for business. As Deloitte said in a recent report, “. . . a gap is emerging between consumer expectations and the ability of businesses to meet them. Businesses are struggling to keep pace with an ever more fickle customer.” It’s no longer what Deloitte calls the “funnel” process where consumers select from what’s on offer. “The path to purchase” has been seriously disrupted.
Signs of high consumer expectations are all around us: Traditional retail is fighting for its life. Big box and department stores seem out of step. Branded products don’t hold the kind of sway they used to — if anything, consumers are skeptical that big brands know what they really want. And products and services proliferate. There are no-frills flights to Europe for cheap, easy-to-prepare meal ingredients delivered to your door, three dozen flavors of potato chips instead of the three we used to be happy with. . .
It’s progress for more people to have more things that are better. Empowered consumers drive down prices, intensify competition, and force innovation.
But businesses still must make a profit. They must cater to exacting customers with individualistic tastes and be able to charge more than their costs while fending off competitors. And that’s a tight spot.
One area where some think consumer expectations have gotten unrealistic? Restaurants.
It’s been a golden age for diners, who have learned to expect artisan, handmade, and creative but well-priced food as the norm. But some say it can’t last and have warned of an implosion in the industry.
Famed New York chef David Chang has said it’s nearly impossible for restaurants to survive today because they can’t charge enough for what they’re doing while rent and labor costs soar and customers demand more. New Orleans chef James Cullen put it this way: “Customers now think life should be one endless brunch. With freshly made bottomless mimosas.” (see thrillist.com, 12/30/2016: “There’s a Massive Restaurant Industry Bubble, and It’s About to Burst”)
Could it be that customers may just have to ratchet down their expectations?
