home : hartbeat : 2002-12-27

12.27.2002

“HartBeat” is The Hartman Group's FREE online newsletter, providing insight, analysis, information and strategy to give business leaders the knowledge and vision to build sustainable brands.

Archives »
Click here for an archive of past HartBeat articles

digg
del.icio.us

reddit
twitter

friendfeed

StumbleUpon

Re-thinking Our Traditional Notion Of The Mass Marketplace: The Emerging New Paradigm - Part Two

To further understand this fundamental shift in the American marketplace introduced in last week's issue, we could invoke Safeway as a model of the traditional mass marketplace - a homogenous, physical place where consumers turn to satisfy relatively undifferentiated needs. In the emerging paradigm, there exists no single space but instead, an amalgamation of industry segments, retailers, channels and products - all flexibly aligned by lifestyle-driven consumption patterns. The most common mistake made by marketers and manufacturers in the current commercial landscape is to assume there exists another Safeway - another generalized, straightforward, physical representation of the marketplace - waiting in the wings to help us better understand emerging patterns of commerce.

I should be careful to add here that I am not implying the death of relatively undifferentiated, price-sensitive goods and services - long the staples of the mass marketplace. Those categories and sectors may, in fact, witness significant growth. They will do so, however, only as highly differentiated, reconfigured market spaces - a point dramatically underscored by retailers such as Wal-Mart and Costco. Just as the likes of REI and Restoration Hardware have carved out distinctive niches in the home-furnishing and recreation marketplaces, Costco have demonstrated themselves specialists in the value and efficiency sectors. What we are seeing in the case of Costco, then, is the emergence of a specialty, niche marketplace based on value and savings. Ironically, though, Costco's niche market, specialist-of-value status need not restrict them to the relatively undifferentiated, price-sensitive goods and services described above. In fact, a recent visit unearthed such (relatively) high-end luxury goods as Waterford Crystal, Lladro collectibles and high-priced ($20,000+) diamond rings.

If it is not evident by now, this emerging paradigm will cause us to rethink many of the logics and practices that we've previously developed to address the mass marketplace. Retailing will come to be seen not as the (relatively) straightforward practice of placing goods on shelves but as a complex interchange between a diverse array of channels, differentiated goods and services, lifestyle patterns and identities. In these scenarios more ephemeral notions such as experience, social context and community often replace traditional notions of price and quantity as crucial success indicators. Similarly, the logics governing distribution channel practices will require equal retooling.

A FINAL REFRAIN
I think most of us have an intuitive sense of the ideas presented thus far. We all need only purchase a $4 latte at the airport to realize that "things aren't as they used to be." And on a similar note, I'm certainly not naive enough to think that I am the first person to write about issues such as differentiation, specialization and mass customization. That said, I remain bewildered every time I see discussions revert back to the languages, logics and research traditions of the old mass marketplace. Try as hard as we might, we just can't seem to shake our baggage.

Hence, in a spirit forged from equal parts frustration, humor and optimism, I offer the following summary:

Due to a host of factors, not the least of which included wide-scale cultural and institutional change, the mass marketplace has been summarily retired.
In its place you will find, ironically enough, a market that will prove to be much, much larger.
This larger market will look nothing like the old mass market. It will be comprised of lots of smaller, specialty niches (e.g., product worlds, etc.) as well as connections between those niches (e.g., retail channels, etc.).
In the old mass market, consumers remained mostly stationary, generally awaiting the offerings of a few large producers. In the newly emerging market, consumers will be (and are) moving between specialty niches in patterns not understood by traditional market research.
We will need to use new methodologies that allow us to follow and identify the common threads and patterns that direct consumers in their journeys with in the marketplace.
Increasingly, those common threads and patterns will have as much (if not more) to do with lifestyle and consumption practices as they do easily identifiable consumer needs.
Those who best identify the themes, threads, connections and consumer will stand the best chance of success in this emerging marketplace.

Click here for

PART ONE: Re-Thinking Our Traditional Notion of the Mass Marketplace: What Happened to the Mass Market?

Comment »