Friday, 9 December 2011

Three social media challenges for the consumer rights movement

Richard Bates, of the UK’s Consumer Focus, on how new consumer empowerment is changing the role of consumer rights bodies.

In an era where consumers have a voice and are not afraid to use it, what’s the role of a body that claims to be the voice of the consumer?

Remember the 20th century? Such question wouldn’t have arisen then. We didn’t necessarily like it, but as consumers we knew our place. For the most part, we were isolated individuals, stranded at the receiving end – literally – of mass production, hyped by mass marketing, reaching us through mass media. Of course, we were frustrated when the reality of products and services didn’t marry up with the promise, but our only hope of resolution lay at the outer reaches of a customer ‘support’ labyrinth. Our best chance of sharing experiences widely with our peers lay in having a tale of woe that was extraordinary enough for the press to show an interest.

The mission of consumer bodies was clear too: work on behalf of consumers to expose problems, propose solutions and ensure government, regulators and business took heed.

Just one decade into the 21st century, and the old certainties are falling apart. According to market research agency Forrester, we now live in the ‘age of the customer’, where a company’s success depends on its 'engaging with empowered consumers'.

When Unilever CEO, Paul Polman, talks about consumers being able to “bring us down in nanoseconds” you start to think Forrester might be on to something.

The balance is being tipped in favour of consumers by social media. Connected and part of the conversation, we’re fast evolving from passive recipients, to active participants in the media of the masses. As Clay Shirky puts it in Here Comes Everybody, consumers talk back to businesses and speak out to the general public, and can do so en masse and in coordinated ways.

The upshot is dynamic new approaches to consumer empowerment. Three themes I’d pick out as having considerable impact, both individually and in combination, are:

(1) Brands in our hands: where connected consumers share experiences, feedback and information in ways that make brand transparency inevitable. If a brand doesn’t live up to its promises, Polman’s prophecy comes to pass.

(2) Get it, together: where connected consumers aggregate and synchronise their buying power to achieve better value and/or social and environmental goals. High opportunity and transaction costs used to ensure this was difficult to the point of prohibitive, but technology has eroded those costs and ignited an explosion of activity in this space: ranging from the Chinese ‘team buying’ phenomenon of tuangou, to Carrotmob.

(3) We can do this: where the growth of peer-to-peer marketplaces and collaboration is posing a challenge to incumbent providers in some sectors – Zopa, the peer-to-peer lending platform being one such example.

None of these innovations can be traced back to the consumer ‘establishment’. Instead, their origins are with entrepreneurs who have capitalised on the opportunity to offer intermediary platforms that make new approaches possible; or with civic-minded developers, such as in the UK; or, as with Australia’s Vodafail, consumers speaking back directly and with real impact.

So, is the traditional consumer body surplus to requirements? Well, no. In an age of consumer voice, many remain voiceless and in need of representation. There’s also an ongoing need to fight the consumer corner when complex decisions are made in regulated markets, especially long-term policy decisions. Technology that presents new opportunities also presents new risks – at least 50 of them according to a project we have underway to identify and pre-empt sources of ‘digital detriment’.

But, we have to extend our capabilities to harness new opportunities for tackling old problems, and do so in ways that see us collaborate with and work through the actions and decisions of consumers themselves. Otherwise, that ‘traditional’ prefix will challenge our relevance, as more fleet-footed, innovative actors become useful to consumers and start to command the space.

Finally, given the number of contentious issues on the horizon – how we meet costs of a sustainable future, for example – there’s perhaps another question we should all be considering: when a body acting in the consumer interest takes a divergent view to a vocal mass of consumers acting in the, erm, consumer interest, who’s right?

Richard Bates leads the Consumer Empowerment Programme at Consumer Focus, the UK’s statutory consumer body. The Programme is focused on analysing, developing and promoting innovative approaches to consumer empowerment.

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