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One of the problems caused by the inability to understand how it is necessary to think in a rapidly changing market phase, is the misunderstanding about the goodness of strategies that aim to offer extremely low prices.
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The question is that if it is true that Consumers are looking for a low price due to the recession, it is also true that this search for capacity to offer very low prices produces many negative side effects in a market that needs a new dimension of (real) sustainability: either for the Producers (ie allowing them, at least, to survive) and for the Users (a dimension which is based on an actually useful value that justifies the value of the Useful Value°).
That is, operating in search of the possibility of offering very low prices, there are problems due to the fact that:
● IT IS IN CONTROTENDENCE COMPARED WITH THE MARKET TRENDS that require the development of the most important product characteristics of its inexpensiveness; and that is a radical innovation that makes products more appealing for actual intrinsic qualities (it is a Value-oriented innovation°). Toward a New Marketing (1): Beyond the tools of the current Market // Trends Forecasting for the Disruption Age
< see The problems of the current Market: strategies: toward a crowd participated Marketing >
(the low price can still be a competitive advantage, but it is necessary to focus on the development of quality that make the products more sustainable, with an improvement of the characteristics such as: durability°, or the new Product as a Service° concept, the service that can be provided by the new generation of Smart products).
The fact is that if you want to develop winning strategies (or even survive in the market of the near future) you need to start thinking in disruptive mode°, abandoning the “linear” mindset°, and understand, for example, that in the new generation of products (characterized by a higher durability),
a higher initial price
may correspond to
a decidedly lower effective product price
(the product in this case has a life much higher than that of current generation products).
< see The misunderstanding on: “low-cost” is disruptive innovation >
● THE LOW PRICES THAT CAN OFFER THE E-COMMERCE AND THE HYPERMARKETS ENDS, PARADOXICALLY, TO CREATE SERIOUS PROBLEMS TO THE MARKET.
The fact is that if it is true that a lower price attracts the Consumer, this strategy can only work temporarily, until the truly disruptive products arrive on the market.
In other words, with such strategies it is possible to induce the Customer to buy the product only because they do not find products of better quality (able to really satisfy the needs of the New Demand°). And therefore, among low quality products, they obviously choose those with a lower price.
< see The misunderstanding on: “low-cost” is disruptive innovation >
But in this way the incumbents create problems that will emerge in the near future:
– they create a problem for themselves, because in this way they leave ample room for competition that is beginning to develop truly innovative (disruptive) strategies.
< see The great Firms are not able to develop disruptive innovation within them >
– they create a problem for the market in general, since they end up eliminating those characteristics of the market that can allow one of the forms of business required by the new Demand to be developed, that of the Local Business°.
The fact is that new Demand requires qualities (of the product and of distribution) that can not be obtained with the current e-commerce model (it is obsolete compared to the need for disruptive leap° required by the new Demand).
< see Disruption is a quantum leap that can not be predicted with statistics >
What is required is a disruption of the development of sales strategies in which the Local Commerce are recovered those Values based on the direct relationship of the Customer with the shopkeeper and with the product (obviously, a radically innovative sales method thanks to ICT and IoT).
To understand how the local commerce in small-business owners will be recovered in the future, it is obviously necessary to understand which trends are related to the more general development of local production < see The misunderstanding on Industry 4.0: towards Manufacturing 4.0 >, and Consumerism 2.0 based, among other things, on a transformation of the Consumer into Pro-sumer
In e-commerce it is necessary to understand how it is necessary to recover those valuea that can only be obtained by a disruptive innovation.
< see “A new Value proposition: the problem of ethical (ideological) values” >