Nicolas, Catherine; Ferraro, Carla --- "Living in a pressure cooker (Trends - the Australian consumer)" [2007] MonashBusRw 5; (2007) 3(1) Monash Business Review 22

Living in a pressure cooker
(Trends – the Australian consumer)

Catherine Nicolas, Carla Ferraro

The ‘Pressure Cooker Factor’ is a rising mega consumer trend, write Catherine Nicolas and Carla Ferraro. Consumer cycles such as this emerge so rapidly now that organisations must be able to recognise and optimise them to not only get maximum advantage, but also to survive.

Consumer trend cycles, fuelled by technology, accelerated social diffusion and instantaneous communication, are now emerging faster than ever before. They are bold, dynamic and impact on every aspect of the consumer buying process from need recognition to pre-purchase search, through to purchase and final evaluation. A notable innovation in response to this shift is by Spanish fashion retailer Zara which has identified a recent trend in its infancy and rolled out a mass solution.

Rather than guess what consumers may want in six to nine months, Zara reacts to what they want now. Store managers report daily on what customers are buying, disliking and asking for and based on this information, Zara makes deliveries to each of its 400 stores around the world every few days. Rather than making 200 or 300 different products a year, it releases more than 11,000 a year. It does not overstock and unsuccessful designs can be removed after a week. This unique approach provides a distinctive competitive advantage and is now an industry benchmark.

In order to achieve a competitive advantage, organisations must identify, like Zara, emerging trends before they reach the entire market. Most often, the more developed markets, such as the US and UK, are a good point of reference as experience suggests that consumer trends make their way around the globe following a path from the US or UK and then to Australia.

However, relying on the Australian market place to mirror patterns in overseas markets can be risky as (a) the trend may never arrive or may arrive only in a diluted form, and (b) the trend may take on a unique and distinct flavour. Therefore, while it is crucial to keep a careful eye on the international market, greater attention needs to be placed on identifying and tracking Australian customers. Attention must be paid to the demands of early adopters before they culminate into a mass cry for change.

The pressure cooker factor

The ACRS Australian Consumer Trends Report by the Australian Centre for Retail Studies provides organisations with insight into a major trend it calls the ‘Pressure Cooker Factor’. With increasing use of mobiles, laptops, BlackBerries and email, consumers are now accessible anywhere, at anytime. The breakdown of family structures, changing work patterns, less leisure time, increased time spent travelling and commuting and daily routines becoming less planned all impact on how we shop. Convenience and time are major factors for consumers who now value speed, simplicity and convenience.

A symptom of this increasingly demanding lifestyle is the ‘death of the weekend’. As the line between work and rest has become blurred, the traditional weekend is being eroded by the relentless demands of 21^st century life. Australian Bureau of Statistics figures show that in November 2003, 29 per cent of Australians reported working on weekends in addition to Monday to Friday.

The implication is that the opportunity to disconnect, particularly from work, will become increasingly important. As a consequence of the desire for leisure time and activity, the demand for recreation products is also likely to grow. Retailers can take advantage of this trend by finding ways to give busy customers increased convenience and time savings. Simply put, today’s shoppers need to be able to achieve more while shopping. In response to the need for added convenience, some retailers have also begun incorporating new services, such as banks, florists, pharmacies and video rental. Interior designs and floor layouts may also need review for easier access and improved ambience.

The tyranny of too much choice

Research suggests that while an increased product range is initially attractive, it can end up being confusing, unsatisfying and de-motivating. It is not surprising then that consumers are choosing to spend less time per shopping trip and are doing more ‘top-up’ or ‘replenishment’ shopping particularly for fresh produce and groceries. People now shop at supermarkets and food stores daily compared to a few years ago, when they typically made a large weekly shop with top-ups at the convenience store in emergencies.

Taking advantage of these trends

To save time, consumers are increasingly drawn to retail formats that offer everything easily and efficiently like online where there’s more variety, it’s quick and there are no queues. Online retail sales are increasing 15 times faster than the retail average. According to Nielsen/NetRatings, Australians spent $2.4 billion online in the three months to December 2005. The most popular items include flights and accommodation, books, movie tickets, sporting/concert tickets, car hire and electronics.

Successful organisations are currently using research and technology to ensure that their products and services best match customer needs and wants. Companies that can find new and unique ways to push products and/or services on a global and local scale are best placed to exploit the move towards convenience and time savings. This also presents major implications for advertisers, marketers and policymakers alike who need new approaches to reach today’s multi-tasking consumer also suffering from information overload or ‘hyperchoice’.

Compounding the challenge for retail in the years ahead is an increasingly inscrutable consumer: more difficult to understand and much less predictable. The changing nature of consumer trends also means that organisations need to become more observant and better prepared when making strategic decisions. In doing so, they must identify and track emerging trends and determine their implications for effective planning, and construct plans to take advantage of the opportunities. This will ensure that consumers are always provided with what they want, rather than what organisations think they want.

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Cite this article as

Nicolas, Catherine; Ferraro, Carla. 'Living in a pressure cooker'. Monash Business Review. 2007.; Monash University ePress: Victoria, Australia. http://www.epress.monash.edu.au/. : 22–24. DOI:10.2104/mbr07005

About the authors

Catherine Nicolas

Catherine Nicolas is a Research Analyst at the Australian Centre for Retail Studies, Monash University.

Carla Ferraro

Catherine Nicolas is a Research Analyst at the Australian Centre for Retail Studies, Monash University.