Practice papers all power to the consumer? Complexity and choice in consumers' lives

Keywords:

Affluence, brand,

consumer choice,

diversification,

consumer

empowerment,

identity

William NelsonThe Future

Foundation,

70 Cowcross Street,

London ECIM 6EJ,

UK

Tel: +44 (0)20 7250

3343

Fax: +44 (0)20 7251

8138

E-mail: williamn@

futurefoundation.net

PRACTICE PAPERS

All power to the consumer?Complexity and choice inconsumers’ livesReceived in (revised form): 27th August, 2002

William Nelsonis Analysis Manager for nVision, The Future Foundation’s online database of social

and economic trends. The Future Foundation is a future-orientated commercial think-

tank that advises companies on better ways to understand and communicate with

their customer base.

AbstractThis paper draws together selected insights from a range of projects, primarily the FutureFoundation’s ‘Complicated Lives’ research programme for Abbey National. Unlessotherwise sourced, all findings in this paper are based on Complicated Lives 1 & 2 (2001,2002) The author also draws on research sponsored by a range of clients includingAnanova (the future of news), First Direct (e-service monitor, nPower (drivers for onlinebill payment) as well as nVision’s own Changing Lives ongoing programme of research.This paper is based on a chapter of a forthcoming book, Complicated Lives, due to bepublished in 2003.

INTRODUCTION

Consumer choice is notonlyone of the

fundamental principles of modern

Western society, it isalso, as a tangible

phenomenon, one of the starkest

differences betweenthe West today and

less advantaged societies. The

supermarket in communist Russia selling

only thousands of pairsof size eightgreen

Wellington boots andthe relentlessly

basic diet of most of the world’s

population throw into sharprelief, our

own efflorescence of consumables,

heapedeight feet high down endless

thousands of miles of shelving.

It is likely that the majority of our

readers are well aware of an increase in

the number and specificity of products in

the markets they are usually concerned

with. Yet, what seems an almost

mundanely obvious aspect of modern

life in any one instance becomes an

urgent problem when we see it in

totality, and in a historical context. More

open and competitive markets, greater

fragmentation and individualisation,

and increased spending power have

vastly increased the range of choices

available to people. The scale and

complexity of choice is the subject of an

exponential growth that has taken

consumers into a new landscape,

unrecognisable a generation ago, where

choices stretch beyond the horizon,

dwarfing our ability to survey and select.

The freedom to choose as consumers,

has a long and venerable history in

political philosophy. But, and this is

perhaps the crux of the problem,

enthusiasm for choice has always been

predicated on the consumer’s ability to

independently find the best deal in the

marketplace. This is what Adam Smith

(1981) assumed when he said of

competition that:

‘It can never hurt either the consumer, orthe producer. . . . Some [traders], perhaps,may sometimes decoy a weak customer to

Journal of Consumer Behaviour Vol. 2, 2, 185–195 Henry Stewart Publications 1472-0817 185

buy what he has no occasion for. Thisevil, however, is of too little importance todeserve the public attention, nor would itnecessarily be prevented by restrictingtheir numbers’.

When the Thatcher government of the

1980s proclaimed that the expansion

consumer choice was central to their

mission, they reflected the same

enthusiasm. But neither Smith, or

perhaps even the policymakers of the

early 1980s, can have forseen a world in

which markets have become so complex

that choosing itself might cost the

consumer more than any value they

might derive from the process of

comparison. Time and information are

now essential elements of any analysis

of modern consumption, and consumers

and regulators alike are beginning to

develop responses to over-complicated

markets. Businesses too are responding,

but innovation is limited, and there is a

danger that companies’ attempts to

communicate with consumers will

disappear into the ‘white noise’ of the

general marketing effort. Now we have

claimed that consumer choice has

exploded across the board, not merely

in a few markets. This remains to be

demonstrated.

THE CHOICE EXPLOSION

The High Street

We have found clear evidence that the

range of choices surrounding consumers

is increasing across the board. In many

cases, that increase has been nothing less

than an explosion of choice. The most

obvious place to look is the high street. In

grocery retailing, the local grocer has

given way to the supermarket, and

supermarkets have grown into

hypermarkets, in some cases stocking

more than 70,000 product lines. The great

majority of choices in this environment

have sprung up relatively recently. To

take one example, Tesco, the average

number of lines per store has grown from

a mere 5,000 in 1983 to over 40,000 today

(despite the recent ‘return to the high

street’ of major supermarket chains).

Bookshops have followed a similar

pattern, and are now stocking as many as

200,000 titles. A visit to a Boots store

discovered 14 different types of dental

floss on offer. Even stopping to get a cup

of coffee may present us with more

choices than we would like to confront.

Coffee Republic offers 11 types of coffee,

four added toppings, three types of milk

and sugar, three sizes of cup, and the

options of decaffeinated and/or extra

cream. In all, that is over 6,000 different

permutations of a cup of coffee!

The proliferation of competing

products across so many product areas

reflects an ever-greater elaboration on

basic products, with ever-smaller

functional niches being filled by

manufacturers, made possible by

increasingly flexible manufacturing

processes and steadily increasing

consumer spending. One example

would be cleaning products. Where the

Victorian housewife or maid knew 20

different applications for vinegar as a

cleaning product, we now see separate

products have emerged for use on

floors, windows, bathrooms, toilets,

kitchens, ovens — in the form of

creams, mousses, wipes and sprays, all

of course in a range of scents and

finishes and with various anti-bacterial

properties. Our research found that the

average household now has more than

six different types of cleaning product.

But this is a very generalised

phenomenon — we see increasing

diversity in basic foods, with economy

and premium versions of the same

basic products now being joined by

organic, low fat, nutrient-enriched and

otherwise health-enhancing variations.

Clothing too increasingly diversifies in

form and function, with technical fibres

now producing body-shaping, non-

creasing, quick-drying, extra-insulated

or waterproof variants of everyday

garments. Of course, the proliferation

of choice on the high street has not

happened in a vacuum.

Our lifestyles and expectations have

altered as dramatically as the range of

186 Journal of Consumer Behaviour Vol. 2, 2, 185–195 Henry Stewart Publications 1472-0817

William Nelson

goods on offer to us. Things were not

always this way. One of our

interviewees, a woman in her 70s,

brought this home to us:

‘In my day, we just had roast on Sunday,rissoles on Monday, a shepherds pie orsomething on Tuesday, fish on Fridays —every day you knew what you weregoing to eat. You didn’t eat things likechicken — that was a luxury, there wasless choice.’ (Woman, social grade AB,70s)

This sort of routine consumption has

largely disappeared from daily life.

Spending on meals bought away from

home has risen from 11 per cent of

food expenditure in 1968 to around 25

per cent today (Family Expenditure

Survey, 2001). A far greater range of

food is eaten, increasingly often

encompassing the traditional dishes of

other cultures. It has been reported

that London’s restaurants now offer

the cuisine of over 150 different

nations and regions.

Clothing exhibits an even more

dramatic trend in terms of the

‘domestication’ of product choice. Where

underwear is concerned, we know that

the quantity purchased each year has

risen to five times the amount bought in

the 1950s (Future Foundation/Pretty

Polly, 2001), and qualitative research

suggests that the trend in other clothing is

at least as dramatic. Another woman

from the older generation told us:

‘In my wardrobe, I had (in the fifties) myeveryday clothes, skirts, sweaters andblouses, and my Sunday clothes, one coat,two pairs of shoes and a best dress’.(Woman, AB, 70s)

Compare this with a 20-year-old woman

we spoke to (although the quantity of

possessions people have has increased

across the board, this seems to be no

guarantee of satisfaction):

‘I have so many clothes, I’ve got nowhereto put them . . .but I’ve still got nothing towear!’ (Woman, social grade AB, 20)

It is an indicator of how much more

affluent the UK has become that we

have so many more clothes, despite the

fact that clothing now accounts for a

significantly smaller proportion of

overall expenditure.

But choices do not stop at the shops

and in our homes. In recent years,

choices have become available in energy

and telecoms suppliers, media

providers and schools, all of which

barely existed little more than a decade

ago. These represent a huge increase in

the overall complexity of consumers’

experience of choice.

Choosing News: An Explosion of

Media Output

Just 20 years ago (1980s), the average

UK consumer could choose between

three channels on television. Today,

there are around 300 channels

broadcasting to the UK and subscribers

with the necessary equipment may in

principle choose between any of them.

Recent upheavals mean even the free-

to-air offer will provide UK consumers

with a selection of some 14 channels.

In our study of trends in the

production of national news for

Ananova, we surveyed news

production in national newspapers,

television and radio, in 1980 and today

(Future Foundation/Ananova, 2000).

We can dramatise our findings with a

little fable.

In 1980, there lived a man who was

obsessed with knowing what was

happening in the world. He armed

himself with the necessary recording

devices, and assiduously read every

word of every national newspaper,

listened to every scrap of news on

national radio stations and watched

every minute of news broadcast on

television. The poor fellow slept only

half an hour a night, and had to

dedicate every remaining second of his

days to consuming news. But he took

comfort in the assurance that he was

abreast of current affairs. Two decades

later, our ardent news fan emerges from

some institution, only to fall straight


Complexity and choice in consumers’ lives

back into the clutches of his obsession.

After two and half weeks of continuous

watching, reading and listening, our

red-eyed news hog has finally been

through every bit of national news

produced on the day of his release. Alas,

in the meantime, almost 7,300 hours

worth of news has been produced. This

will take our budding omniscient more

than 300 further days to consume, if he

can stay awake that long. A year of such

thorough and continuous information

consumption will leave him more than

11 months out of date. By the time

someone tells him that these days you

can get news on the Internet,1 we must

hope that he is safely back in the care of

more selective information gatherers.

If this explosion of news production

seems striking, bear in mind that the

growth in public affairs material in the

media mentioned has been far

outstripped by the growth in non-public

affairs material, encompassing sport,

entertainment and ‘advertorial’ content.

Consider also the explanation for this

shift of emphasis in the mainstream

news, the massive growth of the

‘consumer magazine’ sector since the

1970s, and we can see that media choices,

and within these, potential sources of

consumer information, have proliferated

in a relatively short period into a

landscape of choices without a horizon.

New Choices: The Utilities Market

Perhaps more striking still is the

emergence of a multitude of choices in

markets, where recently there was none

at all. The utilities market is a

particularly interesting one to look at in

terms of choice, for just 20 years ago

(1980s) there was effectively no

consumer choice in the UK for gas,

electricity or telecommunications, the

nascent car phone market being an

extremely limited exception.

At the time of our study for nPower

(Future Foundation/nPower, 2000) there

was a choice for the average consumer of

16 electricity suppliers, 22 gas suppliers,

and 7 telecoms suppliers (we include

here the mobile service providers, and

the minimum number of fixed-line

suppliers available to UK consumers).2

Independently selecting suppliers for

each service would mean a total of

nearly two and a half thousand possible

utilities solutions. And this is, of course,

only at the level of the supplier. Each

supplier has multiple tariffs, incentives

and offers that make price comparisons

extremely difficult and of only very

temporary validity (whether or not they

are actually designed to do this, as has

been suggested by a source inside the

industry). The mobile phone market also

exhibits this complexification of pricing.

Although only a relatively small number

of companies offer services, the number

of different payment tariffs on offer has

multiplied twenty-fold in the past 7

years alone.

The public were asked two very

revealing questions. First, how many

energy suppliers did they think existed?

The average here was 12, which

suggests that the average consumer

underestimated the number of

competitors in the market by more than

half — the true figure was actually 28

different suppliers. This illustrates one

point about choice proliferation — that

consumers have remained completely

unaware of many of their supposed

‘options’. Perhaps more importantly,

respondents were also asked what they

would consider as an ideal number of

suppliers to choose between. The

average here was just 6 to 7 suppliers.

Where the utilities are concerned (and

we think this finding has a much

broader significance), consumers

positively want to have less choice than

is actually out there.

Contextualising Consumer

Choice/Life Choices

If all this choice were not exhausting

enough, to properly contextualise

consumer’s decision-making process,

marketers must consider not only the

totality of consumer choices that must

be made, both within and outside their


William Nelson

particular market, but also all the other

decisions and negotiations that

characterise life in a time of rapid and

ongoing social change. There are three

trends that arguably make choosing

more pressurised, regardless of the

increase in commercial offers.

First, at every level we have many more

choices to make in our lives. Increasing

freedom from traditional roles, be they

related to age, gender or social

background gives us more to think about.

The majority of parents now agonise

about their choice of school, where in past

generations the automatic assumption

for most was simply the most local.

Increasing home ownership brings a

whole realm of choices and

considerations to millions of families

who would have rented a generation ago.

More fluid and flexible relationships

make personal lives more transitional

and subject to choice. With all these wider

life choices also on the increase, it would

be reasonable to assume that there is less

time for worrying about everyday

consumption choices.

Secondly, the movement towards

economic equality and independent

consumption within households, has

seen the role of ‘specialist’ consumer for

the whole household become less likely

to be the preserve of one family

member. The wealth of experience and

trained intuitions of the lifelong

housewife are disappearing, at the same

time as more economically powerful

and independent female consumers

enter many traditionally male-

orientated markets such as financial

services and the car market.

Lastly, even where one person is still

responsible for household shopping,

wider social trends make life more

difficult. With the democratisation of

the family has come an individualisation

of consumption, making the family

shopping all the more complicated:

‘I have to get different sorts of cereal foreveryone, different sorts of shampoo,different sorts of coffee’ (Woman, socialgrade AB, 40s)

Our consumer research reveals that the

average household now has three

different types of shampoo and three

different breakfast cereals, with a

general tendency for younger people to

have a greater range of these products

than older people.

HOW IS TODAY’S CONSUMER

HANDLING CHOICE?

Understanding Consumer Decision

Making

It is hoped that we have here convinced

you that today’s consumer stands in a

more ambiguous relationship to choice

than those of the 1980s, ie 20 years ago.

It is by no means our intention to

portray the consumer as the bedazzled

victim of corporations and marketers,

but it is essential to go beyond the

caricature of the ‘all powerful

consumer’. The issue that has to be

focused on is the extent to which ‘choice

overload’ may be occurring in the

general perception and specific

experiences of consumers and how

consumer’s choice processes will evolve

in this environment.

What is the evidence from survey

research? On a general level, only a

minority (around 40 per cent), say that

they prefer a lot of alternatives to a few

alternatives when making choices.

Similarly, only a minority will agree that

they do not mind living with the

increasing complexity of life. Three

quarters of the population say that they

often feel under time pressure (Future

Foundation/nVision, 2001-2). This is the

paradox of progress: the widespread

perception is that life is more stressful;

the pace is quickening and everything is

more complex.

These findings certainly cohere with

evidence from research on the

psychology of decision making. People

approach abstract decisions with limited

attention and pre-conditioned

strategies, and when presented with

complex information, they may fall back

on these strategies to the exclusion of



other possible considerations and

approaches.

Interpreting consumers’ choice

processes as irrational is the easy

option, and rarely yields useful insights.

Considering them ‘apathetic’ (as many

political commentators do) is still less

sensitive to real life. No, we are not

data-crunching calculating machines,

and consumer competence is not evenly

distributed between people or

situations, yet we are never ultimately

unreasonable decision makers

(Bourdieu, 1997). If consumers handle

impossibly demanding choice situations

with selective attention and pre-

conceived choice strategies, it is

precisely because they are reasonable,

and have, quite rightly, better things to

spend time on than the minutiae of

product information and the

mathematics of value.

We have to accept that these days,

there are few markets in which a

reasonable person would do what is

necessary to make ‘optimal’

consumption choices. As rational choice

theorist Jon Elster points out in

Solomonic Judgements (Elster, 1989),

making optimally rational choices does

not only requires access to options, but

also the necessary time and information

needed to choose. Spending too much

time gathering information on a

relatively insignificant choice is a form

of irrational ‘hyper-rationality’, yet for

many years, choice theorists in the field

of economics constructed models that

ignored these critical dimensions.

Apparent inadequacy on the part of

consumers is more often than not an

inadequate understanding of their lives

and motivations.

Managing Choice: How Consumers

Cope

Our qualitative research revealed a

range of different strategies that

consumers employ to deal with choice.

Trusted brands obviously play a very

important role here, and they will

continue to do so. Before we return to

this, some interesting other approaches

to managing choice have emerged. It

seems that the more choices we have to

make, the more inventive we have to be

to manage them all.

And here we encounter a dizzying

new dimension of consumer choice. A

huge additional burden of consideration

has fallen onto consumers as ethical,

ecological and health considerations are

brought to bear upon consumption

choices. Is this product safe? Is it

ethical? Consumption choices today are

subject to interventions from the media,

academia and pressure groups that have

vastly increased in volume and

visibility. These ‘additional’

considerations however, can be used to

limit choice as well as making it more

complex.

While all our respondents recognised

the expansion of choice as a potential

difficulty, the majority spontaneously

pointed to various ways in which they

‘self-limited’ the choices on offer to

them. Routine re-purchasing was the

most obvious way of doing this, and we

can see a parallel between this and the

widespread use of ‘the ostrich

technique’ for managing choice in

markets where choice is relatively new

— consumers simply ignore it

altogether. But one respondent

mentioned only buying organic food as

a way she managed the choice on offer:

‘I only eat organic food — that makes it abit easier — at least I don’t have to thinkwith that . . . I used to end up with atrolley piled high with things, now if Ijust go for organic I buy less’ (Woman,social grade AB, 40s)

Another said that his habit of only

buying reduced items was as much

about not having to think about what to

buy as it was about price savings.

Similarly, some investors may plump

for an ethical option, because that

guarantees some ‘value’ to the

investment without having to confront

the difficulty of finding the optimal

investment solution.


William Nelson

THE UTILITIES: A CASE STUDY OF

CONSUMER EMPOWERMENT?

This said, more than 40 per cent of

energy customers have switched

supplier since deregulation, so the range

of choice in this market has not led to a

lack of consumer engagement and

dominance by incumbent suppliers.

After all, this is one market where price

should be more or less the only criterion

for choosing a supplier, with the

product identical and servicing in the

hands of a separate body. So how far

does this signal the emergence of

empowered consumers who are actively

engaging with choice in the utilities

market? Data from Ofgem’s 2001 study,

‘Experience of the competitive domestic

electricity and gas markets’ suggests the

answer to this is ‘not very far at all’.

Ann Robinson, Chair of Energywatch,

has said ‘doorstep complaints . . . are

still far too high. We must not forget

that abuses of doorstep selling often

mean salespeople lying, bullying and

forging their way to better sales figures’.

Fully 20 per cent of people who have

changed their supplier mentioned

friendly or persuasive salespeople as a

reason that they changed supplier.

However, three-quarters of switchers

will admit to being visited by a

salesperson, and we suspect that people

will be more likely to name price

savings than persuasion where there is

any ambiguity. And there is ambiguity

aplenty. How many people who

switched supplier had been able to

make their own comparison of prices?

Just 51 per cent — the rest had to take

on trust the promotional material of

their new supplier. Among everyone

who had come across pricing

information, the great majority were

dependent on current or prospective

suppliers. Although 27 per cent had

seen pricing information in the media, a

mere 5 per cent had consulted Which?

magazine, just 4 per cent had been to a

website that compares prices, and only 1

per cent had obtained a factsheet from

Ofgem. Clearly, up-to-date and

genuinely impartial advice is rarely

found by utilities consumers. Not

surprisingly, the more ‘empowered’

consumers here were significantly more

likely to be high-income earners. A total

of 42 per cent of all high income earners

had made their own price comparisons,

against only 28 per cent of those in

social grade E (Ofgem/MORI, 2001).

Therefore, experience of the utilities

market thus far suggests that marketing

muscle is counting for more than

providing impartial information and

better value to the consumer.

What is the moral of this tale? When,

in even the most apparently suitable of

markets, consumers largely fail to

embrace their expanded choices in a

proactive way, should we not simply

accept that the winners will be the

companies who out-market the

competition? Or do we attempt to limit

consumer choice — to wind back the

clock a couple of decades?

We think both these responses are

potentially fatal to businesses. We need

to accept that with increasing affluence,

the desire for individualisation and

ongoing globalisation of markets, an

absurd proliferation of choice is

probably here to stay. Attempting to

deny or limit consumers’ choices will be

increasingly less effective, as those who

help consumers access or manage choice

more effectively, prosper. Over the next

decade, we predict that choice

management brands and retailers can

do well, retailers and service providers

who make use of ICTs to empower

consumers will benefit, and that in

many sectors sustained best-value offers

will become harder to compete against.

Consumer empowerment is an

unrealised opportunity.

Yet, there seems to be a culture within

some companies that finds the reality of

consumer empowerment hard to come

to terms with. In financial services, the

tiny minority of consumers who do

vigilantly move their funds to obtain the

best returns are labelled ‘rate-whores’ or

‘rate-hogs’ — one almost gets the sense



that getting the best deal out of

companies is some kind of cheating, the

practice of a tiny ‘rogue element’ in the

marketplace. Companies need to

respond more positively than this to the

problem of consumer choice. Consumers

and regulators,3 aided by technology,

are going to evolve responses to the

choice explosion, partly with the help of

companies who realise that this is the

only way to prosper from the situation.

THE VALUE OF CHOICE MANAGEMENT

What is the value of helping consumers

to get the best deal? Again, research in

the utilities market has generated a

useful finding (Ofgem/MORI, 2001).

Energy customers who had never

switched supplier were asked what level

of price saving would persuade them to

switch. The average amount was no less

than £78, a good day’s wages. If this

figure is any measure of the value of the

perceived risks, time and effort required

to engage with choosing a new supplier,

then it is also some measure of the

potential value of choice management

services in the utilities.

Now, there are bound to be a variety

of factors that affect the desire of

consumers to take on choice, and by

extension, the value of choice

management services, and these will

vary in their importance to different

markets and consumers. It is worth

sketching out what some of the factors

affecting the value of choice

management will be.

First, the value of a consumer’s time.

We could be underestimating the

economic value of time by half unless

we factor in the value of unpaid labour,

as National Statistics are now

experimenting with doing in their

household satellite accounts.4

Second, there is the enjoyment of

process or experience of choosing. Most

obviously, this depends upon the

immediate qualities of a retail

environment. But enjoyment relates to

choice management in a more subtle

way where consumers invest identity

and leisure time in developing

knowledge in a product area. Such

consumers may not want choice taken

out of their hands at all — here the issue

will be facilitating their own process of

choosing, and creating and distributing

useful information. Furthermore,

enjoyment relates back to time. As James

Gleik points out, enjoyment of a

situation is strongly related to

perception of time (Gleik, 2000), and of

course it is perceived duration that really

matters. This is to say that speedy service

and consumer enjoyment, or the lack of

them, will multiply the effect of one

another. Where both are lacking, choice

management will be highly attractive.

Third, the consumer’s previous

experience. The greater this is, the more

confident or proud a consumer will be

of making their own choices. The same

points made about the relation of

consumer’s enjoyment to a more

‘facilitating’ approach to choice

management apply here. It is possible

however, for an experienced consumer

to enjoy engagement with choice or not,

and vice versa, so these factors need

separate consideration.

Fourth, the perceived risk of engaging

in choice at all, where a habitual

preference or current provider exists, or

where alternative choices have unstable

pricing (eg interest rates or utility rates)

or unknown quality. This is where

genuinely trusted brands acting as

proxy for the consumer, or as editors of

choice, will attract customers.

Last, there is the perceived

differential between products or

services in a sector. Significant

differentials in price savings or

functionality will make choice

management more attractive, but do not

obviously dictate the part the consumer

wants to play in the choosing process.

Big symbolic differentials between

products, for example in the clothing

market, pose more of a problem for

choice managers. Significance to

individual identity means choice

management has to play a relatively


William Nelson

more facilitating role, and be closely

attuned to individual preference.

Generally, where perceived

differentials are low or non-existent, a

choice management service or function

will not command much value, but

consumers may be more inclined to

delegate choice to a trusted (or merely

familiar) brand for that very reason.

Where differentials are higher, the

rewards for being a choice manager will

be that much higher, as are the demands

in terms of trust.

Thinking about these various factors

has illustrated the point that there are

completely different modes of choice-

management appropriate to different

markets, situations, or consumers. The

remainder of this discussion will focus

on two broadly different but by no

means exclusive responses to choice

management: we can call them

facilitating consumers choice, and

representing consumers choice. Our

readers can decide which apply to

which of their markets and

consumers, based on the

considerations above.

Facilitating Active Choice

Management

Facilitating active choice management

on the part of the consumer is one

strategy; this means providing readily

accessible, relevant and comparable

information about products to

consumers. This will appeal when time

cost is low, or interest high, where

product differentials (especially

symbolic ones) are seen as significant.

At the same time as choosing

becomes more complex, the consumer’s

ability to interpret and pass on

information is growing. Rising levels of

education and diminishing illiteracy

and innumeracy rates have produced a

population where almost everyone has

the basic competences of consumerism,

and more analytical, reflexive and

critical modes of thinking are becoming

increasingly common.

The explosion of media content and

channels undoubtedly means that more

information is available, yet at present,

it is rarely actively managed by

consumers, who are largely dependent

on broadly ‘advertorial’ content for

consumer information. Technological

developments will have a huge impact

in this area, however. The key difference

the Internet makes is not in information

production (there is plenty in any case),

but in information access and still more

importantly information management by

individuals. And by 2010, 90 per cent of

people will have Internet access through

PC, TV, or mobile (nVision Forecast,

2002).

This said, price comparison services,

being always available and updatable,

should have been the consumer’s holy

grail in the utilities market. Yet we saw

that getting pricing information was still

overwhelming reactive rather than

proactive in this market. The same

clearly applies to financial services,

despite the fact that a good chunk of the

population already have access to the

Internet. But, it is still very early days in

the technical evolution of Internet-based

consumer support services and it would

be extremely unwise to think that such

scarcity of use is any indicator for the

future.

Our research (Future Foundation/

nVision, 1996) reveals that there is a

very strong relation between experience

of the Internet and participation in

particular types of online activity.

Certain activities, such as

communication and entertainment, are

taken up by the great majority of users

within the first 6 months. But it is 2–3

years before the percentage engaging in

consumer activity (aside from simple

information gathering) really begins to

climb, and that proportion is still rising

among people online for 5 years or

more. The implication of this is that up

to now we only have a very small

proportion of the population with

enough familiarity with the Internet to

really engage with consumer

information management at present, but



a fairly rapid growth in their numbers

should be expected imminently.

In the near future, online retailers

who effectively harness the information

managing power of the technology by

enabling customers to ‘filter’ products

against any or all of a range of criteria

(price, qualities, brand, ethical status,

dietary restrictions etc.) will give many

consumers a power that the high street

will never be able to supply. Looking

somewhat further ahead, the

development of shopping software and

intelligent agents are intriguing

prospects, which could increase

consumers’ ability to manage their own

choices exponentially.

REPRESENTING CONSUMERS’ CHOICE:

CHOICE MANAGEMENT AND CHOICE

MANAGEMENT BRANDS

Where consumers’ time and enjoyment

are in short supply, they will

increasingly want to have their choice

edited or chosen for them by third

parties. In this sense, trusted brands will

be in a strong position to have

consumers’ choices ‘delegated’ to them

in this way, and we expect ongoing

diversification of the range of products

that are offered under the banner of the

big brand names who get it right.

In retailing, the role of the retailer will

shift where global trading reaches direct

to the doorsteps of consumers. The

connoisseur could theoretically choose

between an almost infinite range of

products in many sectors. The concept

of broad choice in a supermarket or

other outlet becomes less salient in such

a world. Instead of professing to

maximise choice as many still do,

retailers may position themselves more

explicitly as trusted editors of choice in

a world where choice is limitless.

But the role of choice manager for the

consumer is not an easy one to master.

When a consumer consciously delegates

choice, whether in a legal or emotional

sense, the brand or company becomes the

representative of that consumer’s

interests. Choice management in this

sense can be controversial, especially

where independence is questionable. The

ongoing furore over reforms to the

financial advice industry illustrates how

far many sectors are from providing

consumers with independent choice

managers in which they can have

confidence.

Certain markets may be overcrowded

with brands who differentiate their

image more clearly than their product,

who over-claim on their ‘personality’

and its significance to the consumer. A

brand explicitly positioned as a ‘choice

management’ brand will simplify, not

increase the amount of baggage that it

brings with it. Its primary function is a

mark of trust rather than a mark of the

consumer’s identity. But, what exactly

can it mean for consumers to trust a

company or brand to represent their

interests? This takes us on finally, to the

ways in which companies can ‘assure’

consumer choice.

In certain markets, especially perhaps

financial, where the difference between

offers is in principle easily quantifiable,

there is certainly a growing opportunity

for companies who promise to provide

consumers with the best value offer that

is sustainable in the long term, or to

promise to match the best available offer

on the market.

Where best value is assured, the

marketing effort can focus on providing

an overview of your market that

demonstrates your brand to be best, or

fostering (and directing consumers to)

independent sources of evaluation who

will confirm this to be the case. Where

consumers have confidence in the value

of the offer, word-of-mouth

recommendation can be an extremely

powerful force, especially as it is

increasingly possible for personal

communications to be integrated with

commercial or independent sources of

information.

Doubtless these ideas are merely the

tip of the iceberg when it comes to

helping consumers manage choice, and

this an area where serious strategic


William Nelson

thinking will be called for. But the

problem of consumer choice is now so

vast, and the politics of choice

management changing so rapidly, that

companies may be made or broken by

their response to these issues.

#William Nelson 2002

REFERENCES

Bourdieu, P. (1997) ‘Outline of a Theory of

Practice’, Cambridge University Press,

Cambridge, UK, pp. 3-30. See also

Bourdieu, P. and Waquant, L. J. D. (1996)

‘An Invitation to Reflexive Sociology’,

Polity Press, Cambridge, UK, pp. 120-121.

Elster, J. (1989) ‘Solomonic Judgements:

Studies in the Limitation of Rationality’,

Cambridge University Press, Cambridge,

UK.

Family Expenditure Survey (2001), HMSO,

London, UK.

Gleik, J. (2000) ‘Faster — The Acceleration of

just about Everything, Abacus, London,

UK, p. 28.

nVision Forecast (2002).

Ofgem/MORI (2001) ‘Experience of the

Competitive Domestic Electricity and Gas

Markets’, www.ofgem.gov.uk/docs2001/

72_mori.pdf

Smith, A. (1981) ‘An Inquiry into the Nature

and Causes of the Wealth of Nations’,

(1981), II.V.7, Liberty Fund Inc,

Indianapolis, USA. In the same section,

Smith says of shopkeepers and tradesmen

that ‘So far is it from being necessary,

either to tax them, or to restrict their

numbers, that they can never be

multiplied so as to hurt the publick,

though they may so as to hurt one

another’.

The Future Foundation/Pretty Polly: ‘The

Appearance of the Millennial Woman’

(2001) Future Foundation Report, London,

UK.

The Future Foundation/Ananova ‘The

Future of News’ (2000) Future Foundation

Report, London, UK.

The Future Foundation /nPower (2000) ‘The

Future of Bill Payment’, Future

Foundation/nVision ‘Changing Lives’,

London, UK.

The Future Foundation/nVision (2001-2)

‘Changing Lives’, London, UK.

The Future Foundation/nVision (1996)

‘Changing Lives 1999-2002’, London, UK.

Readers please note that all references to The

Future Foundation Reports relate to

documents that are not in the public

domain; however, they will generally be

available from The Future Foundation on

request. Please note that The Future

Foundation does not ascribe individual

authorship to its Reports.

The Future Foundation/nVision

‘Changing Lives’ is a twice-yearly

nationally representative survey of 1000+

adults. It is exclusively available to clients of

nVision, the online knowledge resource for

social and economic trends. Further details

on specific findings published here will be

made available on request.

NOTES

(1) We wondered how we might factor

in news on the Internet to our

calculations. A search for ‘news’ on

Google produced no less than 119

million hits. We realised that

quantifying news on the Internet

was not only difficult because of

the ocean of information out there,

but also, the unclassifiable nature

of most of this information — what

would we classify as ‘nationally

available news’ in this

environment?

(2) We were advised by Ofcom to

consider three as the absolute

minimum number of fixed-line

suppliers that the average UK

consumer could choose from.

(3) We should perhaps think of

‘regulators’ in the broadest sense:

increasingly, NGOs, the media,

scientists, all make direct attempts

to influence or circumscribe

markets.

(4) National Statistics have come up

with a value for all unpaid labour in

the UK that roughly doubles GDP,

and thus, it might follow, the value

of consumers’ time.



Practice papers all power to the consumer? Complexity and choice in consumers' lives

Documents

Transcript of Practice papers all power to the consumer? Complexity and choice in consumers' lives