Break-even point between company and consumer

A priori, one might think that the demands of consumers or customers and the concerns of top company managers behave in a similar way to how economics textbooks say that supply and demand in the market do: they meet and reach the point of equilibrium. Well, as expected, in the same way that the so called market equilibrium point is almost a laboratory construct.The balance between consumer demands and CEO concerns is rarely replicated in the marketplace, nor is there a clear point of equilibrium between consumer demands and CEO concerns.

Just in case anyone is thinking about it, if this does not happen, it is not because we consumers always behave thinking about the global good of humanity and the planet when we go to the market to look for goods and services, while managers think only of their own particular or company interests. If we take a look at how issues related to social responsibility have been developed and implemented in our society today, we can see that on more than one occasion these issues have come to the market more from the supply side of the company than from the real demand of consumers or customers.

Let us return to the issue of the balance point between the demands of consumers and the occupations of business executives. If we analyze two documents that have just been published recently we see that, indeed, the relationship between the concerns of CEOs and that of customers seems not to be very direct. The reports I refer to are, on the one hand, Global CEO Outlook 2018prepared by KPMG, and Retail Revolution 2018prepared by Coto Consulting.

Let's look, for example, at the Top 5 concerns of CEOs, both at the Spanish and global level, as reflected in the report prepared by KPMG.

    Source. Global CEO Outlook 2018, KPMG

First of all, it is logical that the risks that most concern top company managers are macro issues, but at first glance, and from my point of view, despite being broad issues, they seem to me to be very operational and not very strategic. In other words, their concerns are very much focused on the how and little in the what or, to put it another way, very focused on what we we do and little in what we are. However, in my opinion, a company's CEO should put more focus on what he or she we are or want to as an organization than in what it we doto realize the be in the make functional managers are already in place.

On the other hand, as also stated in this KPMG study, it is really curious that in the era of the Big Data and data analytics 82% of Spanish CEOs rely more on historical data than on predictive analytics, compared to 51% globally. This means that we are still looking backwards to know where we will have the next stone in the road, which is a bit dangerous as we all know that looking in the rearview mirror you most likely do not know where the road is going.

Having seen these few data from KPMG's work, let's now see what is worrying the consumer.

In the Coto Consulting report mentioned above, the following aspects stand out as the new roles of consumers:

Source. Retail Revolution 2018, prepared by Coto Consulting (redesigned).

Looking at the consumer's qualifications, it is striking that we are dealing with a person who is characterized by being a non-consumer. The report itself tells us that "The awareness of responsible consumption is growing. Today's consumer has gone from compulsive consumption to a more meditated and intentional consumption, even going so far as to stop consuming voluntarily.". Perhaps this means the beginning of the end of our consumer society, unsustainable from a psychological and environmental point of view.

And, on the other hand, we are facing a consumer who is also increasingly turning to the market to "get rid" of everything he no longer uses or needs through the different technological options that currently exist to sell these products.

This attitude of the conscious and responsible non-consumer can be seen in data such as the following:

                    Source: "Brands with Values: The Power of the Consumer-Citizen", Agencia 21gramos.

On the other hand, as we already know, today's buyer is a consumer of experiences. That is to say, the goods and services they acquire have no value in themselves if it is not to experience something different thanks to them. We could say that we are facing a new model of consumer, which we could rather call insumidor. If we take into account the definition of input given by the RAE, it is a person who acquires elements (the products and services you purchase) that take part of other assets (the experience you gain from these products and services).

This idea of the insumidor we could relate it to the attitude non-owner which we see more and more present in the market through different collaborative economy platforms.

All of these consumer characteristics we see are reflected in what the consumer expects from the store as the place where he or she will go to. First of all, the point of sale is the space where we seek a more human interaction and treatment. This means, among other things, that the point of sale, or the point of interaction with the customer in general, is the perfect moment to show the brand's values and connect with the consumer not only through the product, but, above all, through the brand's proposal and commitments.

The latter is also picked up by the Retail Revolution 2018 report, proposing the concept of. store 3.0. A store that, making the analogy with the marketing 3.0The store or space for interaction with the customer becomes a concrete example of the company's commitment to be part of society and the community, generating a positive social and environmental impact. In short, the store or the space of interaction with the customer becomes the concretion and example of the company's commitment to be part of society and the community, generating a positive social and environmental impact.

Having briefly seen what the two studies mentioned above tell us, let us return to the initial question: do the demands of the consumer or customer intersect at some point of equilibrium with the issues that occupy CEOs?

With the exception of climate or environmental risks, which are related to a more environmentally conscious and responsible consumer, we could say that they are not. CEOs, and therefore companies, continue to look only at the economic and short-term aspects that affect the bottom line, but are not engaged in other aspects more human and social which, from my point of view, will be the ones that will really end up affecting the generation of more sustainable business results. In short, companies continue to play the game by looking at the scoreboard, but without analyzing whether the player is playing right or left-handed, or if in the middle of the game he has simply changed hands. It's a bad thing not to pay attention to these things because then you don't know where the blows are coming from.

Perhaps technology companies are beginning to see this, as more and more of them, for example, are hiring philosophers to head up their companies. If there is one thing that has always characterized professionals trained in philosophy, as our CEO Roberto Ballesterhas been its concern not only for individuals, but also for the community and society as a whole. We see this in recent articles such as What's a philosopher doing at Google? in which we appeal to the need to humanize the company.