Cost v.s. Convenience; Pick One Unless You Are Innovative
Are you a cost or convenience driven consumer and why?
The Australian economy has not been in great shape as of late, with many industries struggling to keep afloat. Retail seems to be one of the worst hit. Constant rate-cuts and the newly introduced income tax cut are just measures the government are trying to put in place to stimulate the very much stagnated domestic economy.
One of the factors to stimulate growth in consumer spending is to gain insights into consumer behaviour and how it is evolving. Due to advancements in technology and convenience made possible as a result, there is a growing divide between consumers who are price conscious and those who value convenience.
With comparisons in price for many of the consumer commodities now openly accessible through internet, price conscious consumers are finding more reasons than ever to seek-out bargains and minimise over-paying. Do take careful note that there is a distinct difference between your price-conscious consumers and those that are overall budget-conscious. It is one thing to be over-paying / finding a bargain for an item and another thing to source an alternative item that is much cheaper.
Convenience driven consumers on the other hand are generally not too fussed by the price. They are people that are time-poor or value their time enough to pay for the convenience. Off course, they could also just be lazy; it all comes down to what the consumer values most.
Services such as UberEats and Menulog are just a 2 of the many companies around the world facilitating convenience in place for a fee. This seemingly untapped food-delivery market has now turned out to be worth hundreds of millions. How then, do you or your business facilitate convenience whilst keeping the prices down?
The quick answer is, you don’t.
Convenience almost always come with a cost; that is unless the product or service you are providing is truely innovative and improves both affordability and convenience at the same time. If that sounds like your business, then you may have a sound formula to disrupt the industry or sector you are in.