Thursday, June 7, 2012

Biggest Consumer Trend is Lower Discretionary Spending, but Video and Communications Products Could Still Gain Value

Among top trends affecting the consumer market, perhaps the most important, for providers of communications and entertainment products, is the reduction in discretionary spending, Gartner analysts say.

In mature markets, many consumers have cut back on discretionary spending in the wake of successive financial crises. But there is potential for service providers, globally.

Even as they generally practice restraint, consumers seem to put a higher value on media and communications products. In fact, that is congruent with traditional thinking within the U.S. cable industry.

The rationale is that, when other alternative forms of entertainment outside the home become relatively less desirable, video entertainment provided by a cable subscription offers quite a lot of value for a reasonable amount of money.

The Gartner survey would seem to confirm that sort of thinking about value and price.

Tough times create "buyer's markets," meaning that service providers might have an opportunity to protect or even gain market share and revenue, but must adjust their operations to accommodate changing consumer expectations.

This involves switching to more recession-friendly marketing messages, a greater range of "affordable" or "value" product options, more-strenuous customer engagement efforts, and improved customer experience, Gartner argues.

That sort of business climate might also provide benefits for application providers and services able to supply entertaining content that consumers deem to have a reasonable value to price relationship.

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