Have You Addressed Your Hidden Competitor? -

Have You Addressed Your Hidden Competitor?

If you’ve spent time developing your organization’s strategy, chances are you’re familiar with your competition. You know your competitors’ offerings, their strengths and weaknesses, and how you can deliver where they don’t. But when it comes to preparing for the future, there is one alternative competitor, less obvious but omnipresent, that may not have crossed your mind: nonconsumption. Keep reading to find out why nonconsumption may be a threat to your organization and how to address it.

Nonconsumption: Your Invisible Competition

At last year’s Reimagine the Future Summit, I had the opportunity to meet backstage with Efosa Ojomo, Nigerian author, researcher, and speaker at Harvard Business School and the Clayton Christensen Institute for Disruptive Innovation. He introduced me to the concept of nonconsumption as a major competitor in the market.

He explains, “Nonconsumption occurs when the vast majority of people in an economy would benefit from access to a product or service, but due to obstacles such as cost, expertise, time, or availability, they are unable to afford the product.”

If left unchecked, nonconsumption can become one of your biggest competitors, but it can also lead to untapped market potential and strategic opportunities.

Four Reasons for Nonconsumption

According to Efosa, there are four reasons why consumers are not buying and using your product or service: cost, expertise, time, and availability. As you consider your offerings, have your potential customers run into any of these obstacles?

  1. They can’t afford it.
  2. They don’t have time.
  3. They don’t know how to use it.
  4. They don’t have access to it.

By monitoring customer behavior, which may be different from what they tell you directly, you can identify reasons for nonconsumption and target new opportunities.

New Chinese Virtual Currency Addresses Nonconsumption

In China, the central government is piloting a new digital currency that would allow customers to spend on purchases online or offline. If the trial is successful, there will be many interesting implications to discuss, including monitoring the flow of money to influence economic policy or implementing negative interest rates to encourage spending. Today, we’ll focus on how the new payment system competes against corporations by targeting nonconsumption.

Online payment systems are nothing new – most Chinese consumers are familiar with Alipay and WeChat Pay. However, the new virtual currency does not require an internet connection or any transaction fees. Accessibility is increased, and consumers in rural areas or those with poor cellular service are now able to participate by downloading a digital wallet and scanning a QR code for payments.

By eliminating processing fees, cost to merchants is decreased and makes the new payment system more appealing than competitors’ solutions. Consumers and merchants who have not used virtual payment systems in the past may enter the market due to enhanced accessibility and reduced cost.

Conclusion

Unlocking clues to nonconsumption can lead you to discover what I call Fourth Options, truly disruptive and innovative strategies that allow you to outthink the competition and shape the future. By getting to know your customers and deciphering where they are held back by cost, ease of use, or accessibility, you gain the key to opening new markets and untapping nonconsumption.

Photo by Markus Winkler from Pexels

Share:

Share on facebook
Facebook
Share on twitter
Twitter
Share on pinterest
Pinterest
Share on linkedin
LinkedIn
On Key

Related Posts