I first heard the term “smart markets” a couple of decades ago at an alumni talk given by Rashi Glazer, Professor Emeritus, Haas School of Business, UC Berkeley. Smart markets are those that have a frequent turnover of the stock of information associated with the product, competitors and consumers in those markets. Fast forward to current times, clearly there has been a tremendous spike in innovative smart products, such as electric cars, AR/VR and location based apps on mobile devices, just to name a few in this digital age.
Let us focus on the consumers in smart markets. Who are they and what do they want? According to the principle of smart markets , smart customers are after two things: (1) a freedom to choose among offerings and (2) help with making that choice. This is quite understandable, given we all suffer from information overload and time is a critical resource. According to Prof. Glazer, this leads to 3 consumer desires: (1) convenience of a one-stop shopping experience, (2) participation in offering decisions and (3) anticipation of the customers’ needs by the solution provider. An understanding of these desires can then help solution providers decide on an appropriate marketing strategy, such as mass customization, market segment based offerings or focusing on getting a bigger share of a customer’s lifetime IT spend, to name a few.
From a UX/UI design perspective, awareness of smart market principles presents significant opportunities to grow a business. In particular, customer’s desire for cooperation around design and delivery and anticipation of their needs. For most product categories, the product management discipline focuses on gathering this customer intelligence to produce what customers need. But the opportunity to gather customer intelligence is much greater at the level of user experience design for all types of apps. For one, the service provider can tap into the universe of all user personas, who may not necessarily have a deep understanding of all the functionality of a product.
Another opportunity for vendors in smart markets is to leverage UX/UI design to expand their addressable market. For example, UX/UI design can enable a market-share leader focused on efficiency to get a foothold in the differentiation space. By engaging with customers at the user experience level, the provider can create industry or other market segment specific designs relatively easily. More importantly, it provides the vendor to understand some segment specific needs without too much product investment.
A practical application of this is in the SaaS platform market, where a conflicting demand may exist of having features that interest many customers and differentiated features that apply to specific segments or verticals. Information-intensive industries may need to do both, and SaaS companies may try to achieve this by offering different plans, plug and play customizations, etc. But in addition to them, opportunities exist at the UX design level, which if done right, can provide different user personas a satisfying and impactful user experience from the same base product. UX design may then become the gateway for more investment in differentiation, if the business warrants it. In the next post, I will discuss how UX design companies can help service providers work with their customers to grow their business. Afterall, smart markets talk and service providers need to listen.