Businesses no longer have to choose between mass market reach and niche market richness. They can have both, argues Andrew Curry.

In the past, organisations that followed people’s passions  were considered “niche”. Some weren’t organisations at all, really, but groups of fans and hobbyists doing some trading on the side. The Internet has changed  this entire dynamic. Instead  of having to choose between “mass” and “niche”, passion  now has mass market potential.

That’s what Philip Evans and Thomas  Wurster  argue, anyway.

Passion is about experience, knowledge, and connoiseurship, and there are strong consumer  trends which suggest these are all on the rise. One thinks of the professionalisation of the consumer  world. It is no longer enough to be an expert cook; one needs to have the same knives a professional  chef expects to find in the restaurant kitchen. Or consider the average cyclist, now following a professional  training programme, recording training sessions via a heart monitor and uploading the data for analysis when he gets home.

In   many   previously   high-investment   areas   (think of music editing, video production), the cost of the technology  needed  for a professional-looking job has plummeted. The knowledge and tailoring that true expertise required used to limit reach. No more.

The knowledgeable  fan or enthusiast is the curator  of  a far larger museum  today, with a far larger and more engaged audience. Similarly, the Internet  enables businesses to reach passionate consumers far more easily: such  brands  are “pulled” into the conversation by consumers in communities of interest, rather  than having to “push” themselves using conventional marketing.

So how do we understand this in terms of proposition?
One   tool  is  a  simple   model   that   explores   levels of  engagement  by  provider  and  by  customer. Originally   created   by  The  Futures   Company   for  a report  published  by Coca-Cola,  the  model  indicates low engagement on the part of both supplier  and customer  in  the  bottom  left.  This  is  a  passion-free zone, occupied  by retailers  such as Poundland in the UK and other budget stores focused on piling high and selling cheap.

The bottom right sees low engagement by the customer, but not by the provider. This is a zone of necessary but low- interest  goods, provided  by relatively high-engagement providers. One thinks of a supermarket such as Carrefour, for example, whose proposition is underpinned by hugely complex logistics upon which the shopper must rely.

The passion  in this  quadrant usually  lives behind  the scenes,  though   it  sometimes   surfaces  in  positioning statements (e.g., “passionate  about the freshest cauliflower”) that seem like a good idea but largely pass consumers by.

The  top  two  zones  are  more  interesting.  The  top right is the expected area for the passion-filled “rich” proposition,   in  which  high-engagement   providers and high-engagement customers meet in a passionate embrace. The Body Shop, L’Occitane and Innocent fruit smoothies live in this category.   Operating successfully in this space is expensive, but offers premium returns.
In the  top left hand  zone we see a passion  sleight  of hand.  Customers are  engaged,  but  suppliers  are  not. This is the space in which online providers leverage enthusiastic communities to break the dilemma of reach and richness, offering depth  and scale. An example in this category is Amazon, which  first  selected  books not out of passion, but because  they were the simplest products  to source, store and ship.  What Amazon has done  brilliantly, however, is to build  a space  that  has been  colonised  by enthusiasts, and it has encouraged this  colonisation in  the  same  way a gardener   might design   an   area   knowing   that   it  will  attract   bees or butterflies.

Likewise, eBay created a market where none existed before: the online equivalent of the yard sale and the flea market.

In categories that have not been so easily  leveraged, there is an opportunity for retailers beached  by the Internet. Fans love access. And while every music shop can’t have the enthusiasm of London’s iconic Rough Trade, the high street or main street  retailer can break out of the mindset  of logistics  and stock management by  moving  online.  Curators   can thrive here,  linking the knowledge  and commitment that  exist in both the physical and digital worlds.

Source: Philip  Evans  and  Thomas  Wurster  (1999),  Blown  to  Bits. Harvard Business School Press.

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