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14 Examples of the Consumer Economy

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The consumer economy is an economic system fueled by the needs, perceptions and participation of individuals. This is a broad economic trend that began in the 1920s that has intensified with the introduction of technologies such as the internet that allow for broad consumer participation in economic processes. The following are illustrative examples of the consumer economy.

Consumption

An economy where most consumption of economic goods is by individuals. This can be contrasted with an economy where businesses or government departments consume most resources. In an developed nation, it is common for personal consumption to be the root of 70% or more of economic activity.

Advertising

Consumers buy what they know thus creating a huge market for gaining the attention of consumers.

Customer Needs

In a consumer economy, producers seek to fill customer needs and even try to discover latent needs of which customers are unaware. This is efficient as producers constantly work to maximize their value to the end customer.

Commoditization of Experience

It is common for producers to seek to fulfill customer's greatest needs. This may extend into all areas of the human experience. For example, a television show that fills a need for social stimulation or adventure. It can be argued that the use of products, services and media as a replacement for authentic experience can become a problem.

Variety

People have diverse needs such that producers in a consumer economy produce significant product variety.

Branding

In a sea of product variety, consumers require simple cues to make purchasing decisions such as visual symbols and brand names.

Reputation Systems

Historically, people buy brands they recognize such that brand recognition is a license to reduce quality but still earn high sales. Reputation systems are websites and apps that allow consumers to review products and services. This is increasingly used as an primary source of information for purchasing decisions. Reputation systems allow small producers to compete on quality and can penalize brands that overextend into low quality products.

Mass Customization

Mass customization is the evolving capacity to increase product variety to the extent that every product is customized for every consumer. For example, a customer who can reformulate their shampoo using a design tool until it is just right.

Comfort & Convenience

Consumers tend to take the path of least resistance such that producers constantly work to make products and services more convenient and comfortable. This arguably has negative effects as it essentially makes life less challenging whereby challenges may have some benefit to the human experience.

Service Economy

In order to serve customer needs, producers increasingly offer intangible value known as services. In an developed country, the value of services can greatly exceed the value of physical products. This is known as a service economy.

Consumerization of Technology

Historically, most computers and software were produced for businesses to their needs. This is changing as businesses increasingly use devices and software designed primarily for consumers. In theory, this can go quite far whereby software specifically for business will essentially become nonexistent.

Consumerization of Everything

Consumerization is a broad trend that can be seen in all industries including media, communications, education, healthcare, transport and finance. For example, consumerization of healthcare would involve home tests that allow consumers to proactively monitor their own health without involving the medical establishment. Likewise, algorithms and artificial intelligence could replace most visits to a doctor. In other words, healthcare is likely to become a consumer product whereby consumers have choice and control.

Consumerization of Production

Consumerization of production, better known as long tail or crowdsourcing, is the ability of consumers to design and produce their own goods and services. This allows amateurs to compete with professionals. As amateurs greatly outnumber professionals, it is possible that this becomes the dominant form of production in the future. For example, an individual with an app that architects a sports stadium whereby the app makes sure the stadium is architecturally sound and calculates its cost. Such an app could allow all buildings to be architected as open competitions representing a serious challenge to professional architects. In other words, the future may have no professionals only open competition.

Economic Bads

In a consumer economy, producers are rewarded for creating economic goods for consumers but often have no incentives not to create economic bads such as air pollution in the process. This essentially leads to unconstrained production of economic bads. This could be mitigated with markets for economic bads whereby production of bads such as air pollution have a cost that producers could work to minimize.

Consumer Economics

This is the complete list of articles we have written about consumer economics.
Adverse Selection
Attention Economics
Behavioral Economics
Bounded Rationality
Brown Goods
Consumer Attitudes
Consumer Economics
Consumer Economy
Consumer Sovereignty
Demand
Failure Demand
Fear Of Missing Out
Information Costs
Macroeconomics
Microeconomics
Network Effect
Social Status
Sticky Prices
Switching Barriers
Time Preferences
Zero-sum Game
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Consumer Economics

The definition of consumer economics with examples.

Consumer Sovereignty

The definition of consumer sovereignty with examples.

Consumer Education

An overview of consumer education with examples.

Final Goods

The definition of final goods with examples.

Goods Examples

A list of goods by type.

Goods And Services

An overview of goods and services with examples.

Personal Items

A list of common personal items.

Brown Goods

The definition of brown goods with examples.

Economic Context

An overview of economic context with examples.

Consumer Attitudes

An overview of consumer attitudes with examples.

Consumer Issues

An overview of consumer issues with examples.

Consumer Behavior

A list of consumer behaviors.

Prosumer

The definition of prosumer with examples.

Extrinsic Motivation

The definition of extrinsic motivation with examples.

Consumption

The definition of consumption with examples.

Overconsumption

The definition of overconsumption with examples.

Buying Behavior

An overview of buying behavior with examples.

Customer Incentives

A list of common customer incentives.

Marketing Analysis

An overview of marketing analysis with examples.

Customers

Examples of common types of customers.
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