Consumer demand drives change but attempts to anticipate the direction and extent of change can lead to problems. Sometimes businesses have misjudged market forces but there are also 'external' factors to consider.
Of course, when assessing change factors such as access to technology will impact on speed of change. But that isn't the full explanation. People sometimes just prefer old ways of doing things and in certain circumstances that will be their default choice. It's what they are comfortable doing.
In the last few weeks I've seen parallels in news reports about the cash and music industries. In the first instance there was an example of a restaurant chain that had misjudged the demand for cash payments. Salad chain Sweetgreen will now accept cash, three years after forcing customers to exclusively pay via app or card, saying that it had the unintended consequence of excluding those who prefer to pay or can only pay with cash. Elsewhere in the US, in Massachusetts, New Jersey and Philadelphia, moves have already been made to ensure that stores must accept cash if consumers choose to use it.
Meanwhile in the UK music industry, at a time when services like Spotify are redefining delivery, a new HMV store in Birmingham will stock 25,000 vinyl LPs and 80,000 CDs. While it is true that some people will always cling to the old ways, this would appear to recognise that change is not always in the direction we expect, and that people might require different types of services in different environments. Because someone is young and tech savvy, we cannot assume that this will always define their choices. Sometimes we categorise consumers at our peril, whether it's by age, income or even by ownership of means of payment (or even turntables, CD players and iPods).
Though in other ways a 'modern man', a friend of mine kept the same car for twelve years. He worked on the principle of if it isn't broke don't fix (or replace) it. He recently gave in to his family's demands and bought a new four by four. When I caught up with him, he enthused about the 'new' features of the car but there was one problem. 'I can't believe it. There's no CD player'. For years he carried a bag full of discs in the car and loaded six before any long journey. It's surprising how far six Springsteen CDs will get you! Why is this important? Never underestimate the power of inertia. There may be new and better alternatives, but if people are happy with what they have not everyone will want to change to the new option, whether to an iPlayer or bank card / mobile payment - and they certainly don't appreciate being 'forced' to change.
So, what are the underlying factors that influence our decisions? Whether we are talking of music delivery or payments, I suppose it all comes down to personal choice and while there is a demand for such 'retro' options someone will recognise this and meet it. In the case of payments of course the alternative to acceptance of the continued use of cash is lost business.
We're all different and our choice may be influenced by location and convenience - it's not just a question of 'either or'. I continue to play CDs at home (often referring to 'sleeve notes') but use an iPod while travelling as it's far more convenient. Vinyl? Well to be honest I just don't get it! I recently was at an auction where a box of 25 LPs sold for £30 and was surprised that anyone would pay such a price. Then I went to a local record store and saw some of the same albums priced at £20 each! I have a box of 33s in the attic and that's where they've stayed for 20 years, complete with the well-remembered scratches. There is a familiarity about them, but I don't feel the need to buy a turntable and give them an 'airing'. That's my choice. But when it comes to music one man's anachronism is another's fashion item. And cash? People use cash for different reasons, including budgeting, necessity (the unbanked) and maintaining anonymity. They may just like the idea of holding cash. Providing new payment opportunities is no guarantee of the demise of cash. You can't just switch it off.
So, which will last longer, vinyl or cash? Well, despite my earlier comments about 'categories', there's one area in which my analogy breaks down and that might provide a clue. It's age profile of 'users'.
According to the Federal Reserve Bank of Atlanta (Cash Essentials, 30 September 2019) 85 percent of US consumers use cash in a typical month. So how important is age as a factor in cash usage? Whereas those aged between 45 and 54 made 18 payments in cash per month, those aged 18 to 25 also made an average of 15 cash payments.
In contrast a survey from YouGov shows that rather than displaying the age diversity of cash users, the typical vinyl buyer is aged between 45 and 54. What is perhaps more disconcerting is that 7 percent of them don't own a record player!
