Beyond the label: Why consumer vulnerability is a business imperative, not just a policy problem

Have you ever felt a sudden surge of anxiety while trying to navigate a complex insurance claim, or felt completely locked out of a service because an app’s interface seemed designed for someone with a PhD in computer science? At some point, almost all of us have experienced that sinking feeling of marketplace powerlessness, a moment where the ‘system’ feels rigged, and our ability to make a fair choice vanishes.

In the academic world, we call this Consumer Vulnerability. For decades, businesses and policymakers viewed this through a narrow, often static lens. They labelled specific groups—the elderly, the low-income, or those with disabilities—as ‘vulnerable’. But our recent research, recently published in the Journal of Consumer Behaviour, reveals a much more profound and urgent truth: vulnerability is not a permanent label or a personal trait; it is a state that any one of us can fall into given the right (or wrong) circumstances.

As the lead author of the study, ‘Consumer Vulnerability: A Systematic Literature Review and Future Research Agenda,’ I worked with a global team of scholars to synthesise thirty years of research. Our goal was to move beyond fragmented theories and create a cohesive roadmap that helps businesses and society understand how to build a more inclusive marketplace.

Why this research matters today

We live in an era of ‘Wise Innovation’—a philosophy we champion at SPJIMR. However, innovation isn’t always wise if it leaves people behind. As we move toward an AI-driven, hyper-digital economy, the ways in which consumers can be marginalised are multiplying.

Whether it is a ‘black box’ algorithm denying a loan without explanation, or ‘dark patterns’ in web design that trick users into subscriptions they don’t want, the modern marketplace is rife with triggers that can render even the most sophisticated consumer vulnerable. Our research seeks to answer a critical question: How can we identify these gaps and bridge them before they become systemic failures?

The core idea: Moving from ‘who’ to ‘when’

The most significant takeaway from our systematic review of 87 top-tier research papers is the distinction between being ‘at-risk’ and being ‘vulnerable’. Traditional marketing often assumes that if you aren’t part of a marginalised demographic, you are ‘fine’. Our study challenges this assumption. We define consumer vulnerability as a situational disadvantage arising from an interaction between individual characteristics and external environments.

Think of it this way: A highly successful executive might not be ‘at-risk’ in their daily life. However, if that executive experiences a sudden bereavement, a health crisis, or even a sudden technological shift in their industry, their ‘autonomy’ (the ability to make independent decisions) and ‘access’ (the ability to get what they need) are compromised. In that moment, they are vulnerable.

By shifting the focus from ‘vulnerable people’ to ‘vulnerable situations’, we open the door for businesses to design better, more resilient systems for everyone.

Key Insights: Challenging the status quo

Our research utilised the TCCM framework (Theory, Context, Characteristics, and Methodology) to organise three decades of insights. Here are three key findings that challenge conventional wisdom:

1. The digital paradox: While technology is often touted as an ‘equaliser’, it is currently one of the primary drivers of vulnerability. We found that ‘digital exclusion’ isn’t just about not having a smartphone; it’s about the cognitive load required to navigate increasingly complex digital ecosystems. When companies automate customer service, they often remove the ‘human safety net’ that vulnerable consumers rely on.

2. Vulnerability is multi-dimensional: It isn’t just financial. It is psychological, social, and physical. A consumer might have the money to buy a product but lack the ‘literacy’ to understand the terms and conditions, leading to long-term harm.

3. Coping is a spectrum: Consumers don’t just stay passive. Our review highlighted how people use ‘coping mechanisms’—some seek social support (resilience), while others completely withdraw from the market (avoidance). For a business, a customer’s withdrawal is a lost opportunity and a sign of a failing relationship.

Practical implications: A call to action for business and policy

As we believe that management research should be action-oriented, our findings offer a clear path forward for various stakeholders:

For business leaders: Design for the margins

If you design a product for the ‘average’ user, you inadvertently exclude millions. However, if you design for the vulnerable, you create a better experience for everyone. This is known as the ‘Curb-cut Effect’—the idea that sidewalk ramps designed for wheelchairs ended up benefiting parents with strollers, travellers with luggage, and delivery workers.

For frontline managers: Empower the ‘human element’

In our interviews with industry experts, a recurring theme was the lack of training for frontline staff. When a customer is in distress, a scripted chatbot response or a rigid employee often exacerbates the customer’s vulnerability.

For policymakers: From protection to empowerment

Regulation often focuses on punishing bad actors after the harm is done. We argue for a proactive approach.

Reflections: Shaping a more compassionate marketplace

The insights from this research are not just academic; they are a call for empathy in commerce. As we look toward a future dominated by AI and automation, the risk of ‘automated vulnerability’ is real. If the data used to train AI is biased, or if the algorithms prioritise short-term profit over consumer well-being, we risk creating a marketplace that is efficient but cold.

Our study at SPJIMR serves as a reminder that the consumer is not just a data point or a ‘segment’ to be targeted. The consumer is a human being whose circumstances change. A truly successful business is one that stands by its customers not just when they are at their strongest, but especially when they are at their most vulnerable.

Final takeaways

As we move forward, let us challenge ourselves to build a marketplace that doesn’t just sell, but also protects and empowers. Because ultimately, a marketplace that works for the most vulnerable among us is a marketplace that works for all of us.

To dive deeper into the data and the full TCCM framework, you can access the full paper in the Journal of Consumer Behaviour.