Consumer megatrends that will shape the future
Written on the 10 May 2019 by David Simmons
With the world economy changing as rapidly as it has of late it can be difficult to understand what's coming next.
Becoming bogged down on the micro-level of your own business can often leave you unprepared or unaware of the bigger picture.
According to Euromonitor International, who just released a study into the main 'megatrends' shaping consumer markets around the world, there are five key drivers to understand where the world is heading.
"Our analysis identified the underlying forces driving change and propelling long-term shifts in consumer attitudes and behaviour. These we call "Drivers"," says Euromonitor International.
"Drivers are crucial to understanding megatrends. To stay ahead of changing consumer preferences and values, companies must embrace megatrend analysis. To do this properly, it is important to recognise the full picture and have a clear understanding of the social, economic and environmental factors that form an ever-shifting backdrop to consumer behaviour."
Euromonitor International identified five of these key drivers that are shifting our world around us every day.
"These long-term shifts explain the on-going changes we see in consumer behaviour, from the emphasis being placed on experience over possessions, to the interest in healthy and ethical living," says Euromonitor.
Shifting Economic Power
By 2030, the Chinese economy will be 1.8 times larger than that of the USA. This is a major departure from the prolonged supremacy of the US economy and will deliver serious change as a result.
"With the rising importance of emerging and frontier markets and fears over advanced economy stagnation, the global economy has witnessed a paradigm shift," says Euromonitor International.
The emergence of new powerhouse economies is a paradigm shift that signals the decline of Western dominance. Developed economies are expected to grow by 20 per cent in the next 12 years but this is actually a slowdown from what we've seen previously.
Euromonitor International highlights China and India as obvious examples, but also cites the emergence of Brazil, Russia, and Mexico as further evidence of this change.
It hardly bears repeating, but the Internet heralded in a new era for civilisation. The effect it had on businesses was tremendous, and we are still coming to grips with the acceleration today.
The number of Internet users has more than doubled over the last decade, giving way to unprecedented levels of connectivity.
"The internet has been one of the most transformative technologies of the modern era and now underpins other technological advancements such as artificial intelligence, augmented reality, virtual reality and the Internet of Things," says Euromonitor International.
"The smartphone and its on-the-go access democratised the internet, connecting many emerging-market consumers for the first time and offering greater convenience to those already online."
"Continued technological advances in areas such as artificial intelligence and the Internet of Things will further redefine what it means to live, work, shop and play for consumers over the next decade and beyond."
In Australia especially we are grappling with a huge ageing population. This uncontrollable undercurrent has significant impacts on both Australia's economy, and the rest of the worlds.
Combined with the emergence of megacities and the pull towards urban areas for employment, the next few decades will prove challenging.
"Population trends, such as urbanisation, migration and ageing, are combining to reshape consumer lifestyles and purchasing decisions. Ageing, urbanisation and migration drive consumer demand including the demand for a convenient and technologically-advanced experience. Urbanisation leads to better retailing and IT infrastructures. Population growth and rapid urbanisation put pressure on resources and the environment, but also raise consumer concerns over sustainability," says Euromonitor International.
Environmental Shifts and Pressures
Climate change is more of a looming threat than ever before. New reports spell out a disastrous future for the planet and for future generations. The effects of this inevitably will spill into the global economy.
"With the rise of ethical consumers, environmentally responsible products from those carrying "free from" claims to those made with biodegradable packaging are gaining space on supermarket shelves. At the same time, the regulatory landscape is changing with recent policies such as the Chinese ban on waste imports, the French tax on non-recycled plastic packaging, or the EU Circular Economy package," says Euromonitor International.
Whether it be the effect of social media or a rejection of branding, the consumer of the future is more into experiences than products.
Additionally, the rise of connectivity has transformed the way consumers think about products, making them more switched onto brands that align with their personal values than ever before.
"Connected consumers can summon a taxi, book a flight, browse products, order food, listen to music, play a game, watch a film or chat with others using internet connectivity. This is developing greater self-awareness and is helping consumers to make more informed decisions," says Euromonitor International.
"Conscious consumption has replaced conspicuous consumption and is at the heart of changing values and priorities. Gone are the days of ownership as a status symbol."
"Brands are under pressure to put more emphasis on social responsibility, to be actively investing in solutions for social issues and making change for the better."
Business News Australia
Author: David Simmons