It has released ‘Megatrend Analysis Putting the Consumer at the Heart of Business’, by Sarah Boumphrey, director, Economies and Consumers, and Zandi Brehmer, head of Client Innovation, both Euromonitor International.
Shifts in behavior
The report claims today’s fast-changing environment makes it more challenging to keep up with competitors.
Megatrends represent long term shifts in behavior or attitude that have a global impact, cross multiple industries and explain the fast-paced change taking place.
According to Boumphrey, for a business to thrive in a fast-paced market, meet disruptions directly and stay ahead of changes in consumer and customer behavior, it must embrace the analysis of megatrends and incorporate them into core strategy.
“Megatrend analysis helps businesses better anticipate market developments and lead both incremental and disruptive change for their industries,” she said.
“In addition to new product development, megatrend analysis should be leveraged as a key input to innovating all areas of a business, including internal and external change.”
The report states some megatrends, such as the ‘Middle Class Retreat’, have very broad relevance, while others may be of less concern. For instance, a printer manufacturer will have less interest in the ‘Healthy Living’ megatrend than a grocery retailer.
“Many companies understand the value of megatrends and their potential for positive impact but struggle with applying them to their business,” added Boumphrey.
“First, it is important to understand which megatrends are most relevant to your industry and next, analyze how these megatrends are transpiring in your industry via trends and sub-trends.
Potential future applications
“Relevant case studies and new product or service launch examples help businesses comprehend the impact of megatrends and to ideate potential future implications or new applications.
“Next, quantifying current and forecasted impact enables businesses to prioritize which megatrends and industry or category level trends they innovate against and on what timeline.”
The ‘Middle Class Retreat’ megatrend asserts whilst the middle classes boom in Asia, the middle classes in developed markets struggle to maintain the economic position they enjoyed for the last half a century.
This is exemplified by the growth of discounters in grocery retailing. Since 2010 and the aftermath of the global financial crisis, discounters have seen their sales growth outpace that of hypermarkets.
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- Experience more
- Middle Class retreat
- Healthy Living
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- Ethical living
- Shopping reinvented
- Connected consumers
Meanwhile, hypermarkets have underperformed the grocery market performance since 2013, as consumers switch to more frequent shopping trips and demand smaller stores in more convenient locations.
One aspect of this megatrend is the idea of ‘Glorified Frugality’ which sees the middle class consumer celebrating how little something costs, rather than how much, whilst also reducing waste.
To win these frugal consumers, Boumphrey suggests businesses must design for longevity, emphasizing good quality, re-use and ease of maintenance and look for “revolutionary” takes on value.
Another shift in behaviour is the increased emphasis on experiences over possessions.
The study finds after the global financial crisis real growth in spending on durable goods fell and spending on services continued to grow.
“Looking ahead, we expect spending on services to continue to accelerate at a faster pace than spending on durable goods,” said Boumphrey.
Creating more intimate experiences
The ‘Experience More’ megatrend goes further than this. As well as prioritizing experiences over possessions, consumers are more demanding of experience in the path to purchase.
This trend is impacting across sectors, from the value placed on the dine-in experience in consumer foodservice, and the importance of the shopping experience in the retail sector, through to the priority some consumers give to experiences such as holidays, over purchasing the latest TV or latest fashion.
Those at the frontline such as retailers and restaurateurs are tackling this trend head on by placing more emphasis on the consumer experience as a vehicle for boosting sales and margins.
This includes creating more intimate experiences with consumers, providing a seamless shopping environment whether online or in-store and personalizing their offering.
As an example, Unilever’s Magnum ice cream brand makes consumers part of the production process - for the past three years, Magnum has run a “Make Your Own” pop-up store in London, which allows shoppers to create a Magnum ice cream bar according to their own preferences.
Magnum puts a lot of emphasis on shareability, encouraging shoppers to use the #MagnumLDN hashtag.
“Make Your Own” lets shoppers become part of the production process of a bespoke, yet familiar, product. While anyone can buy a Magnum in the store, the pop-up concept ensures that consumers have a more immersive and exclusive experience.