We’re pleased to be able to share a summary of the presentation our CEO & Founder Luigi Matrone delivered to the P&G Alumni Network on the five Megatrends now shaping business and society.
The world was changing at a remarkable pace before coronavirus accelerated the need for change.
These changes – to business and the way we live our lives – were being driven by five Megatrends that will continue to heavily influence the post-COVID world.
Three of these Megatrends – demographic shifts, the environmental crisis and hyperconnectivity – can be considered immutable ‘irreversible’ shifts. The other two – the health revolution and diversity (or the ‘new normal’) – are societal trends.
So, how will these Megatrends impact consumer behaviour and business in the future? And will short-term behaviours and changes necessitated by COVID-19 alter the long-term outlook?
Demographic shifts
People are living longer. In the year 2000, 10 percent of people in the world were over the age of 60. By the year 2050, that figure will increase to more than 20 percent[1].
That will mean considerably more mouths to feed – and therefore that agricultural practices and food supply chains will have to significantly change[2].
And there’s another great challenge for food suppliers to contend with: less traditional agricultural land to work with as two-thirds of the world becomes urbanised[3].
How will retailers adapt? And how will consumer buying habits change, especially with the economic middle classes in developed countries becoming increasingly squeezed financially?
Retailers have been preparing for these changes for a while now. For example, French chain Intermarche launched its Bien Chez Moi supermarket for seniors in 2018. Can we expect to see more of these tailored consumer experiences going forward?
These are all questions and concerns that business and society have had for some time.
But what impact will coronavirus have on these trends in the short-term?
It’s quite possible that urbanisation will be slowed by restrictions on travel and movement. Rural areas have also seen relatively few COVID-19 infections and deaths, and it may be that people might be less willing than they were to move to urban areas because of their concerns about new coronavirus spikes.
The impact on jobs and economies may also stunt the growth of the middle class and limit the amount of money people have to spend on non-essential goods. Sadly, the UN reports that global poverty could potentially grow for the first time since 1990[4] – a significant step backwards in the noble ambition to reduce hunger and inequality across the world.
On a more positive note, the lockdown may have acted as the catalyst for a kinder and more caring society.
We’re seeing retailers make special provisions that enable vulnerable senior citizens to shop at specially appointed times that reduce the risk of infection.
And there are signs of more united, stronger local communities that could inspire governments to launch new state-led schemes that do more to help the less fortunate elements of society.
The climate crisis
The United Nations (UN) has declared the global environment to be in grave crisis, claiming that we effectively have 12 years to save the planet.
91 percent of all plastic has not been recycled and the polar ice caps are melting due to global warming[5].
The majority of people are sitting up and taking notice. Greta Thunberg has become a household name across the world for helping mobilise climate change campaigners in their millions.
And this growing compassion for our planet is being reflected in consumer buying habits. People want to know where the stuff they buy is coming from. Is it from sustainable and ethical sources?
These things really matter to the people that brands and retailers are selling to.
And organisations have to do so much more than just pay lip service to these environmental concerns – they have to demonstrate to consumers that they really do care and to reflect this in their sourcing and packaging practices.
You can learn more about how consumer-driven trends will impact the CPG (Consumer Packaged Goods) industry in this blog based on a speech Luigi Matrone delivered to one of the world’s leading food processing and packaging companies.
Hyperconnectivity
Technology is everywhere. It dominates our lives.
Why rush into crowded city centres in bad weather on your lunch break to search around for a product that might not be in stock when you get to the store?
There’s so much choice online – and you can shop for anything you want ‘any time, anywhere’ from the comfort of your own sofa.
It’s hardly surprising, then, that an increasingly large proportion of consumers[6] say that they will pay more for this kind of convenience. And, at the moment, for the feeling of being safe from potential exposure to the coronavirus in shared physical locations.
Hyperconnectivity is empowering consumers. But this also means that consumer expectations are growing ever-higher – and brands and retailers will have to optimise shopping experiences if they are to survive and thrive in this hyperconnected new world.
During the COVID-19 lockdown, people have had to rely on new means of communication like Zoom and other video conferencing tools to Work From Home (WFH) and also adapt to the trauma of not being able to see family and friends.
On the one hand, while social distancing measures have negatively impacted on the sharing economy, people are placing their trust in more digital tools to stay connected and accelerating digital habit formation that will be here to stay. Digital Transformation is therefore occurring at both a personal and corporate level, and driving innovation.
Necessity is the mother of invention, and you only need to look at the way that Alibaba grasped the opportunity to innovate during the SARS crisis of the early-2000s to see the limitless potential that forward-thinking companies have to use global hyperconnectivity and agile approaches to create new products and services that delight customers.
The health revolution
The global Wellness industry is now worth in excess of $4.5 trillion, bolstered by the $828 billion physical activity market, according to research by the Global Wellness Institute[7].
Health and wellness apps and gurus, vitamin supplements, yoga, nutrition, dieting. People living 50 years ago or so would have thought it extraordinary that these phenomena are so heavily influencing the way that we live our lives. And the way that we spend our money.
But there really has been a biological mindshift. Global organic food sales have broken the $100 billion barrier[8]. People are focusing on their physical and mental wellbeing. And technology-enabled consumers are taking control of their health.
And think, too, not just of the impact COVID-19 has had on the sales of cleaning and sanitation products during the pandemic but how new long-term cleanliness habits will have formed during this period.
The beauty and skincare categories have also been surprising winners during lockdown, and it will be fascinating to see how both develop and fare in the post-pandemic world.
People are still likely to be anxious about hygiene when trying these products, meaning that they will be likely to avoid in-store testers and samples. Augmented reality and livestreaming have enabled people to test products in a virtual and highly personalised manner during lockdown, and it’s likely that this trend will strengthen in the new world[9].
Diversity
There’s still a very long way to go – as is evident from the reaction to the Black Lives Matter movement[10] – but global society is becoming more inclusive and open.
While the majority of products, services and marketing communications have been aimed at ethnically white audiences since time immemorial, brands are now acutely aware that they must serve the needs of a much greater diversity of people, whether that be in terms of colour, race or shape and size or gender identity.
For example, Fenty Beauty – created by Rihanna in 2017 – has taken the beauty world by storm for its broad inclusivity across skin tones and gender. Cover Girl, Maybelline and Dior have all followed Fenty Beauty’s lead by expanding their respective ranges of foundation colours to be more inclusive.
As society progresses, brands and retailers will – understandably – be challenged to do away with stereotypes. And, instead, properly cater for more diverse audiences and find ways to appropriately target segmented audiences.
In conclusion – brands can’t afford to stand still
Organisations will not be able to ignore these Megatrends, even if they want to.
Whether they like them or not, these trends are already shaping the world we live and do business in – and will continue to do so for the foreseeable future.
Brands and retailers should be adapting their strategies to meet and exceed the ‘new world’ consumer expectations that are driving so much of the change that we’re already experiencing.
eBusiness Institute has extensive experience of preparing organisations for the future and enabling business transformation from strategy to execution, placing particular focus on integrating marketing and sales functions to drive business results online and offline.
As such, we are in a great position to help businesses take advantage of the Megatrends outlined above. Please contact us if you would like to benefit from our considerable experience and expertise.
Moreover, we would be happy to arrange for Luigi Matrone or one of our other experts to deliver a similar presentation to your organisation.
This article was written and created by the eBusiness Institute team.
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eBusiness Institute focuses on the integration between marketing and sales to drive business results online and offline.
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Sources
[1] https://www.silvereco.org/en/statistics/
[2] https://www.wri.org/blog/2018/12/how-sustainably-feed-10-billion-people-2050-21-charts
[3] https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html
[4] https://theconversation.com/global-poverty-coronavirus-could-drive-it-up-for-the-first-time-since-the-1990s-140662
[5] https://www.nationalgeographic.com/news/2017/07/plastic-produced-recycling-waste-ocean-trash-debris-environment/
[6] https://www.smartinsights.com/ecommerce/customer-experience-examples/convenience-is-driving-e-commerce-growth-and-influencing-consumer-decisions/
[7] https://professionalbeauty.co.uk/site/newsdetails/Global-wellness-market-now-worth–4-5-trillion-
[8] https://www.alliedmarketresearch.com/organic-food-beverage-market
[9] https://www.ft.com/content/98e8ab63-0676-4c87-9ae3-071486773dea
[10] https://www.theguardian.com/world/black-lives-matter-movement
