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From affluence to influence: Retail PR’s imminent economic shift

by | Jul 5, 2017 | Public Relations

Recently at the Consumers Goods Forum’s global summit in Berlin, management consulting firm A.T. Kearney previewed its 2017 Global Future Consumer (GFC) study. Drawing from a survey pool of over 7,000 consumers across all age cohorts in the United States, the UK, France, Germany, Japan, India and China, the study projects 10 years out and clarifies the fundamental principles shaping tomorrow’s consumer packaged goods and retail industries—trust, influence and personalization.

Examining the fundamental forces shaping consumer behavior—demographic shifts, changing values, and hyper-connectivity—the study incorporates insights about the future from six key consumer generations: the Silent Generation (1928-1945), Baby Boomers (1946-1964), Generation X (1965-1980), Millennials (1981-1997) and Generation Z (1998-2016).

With sometimes dramatic variations from country to country—particularly in China and India versus the rest of the markets—the firm predicts the death of the scale economy that focuses on catering to affluence, in favor of one driven by the influence of industry stakeholders, particularly by the hyper-connectivity of the younger generations.

“We wanted to project changing consumer behavior over a longer time horizon, something that has not been done before in the consulting industry, and then translate those insights back into near-term actions for our clients,” said A.T. Kearney partner Dean Hillier, Global Consumer & Retail practice leader and lead author of the ongoing study, in a news release.

From affluence to influence: Retail PR’s imminent economic shift

Hiller adds that for the first time in history, 2027 will see six generations making up the consumer market for branded goods and other retail offerings, with dramatic upheaval expected across brands and retailers.

The largest of these six generations will be Gen Z, of whom 50 million in the U.S. alone will reach adulthood within the next 10 years. Gen Z is spearheading a wave of change that has been building for decades. The study highlights changes in the drivers of consumer behavior away from ownership, status and brand loyalty and toward trust, influence and personalization. While we live in an increasingly digitally connected, global world, the study finds that brands are still major draws in world markets such as China and India—and often values can differ significantly from culture to culture.

The study findings pertinent to Western consumers—and also driven by Millennial and Gen Z values—include a major loss of trust in large corporations and brands. North American and EU consumers, in particular, are demanding that brands have clearly defined values and that those values are transparent and consistently demonstrated in everything branders do and in every product or service they bring to market.

Marketing for brands is shifting significantly, too, as reflected in another of the study’s findings, the rise of influence over affluence. Influence is the ability to move markets through the amplified power of an individual voice. Due to the global explosion of technology and in particular social media, we have seen the emergence of two types of influencers: macro influencers, such as social media celebrities with millions of followers, and micro influencers, individuals with thousands of followers who are even stronger personal influencers within their virtual communities due to their presumably greater authenticity.

The study also notes that the trend toward personalization—of product offerings as well as marketing methods—has emerged from these larger macro demographic, cultural and economic trends. Increasingly tech-savvy consumers, aware that data is the real new commercial currency, are willing to share more personal information and engage in a more intimate relationship with brands. However, in return they expect more personalized and heightened experiences. The role of traditional marketing segmentation is at best limited, the imperative being to customize to the level of ‘markets of one.’

“The ‘mass’ market is over, for all intents and purposes,” said Greg Portell, A.T. Kearney Consumer & Retail practice leader for the Americas, in the release. “Embracing trust, influence and personalization as the new commercial mantra for success will be key for all brands and retailers, global and local, in the future.”

Part of an ongoing study looking at changes in markets, economics, geopolitics, demographics and culture in the next ten years, the 2017 Global Future Consumer Study is an overview of extensive work done polling more than 7,000 consumers globally on issues relating to their relationship to brands, products and services, and spending. Different regional iterations and aspects of the study, including U.S. specific results, will be released within the coming year.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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