To stay ahead of changing consumer preferences and values, companies must embrace megatrend analysis. To do this accurately, it is important to recognize and have a clear understanding of the social, economic, technological and environmental factors, which form an ever-shifting backdrop to consumer behavior.
In a rapidly changing global environment, megatrend analysis is critical for companies seeking to drive sustainable growth and remain relevant as competition increases and new ideas disrupt entire industries.
A thorough understanding of the socio-economic shifts combining to drive these megatrends is an important first step.
In 2017, Euromonitor International’s team of economic, consumer and industry trend experts identified 20 megatrends shaping consumer markets with the power to transform and disrupt entire categories.
The analysis also identified the underlying forces driving change and propelling long-term shifts in consumer attitudes and behavior that were referred to as “Drivers”.
Megatrends may evolve in different ways across industries or take different shapes across time but differ from industry trends or local instantiations in that they are solidly established, expected to endure and have common elements across multiple industries.
To be considered a megatrend, it must be around for an expected five, 10 and 15 years and impact most industries. Otherwise, it is simply a powerful category or industry trend of the moment.
Successfully identifying, analyzing and acting on megatrends is essential for success in consumer markets. The world is changing faster than ever, and it is becoming increasingly difficult to keep up with competitors as technology spurs both the rate of and access to innovation. Amidst this change, it is difficult for companies to understand why industries are evolving in the way they are today, much less predict how they will evolve into the future.
Megatrend analysis allows companies to build a long-term strategy that is proactive, rather than reactive, making sense of where they stand today, but also ensuring they have a plan to remain relevant moving forward.
There are five socio-economic drivers generating and shaping consumer megatrends. These long-term shifts explain the on-going changes seen in consumer behavior, from the emphasis being placed on experience over possessions, to the interest in healthy and ethical living.
Shifting Economic Power
Global economic growth has seen a huge shift to emerging markets. By 2030, the Chinese economy will be 1.8 times larger than that of the USA. These economies have seen strong growth at a time when development in advanced economies has faced headwinds.
With the rising importance of emerging and frontier markets and fears over advanced economy stagnation, the global economy has witnessed a paradigm shift.
Technology plays a pivotal role in consumer decision-making and the ability of a business to meet the needs of today’s consumer.
It has created massive upheavals in consumer expectations, lowered the barriers of entry for fast-moving companies and inspired new digital-first business models.
Population trends, such as urbanization, migration, and aging, are combining to reshape consumer lifestyles and purchasing decisions.
In 2030, 61 percent of the world’s population will live in urban areas, 995 million will be aged 65 and over, and net migration will account for more than half of population growth to 2030 in Western Europe, Australasia, and North America.
As the global population approaches 8.0 billion, demographic shifts are combining to reshape consumer lifestyles and purchasing decisions.
Environmental Shifts and Pressures
Competition for resources and increasing awareness of environmental challenges are having a transformative effect on consumer behavior, sometimes at a rapid pace. This brings both challenges and opportunities for business.
Competing demands and supply constraints combine with economic, environmental and geopolitical risks to create pressures on environmental resources.
Two-thirds of the world’s households own a smartphone. Hyperconnectivity is giving individuals access to more information than ever before, educating consumers on evolving social, cultural and political landscapes.
From consumers to governments, beliefs about the world are constantly evolving, shaping priorities, perceptions, attitudes, and motivations.