The profile of the global consumer in both developed and developing markets will undergo profound changes in the next decade and beyond. The Economist Intelligence Unit has distilled these trends into five broad categories—the emerging consumer, the frugal consumer, the connected consumer, the ageing consumer and the caring consumer. All of these trends will offer adept, forward-thinking organisationsaround the world the chance for expansion by establishing new channels and markets for existing products and services, and by developing entirely new offerings.
All of the trends carry risks, but there are significant potential opportunities. By 2030 two-thirds of the world's "consumer class" will be in the emerging markets of Asia, according tothe OECD. Connected consumers also represent huge untapped potential—nearly 60% of Internet users in the EU27 bought goods online in 2010, compared with 32% two years earlier. Such a massive change in just two years shows that consumers are flooding into online channels. Alongside this trend, the share of online time spent using social media sites such as Facebook is growing. Half of all Irish adults use social media currently, up from one-quarter just two years ago, according to Amárach Research, an Ireland-based market research firm. In addition to the opportunities provided by the connected consumer trend, even extended frugality is a chance to build loyalty and win customers from rivals through a renewed focus on value.
The key findings from theresearch are as follows.
Global consumer trends offer significant opportunities for Irish organisations. On the evidence of this survey, Irish firms have the confidence that they can and will adapt to global consumer trends. In some areas, such as responding to the demands of the frugal consumer, it appears that Irish firms are on the right track after four years of post-crisis experimentation. Many are now pursuing value focused innovation and unique partnerships, rather than simply cutting prices. There are Irish companies which are demonstrating the results that can be achieved with the right mix of strategy, investment and execution.
Irish organisations express confidence, but there is more work to be done to take maximum advantage of global consumer trends. Irish executives in the survey believe their organisations are well placed to respond effectively to the changing global consumer. Their confidence extends to job creation, with respondents estimating they will generate a 10% increase in employment owing to changing consumer trends over the next five years.
Almost half of Irish executives say the emerging consumer is the most important future trend for their organisations, and Irish firms need to build on strengths in B2B sectors rather than targeting emerging-market consumers directly. The survey shows a desire to exploit consumer opportunities in countries such as China and India. Yet traditionally Ireland is not well set up to sell directly to consumers in Asia, and Irish companies probably do not have the resources or scale to attempt the shift. This is not necessarily a drawback, because Irish firms are strong in business-to-business (B2B) sectors such as food products, engineering and business services. They have the potential to feed the supply chain that reaches hundreds of millions of end-consumers in emerging markets.
Expected investments in online channels maybe too low considering the size of the global opportunity, and most Irish organisations are not fully engaging with consumers through social media. Irish executives expect their organisations to receive an increasing percentage of revenue from digital channels over the next five years. However, although investments in digital channels are expected to rise, the majority will make only small or moderate increases. Regarding social media, the survey shows that the bulk of organisations appear to be mainly using the medium to advertise or broadcast rather than engage.
Irish organisations understand the new frugality and are taking steps to research the needs of cost-conscious consumers and focus on value. Many organisations have cut prices in response to more cost-conscious consumers, but 75% of organisations in the survey aim to compete on quality.
