New A.T. Kearney Consumer Study Reveals Rise of Influence Over Affluence
Demographic shifts, changing values, and hyper-connectivity have rewritten the rules of U.S. and global consumer patterns.
CHICAGO, Sept. 25, 2017 /PRNewswire/ -- Consumer-facing industries are facing an unprecedented reality, according to America's Next Commercial Revolution: Influence vs. Affluence, a study released today by A.T. Kearney, that identifies key changes in customer demographics and attitudes and how they impact 21st-century commerce. The study is part of A.T. Kearney's ongoing Consumers@250 research that forecasts what the American consumer goods and retail markets will look like in 2026, the country's 250th birthday. The research behind America's Next Commercial Revolution, indicates that the transition from affluence to influence is not an economic hiccup, but a fundamental cultural change that must be addressed by all consumer-facing businesses that plan on having a sustainable future.
"The revolution we are describing in this report is driven by three factors: massive demographic and psychographic change, a significant recalibration of consumer values, and today's hyper-connectivity," says Greg Portell, A.T. Kearney Consumer & Retail Practice leader for the Americas and co-author of the study. "Some might see these as three signs of the so-called Retail Apocalypse, but they aren't a threat to business unless, of course, they are met with corporate complacency."
America's Next Commercial Revolution shows how the American business landscape is being dramatically transformed as a result of the collision of two radically different principles of commercial and social organization: affluence, the traditional approach to growing markets and establishing consumer social status based on mass production, distribution, and media models; and influence, the ability to instantly move markets through the amplification and reach of an individual voice or a community of voices.
"Despite the pessimism, in absolute terms, retail sales have never been better," Portell notes, "but the real question is, who will benefit from the changes we examine in the report? We're currently stuck in 20th century business models that leverage the scale of both manufacturers and retailers. This must evolve to 21st-century consumer-centric models that embrace that consumers are smart, informed, engaged, and capable of creating a global audience in the time it takes to hit a 'Send' button."
"The shift from affluence to influence creates a series of paradoxes companies must resolve in order to be successful in the future," notes Portell, "and we believe that from the findings in this report, it's possible to create road maps for what companies need to do in the next decade and beyond." For example, today's consumers want products that are personalized, embody their ethics and values, and are authentic. This clearly requires a good deal of data. But, those same consumers often don't want to share personal data, don't trust how corporations use it, or realize their data has value and want something tangible in exchange. Not a discount coupon, but possibly an opportunity to co-create or customize an offering."
"The fragmentation of consumer demand, combined with the potentially high costs associated with customization and personalization, means manufacturers and retailers face a higher penalty for being wrong," Portell adds, "and that is exactly why the research and analysis in this report is so critical."
The report suggests companies:
- Find new incentives to access consumer data with an eye to learning how to think like their customer
- Create new psychographic and "personagraphic" models and metrics to describe target markets
- Redefine scale in ways that allow them to profitably offer individualized products
- Understand how vital trust is to growing any business or brand
- Maximize the value of their workforce by creating an environment that accepts, nurtures, and affirms innovation
Preparing for the future requires a fundamental and radical rethinking of every aspect of commercial functions, from product development, sales, and marketing through customer service, IT, HR, and beyond. America's Next Commercial Revolution describes the historic challenge that retailers and branded consumer goods manufacturers face today and, more critically, tomorrow. Those that accept the challenge and adopt new ways of thinking about their brands, organizations, customers, employees, and vendor relationships, will prosper. Those that do not will continue to suffer declining returns.
About the A.T. Kearney Consumers@250 Study
Consumers@250 is an integral part of America@250, an A.T. Kearney multiyear research initiative and national dialogue exploring what kind of nation America will be when it celebrates its 250th birthday in 2026—and what we can do now to shape that future. This study is a US-centric exploration of consumer behavior in 2026. A.T. Kearney has also released a complementary global exploration of consumer behavior looking 10 years into the future, Global Future Consumer Study: The Consumers of the Future. To view both studies visit: https://www.atkearney.com/consumer-goods/consumers-of-the-future.
About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com
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SOURCE A.T. Kearney
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