Harvard Business Review has an online article this month reviewing what a McKinsey & Company study calls “The 10 Trends You Have To Watch“.
The article’s introduction sets an ominous tone by saying, “After a full year in heads-down crisis mode, business executives are looking again to the future. As they reengage in strategic thinking, many are struck by a sense that the world has changed: The turmoil was not merely another turn of the business cycle but a restructuring of the economic order. Is that impression accurate?”
And while several trends are compelling discussions of the current global economy including, Resources Feeling the Strain, Globalization Under Fire, Trust in Business is Running Out, the one trend that is most appropriate to consumer brand design is called, Shifting Consumption Patterns.
It discusses a scenario where Asia could become the center of gravity, by 2020, with the world’s 3rd, 4th, and 5th largest economies (after the EU and the U.S.) being China, Japan and India.
The study recommends the following strategic adjustments,
Prepare for slower long-term growth in global consumption.
Companies that have relied on fundamental market growth, especially for mature products, now need to fight for market share or compete in new categories. This means that brands, and package designers, will need to get smarter about differentiating their various product offerings.
Shift Investment to Asia.
Consumption is clearly growing faster in China and India than in developed markets. We have already begun to see more emphasis on global markets for our larger clients.
Focus on older consumers.
Within five years, more than half of all consumer spending in the U.S. will be by consumers over 50, and the proportion of older households is rising in Europe and Japan as well. This has begun to impact the healthcare category, among others, and will have both structural and graphic implications as older consumers look for less complex, and easier to use packages with clearer easier to read communication.
Find ways to offer luxuries on a budget.
Tighter household budgets don’t mean lower aspirations. McKinsey research shows that stretched consumers in slow-growing economies will still want to feel that they are living the good life. In our work with clients in most categories, this has begun to manifest itself with products of higher quality, smaller sizes, and a sense of more personal indulgence.